Consumer complaint received 2025-05-14 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: Nelnet, Inc.
State: VA

Complaint narrative:
I have several complaints about the lack of quality service and information I have been given since XX/XX/XXXX. However, for simplicity 's sake, I will summarize my complaints into XXXX general divisions. 

My first complaint arose around XXXX or XX/XX/XXXX. I had just started my first job out of law school in early XX/XX/XXXX ( graduated XX/XX/XXXX ) and was looking into the best way to deal with my substantial student loans from law school. After researching my options, I decided the best way to tackle my loans would be to consolidate them and also, simultaneously, apply for an IDR plan. As a side note, I am well aware that several XXXX plans are currently being litigated in federal court, but I was under the impression that I could still apply for this plan despite its unsure status in the future. Anyway, before submitting both my XXXX application and my loan consolidation application, I called my federal student loan provider, Nelnet, to ask some questions about the whole process. While I recall asking about a few different subjects in this call ( which took place towards the end of XX/XX/XXXX or the beginning of XX/XX/XXXX ), the question and subsequent false answer that is most relevant to the current complaint was regarding my accrued interest and principal. By this point in time ( XXXX XXXX ), I had accrued tens of thousands of dollars in interest ( estimated to be around {$30000.00} ) due to the nature of the federal loans I had taken. I clearly remember specifically asking the representative I spoke with about this accrued interest. I asked the woman if this accrued interest would be removed, or if it would be added to my principal if I were to consolidate my loans ( at this point, the principal was between {$180000.00} and {$190000.00} ). The woman, again, explicitly told me that, when my loan consolidation application was processed, this accrued interest would be removed, and my principal would remain the same. The only difference would be that my principal would now exist underneath XXXX huge loan, not the several smaller loans that previously existed. I confirmed with her a second time that the interest that had accrued during my time in law school, and continued to accrue at that point in time, would, in fact, be removed, and my principal would stay at the amount between {$180000.00} and {$190000.00}. However, to my surprise, when I finally received notice that my loan consolidation application had been approved in late XX/XX/XXXX, I saw that the accrued interest had been added to my principle and my outstanding balance was now over {$210000.00}. I immediately called either Nelnet or XXXX ( the new loan servicer ) and explained my situation. The representative I spoke with told me that I had been given false information from the previous representative, and " by default '', they have always added interest to principal first before finalizing loan consolidations. Because I was, multiple times, given false information about my loans and what would happen if I were to consolidate them, my principal has increased at least {$30000.00}, and, as a result, my minimum monthly payments have increased significantly. 

My second complaint concerns XXXX and more false information that was given to me. Around XX/XX/XXXX, I called XXXX to inquire about the status of my IDR application which I had submitted in late XXXX or early XX/XX/XXXX. The representative I spoke with told me that my application was still being processed. She also told me that she would put my loan into an " administrative forebearance '' until the application had been processed. When I asked her what effect this would have on my recently consolidated loan, she explicitly and specifically told me that this meant my loan would not accrue any interest until XX/XX/XXXX. I confirmed with her a second time that this meant my loan would not accrue any interest from that point in time ( XX/XX/XXXX ) until XX/XX/XXXX. She confirmed that was what would happen. However, again to my surprise, when I checked the balance of my loan in early XX/XX/XXXX, the balance had increased around {$5000.00}. I immediately called XXXX. The first representative who answered put me on hold for XXXX minutes after I explained this situation to her, at which point I hung up and called again. The second representative I got in touch with informed me that the " administrative forebearance '' I was in did not qualify for a reduction of interest, and that my loans, in fact, had been accruing interest since XX/XX/XXXX. Again, this directly contradicts what I was explicitly told by another representative in XX/XX/XXXX. 

I have since made a few payments totaling several XXXX dollars this month, but this consistent false information must stop.

Company response to consumer: Closed with explanation