Consumer complaint received 2026-03-12 00:00:00
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: IOWA STUDENT LOAN LIQUIDITY CORPORATION
State: MI

Complaint narrative:
I have a loan that originated in XXXX for {$8000.00} roughly. I have since paid over {$23000.00} on that loan and still have a balance of over {$3000.00}. Red Flag # 1 Balance Grew 41 % Before You Made a Single Payment Between XX/XX/XXXX ( loan transfer ) and XX/XX/XXXX, XXXX recorded 17 consecutive quarterly " Interest Capitalization '' events. During this period, accrued interest was added directly to the principal balance rather than being paid. This caused the balance to grow from {$8000.00} to {$11000.00} an increase of {$3300.00} before any principal reduction ever occurred. All subsequent payments were calculated against this inflated amount. Red Flag # 2 54 Payments Made XXXX Progress on Principal Of 199 total payments, 54 payments totaling {$4700.00} went 100 % to interest and {$0.00} to principal. These occurred across multiple periods ( XXXX ). On those dates, the outstanding balance did not decrease at all despite the borrower paying. This pattern is consistent with a minimum payment that was set too low to cover accruing interest. Red Flag # 3 Balance Completely Frozen for ~2 Years Despite Payments From approximately XX/XX/XXXX through XX/XX/XXXX, the outstanding balance was essentially locked at {$11000.00}. Over this entire stretch roughly 2.5 years every monthly payment ( approximately {$80.00} {$88.00} ) was consumed entirely by interest. Not a single dollar reduced the principal during this period. This represents a structural problem with how the minimum payment was calculated. Red Flag # 4 62 % of All Money Paid Went to Interest Of the {$23000.00} paid over 23 years, only {$8900.00} ( 37.9 % ) went toward principal reduction. The remaining {$14000.00} ( 62.1 % ) was consumed by interest. On a properly amortizing loan of this size, the interest-to-principal ratio should have been roughly reversed after the first few years. Red Flag # 5 High Interest Rate ( ~8.5 % ) for 23+ Years Based on analysis of the interest charged relative to the outstanding balance at the time of each payment, the implied annual interest rate is approximately 8.4 % 8.7 %. This is at the high end of private student loan rates for XXXX. Additionally, the rate appears to have remained fixed at this elevated level throughout the entire 23-year loan term with no rate reductions, no refinancing offers, and no interest rate benefit disclosures found in the transaction history. Red Flag # 6 22 Interest Capitalization Events Over 18 Years The transaction record shows 22 separate interest capitalization events between XXXX and XXXX, totaling {$4100.00} added to principal. While some early capitalizations ( XXXX ) may be explainable as an in-school or grace period, later events in XXXX and again in XXXX suggest repeated deferment or forbearance periods whose terms and authorizations are not explained in this record.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation