Consumer complaint received 09/16/2017 about Student loan (Private student loan) with NELNET, INC. (VA).
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint: Nelnet misrepresented the terms of my loan, consistently misapplied my payments and continues to conceal the true nature of my loan, thereby acting in bad faith and failing to behave in a manner consistent with reasonable commercial standards of fair dealing. I have asked numerous times for Nelnet to tell me the terms of my loan. As you will see in Attachment 1, documents claiming to be repayment schedules, state on their face different numbers of payments required to pay the loan in full. Another document, Attachment 2, has another repayment begin date, and when the University of XXXX Financial Aid Counselor called Nelnet on my behalf recently ( XXXX XXXX, XXXX ), the Nelnet representative told her that I am on a 30-year repayment schedule, see Attachment 3. Nowhere in any of the documents attached does Nelnet indicate that I am on a 30-year repayment schedule. Nelnet has purposefully obfuscated regarding a provision that should be clear on the face of the notethe repayment term. 

It seems that Ive been paying just interest since my payments began in XXXX. If that is the case, then in fact Nelnet set up an interest only loan, with negative amortization, and a balloon payment spread over multiple payments. None of that was disclosed on any document that I signed, or agreed to by me.

Moreover, Nelnet has consistently misapplied my payments to them over the last 12 years, resulting in a de minimus reduction in what Nelnet claims to be the principal amount of my student loan. I have paid an extra sum each month, and instructed Nelnet to apply the additional amount to principal, but instead, they consistently ignore my instructions, hold my payments and apply the additional amount to future interest. No rational person would ever agree to such an arrangement. To repeat what I said above, this would mean that the loan is effectively transformed into a non-consensual, interest-only loan with a required balloon payment, sometime in the unknowable future, equal to the original amount of the loan. Thus, the ultimate effect of all payments is not to pay down the note, but to postpone the balloon payment and enrich Nelnet.

I consolidated student loans with Nelnet in XXXX. I asked Nelnet to provide supporting information regarding the actual bills they paid on my behalf when they consolidated the loans. All I received from Nelnet in response are three documents that appear to be copies of checks paid to US Department of Education and XXXX XXXX, in Attachment 4. I attended University of XXXX and they provided me with an accounting of what I owed while attending, and the total is approximately {$52000.00} paid by subsidized and unsubsidized direct loans. I also may have had a parent loan consolidated. When you add up the numbers seemingly disbursed by Nelnet in Attachment 5, the total comes to {$73000.00}, not {$78000.00}. Also included in Attachment 4, Nelnet sent me a letter in XXXX stating that the {$27000.00} listed on an application was verified as {$17000.00}, apparently owed to the US Department of Education, which continues to add to my confusion. The notes that I signed ( Attachment 6 ) add up to entirely different figures. Thus, I dispute the actual amount Nelnet paid to consolidate my loans. Moreover, Nelnet has never explained why I was required to sign two notes for the same amount ( {$8900.00} ), in Attachment 6, and as I mention several times, none of the numbers add up.

Finally, Nelnet did disclose, but in a totally inconspicuous manner, the fact that I may forfeit any right of forgiveness I might have by consolidating my loans. If this had been brought to my attention, and not buried in the boilerplate of their documentation, I never would have signed the notes. I worked for more than 10 years at XXXX XXXX XXXX and would have been eligible to have my loans forgiven, had I not consolidated. Since I was a public servant for over ten years, I want Nelnet to forgive my loans.

Company response to consumer: Closed with explanation