Consumer complaint received 04/13/2017 about Student loan (Non-federal student loan) with Navient Solutions, LLC. (TX).
Issue: Dealing with my lender or servicer
Sub-issue: Trouble with how payments are handled

Complaint: I graduated in XX/XX/2009. When my loans went into repayment, I was unemployed. Both myself and my co-signor were receiving incessant phone calls regarding payment and threats of credit reporting, lawsuits, and default. In order to avoid these issues, I was told I need to put my private loans into a forbearance. I was not provided any additional options including, but not limited to, rate reduction programs, income driven repayment programs, or federal loan consolidation. When I applied for a forbearance I was not provided any documents, paperwork, or additional information informing me that interest would be capitalized to principal. After applying for the initial forbearance, I was not contacted by the student loan servicer ( XXXX XXXX or Navient ) until two years later. It was at that time I was informed that the unpaid interest had been capitalized adding tens of thousands of dollars to my private and federal student loans. During the pendency of my forbearance, I would contact the servicer ( XXXX XXXX or Navient ) and inquire about my loan status. I was informed that it was in forbearance and no payments were due. After the loans had capitalized, I contacted the ombudsman office for the servicer ( XXXX XXXX or Navient ) and was informed they could not reverse the capitalization of interest due to federal law and was offered a " new '' rate reduction program. I applied for the rate reduction program ( which I am still in ). After the appropriate period, I applied to release my co-signor. That application was denied. I was informed at that time that my co-signor would not be released because ( despite my ongoing payments ) the payments were not " level '' payments and a co-signor release would require 24 to 48 months of " level '' payments ( which I can not afford due to the capitalized interest ). I asked on several occasions during my time in the program about a release of co-signor and was never told that the co-signor could not be released while in the rate reduction program and, in-fact, was told to fill out the form to have the co-signor released and the servicer ( Navient or XXXX XXXX ) would make an independent determination. I applied twice. Both times my application was rejected. Throughout the rate reduction process I was also provided inconsistent information regarding reapplication and extensions. In addition to the misinformation, misrepresentation, and breach of fiduciary duties, there have been several occasions where payments were misallocated to interest and principal. Finally, these are mixed use loans which beyond the cost of attendance and are therefore not subject to the same type of collection actions as federal subsidized and unsubsidized loans. At the time of repayment, I was told these are student loans subject to the higher education act and that any future wages could be garnished. The mischaracterization, misinformation, and breaches of fiduciary duty has damaged me tens of thousands of dollars, caused increased payments, undue hardship to the co-signor, and an inability to establish a financial future.

Company response to consumer: Closed with explanation