Consumer complaint received 2025-11-13 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Nelnet, Inc.
State: MI

Complaint narrative:
For over four months, Nelnet has failed to properly apply my student loan payments according to my explicit instructions, causing my extra payments to advance due dates rather than reduce principal balance. Despite at least dozen separate calls to customer service between XXXX and XX/XX/XXXX, where I was repeatedly assured the issue was " fixed, '' the problem persists due to what a supervisor confirmed is a technical glitch in their online payment system. This ongoing failure has cost me significant additional interest and countless hours attempting to resolve what Nelnet acknowledges is their own system malfunction. 

XX/XX/XXXX- Initial Setup I configured my Nelnet account ( Account # XXXX ) with automatic payments of {$530.00} per month. My total loan balance at this time was approximately {$24000.00} across multiple loan groups. The system appeared to work correctly initially. 
XX/XX/XXXX - Auto-Debit Payment My scheduled auto-debit payment of {$530.00} was successfully processed. At this point, I had not yet experienced any issues with payment allocation. 
XX/XX/XXXX- First One-Time Payment and Issue Begins I attempted to make an additional one-time payment to accelerate principal paydown. I explicitly checked the box stating " Do not advance my due date more than one month when I pay more than the current amount due. '' Despite this, the payment was misapplied and advanced my due dates. When I reloaded the payment confirmation page to verify, the checkbox I had selected was mysteriously unchecked. 
XX/XX/XXXX - Additional Payment of {$1000.00} I made another payment of {$1000.00}, and this payment was processed with an effective date of XX/XX/XXXX. By my XX/XX/XXXX statement, I could see that my loan groups were being paid ahead significantly - some by nearly a year. 
XX/XX/XXXX- First Call for Resolution I contacted Nelnet customer service to report the payment misapplication issue. The representative reviewed my account, claimed to correct the payment allocation, and assured me the issue was resolved and " wouldn't happen again. '' XX/XX/XXXX - Second Call The issue persisted with my next payment. I called Nelnet again and received the same assurances that it was now fixed. The representative provided instructions on how to properly submit payments going forward, implying the error was somehow on my end. 
XX/XX/XXXX - Payment of {$1500.00} My auto-debit payment of {$1500.00} was processed. By my XX/XX/XXXX statement, I could see the problem was continuing : Group AC : Due date pushed to XX/XX/XXXX ( paid ahead by one year ) Group AD : Due date pushed to XX/XX/XXXX ( paid ahead by nearly one year ) Group AF : Due date pushed to XX/XX/XXXX This clearly demonstrated that despite my explicit instructions and previous calls to customer service, extra payments were still being applied to advance due dates rather than reduce principal. 
XX/XX/XXXX - Third Call After reviewing my XXXX statement and seeing the continued misapplication, I called Nelnet once again. I was told the issue had been corrected in their system. 
XX/XX/XXXX - Fourth Call After yet another payment was misapplied, I called for the fourth time. At this point, I had been dealing with this issue for over two months, calling repeatedly, and receiving the same empty promises each time. 
XX/XX/XXXX - Payment of {$1500.00} My auto-debit payment of {$1500.00} was processed. By this point, my loan balance had decreased to {$19000.00}, but the payment allocation issues continued. 
XX/XX/XXXX- Supervisor Escalation I aked to speak with a supervisor. XXXX, a supervisor from Nelnet 's Solutions Center, reviewed my complete account history and confirmed that : My payments had been repeatedly misapplied over multiple months Previous representatives had only manually corrected individual payments without addressing the root cause No one had properly investigated why this kept happening The issue was caused by a technical glitch in Nelnet 's online payment portal The " do not advance due date '' checkbox would automatically uncheck itself after form submission, despite me selecting it every single time XXXX escalated the issue to Nelnet 's IT department and created Issue ID : XXXX to track both the technical problem and the payment reallocation requests. She took screenshots of the malfunctioning portal behavior and submitted them with the ticket. 
XX/XX/XXXX- XXXX XXXX Follow-Up Call XXXX called back the following day to provide an update. She confirmed the technical glitch existed but offered no concrete solution and no guarantee that the problem wouldn't continue. Instead of fixing their broken system, she suggested a workaround : set up auto-pay for only the minimum payment ( approximately {$260.00} ) and call in manually every single month to submit my overage payments of approximately {$1500.00}. 

I reluctantly followed XXXX 's workaround recommendation, reducing my auto-debit to the minimum payment and calling in to make my next overage payment manually by phone. During this phone payment, I specifically confirmed with the representative that this payment would NOT advance my due date, and they assured me it would not. 
However, when I checked my account after this payment was processed, my due date had been advanced yet again. Even the manual workaround that Nelnet 's own supervisor recommended failed to solve the problem they created. 

Each time Nelnet misapplies my extra payments by advancing due dates instead of applying them to principal : Direct Interest Cost : Interest continues to accrue on a higher principal balance than necessary, directly costing me money every single day Undermined Financial Goals : My explicit goal of paying down approximately {$1500.00} per month to reduce principal and save on total interest is completely defeated Wasted Time : I have spent countless hours over three months making repeated calls, explaining the same issue, and being given false assurances Forced Workarounds : I have been forced to manually call in payments each month due to Nelnet 's technical failures, creating an ongoing burden Looking at my statements : XX/XX/XXXX : Balance of {$22000.00} after {$1500.00} in payments that month XX/XX/XXXX : Balance of {$19000.00} after consistent {$1500.00} monthly payments While my balance has decreased, the improper application means I have paid more interest than necessary during this period, and my loan groups have been paid ahead by 8-12 months in some cases, allowing interest to accrue unnecessarily on higher balances.

Company response to consumer: Closed with explanation