Consumer complaint received 2017-12-06
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: GREAT LAKES (NY)

Complaint:
Hi CFPB : I am a " client '' of XXXX XXXX XXXX XXXX XXXX XXXX, and in the five years I have been out of XXXX school, I have repaid roughly {$25000.00} on {$69000.00} worth of student loans through a consolidated loan held by Great Lakes. {$20000.00} of that was paid to interest, and just {$4000.00} to principal. According to their website, I still owe more than {$62000.00} a mere five years after graduating from my program. In other words, in just five years since finishing graduate school I have been charged my fixed 6.12 % interest rate to the tune of the down payment on a house, without touching the principal which is still generating a high monthly interest. The issue was that Great Lakes misadvised me about the type of repayment plan I should be on, and for five years I was paying below the minimum required to avoid accruing additional interest on a graduated repayment plan. I wrote to them and spoke by phone for years with people at Great Lakes who assured me that this was not the case, and could n't explain the discrepancy between what I had paid and what I had borrowed. Unfortunately and conveniently for Great Lakes, their website only displays payment history as follows : " Your payment history shows up to 12 months of transactions and only includes transactions since Great Lakes began servicing your loan. '' But they should have these records. I am currently paying {$900.00} a month to try to pay down this loan, which is why I 've managed to pay {$4000.00} toward the principal. Otherwise Great Lakes would have had me on a plan paying only interest for who knows how long? When I checked today what the minimum payment would be for their " graduated repayment plan '' it still said my payment would be $ XXXX/mo. This is less than the amount of interest that is generated on my loans, meaning I would be effectively underpaying an amount that would eventually lead to a pay off. Their graduated plan is a total scam, and I 'm sure I 'm not the only person who has fallen into this trap. I 'm just glad I realized it five years in rather than 10. That said, their mis-representation and mis-consultation of my case has cost me dearly -- and if I were to stay on the $ XXXX/month graduated plan their current calculator tells me it would cost over {$72000.00} in interest alone, meaning my total pay off amount would be roughly three times what my initial loan amount was for. Through multiple phone calls and emails, I never got a straight answer why my payments were not deducting from interest ( i.e. why the principal kept growing even though I was paying what they recommended I pay each month ). Great Lakes is not looking out for people like myself who took out federally subsidized student loans directly from the federal government and then got wrapped up into their money making schemes. I believe this should be the subject of a class action suit, and that many people like myself would stand to reap substantial reimbursements. Please feel free to be in touch if you agree. Thank you for your time and attention and your willingness to help.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation