Consumer complaint received 2022-08-25 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: GA

Complaint narrative:
I took out Federal Student Loans to attend XXXX XXXX XXXX XXXX. I graduated in XXXX and consolidated my loans into a Federal Direct Consolidation Loan. The interest rate on my Federal Direct Consolidation Loan was fixed at 8.25 % and federal law prohibited the reconsolidation of the loan so I was permanently locked into an interest rate of 8.25 %. 

However, in XXXX or XXXX I began to receive solicitations from XXXX XXXX XXXX offering me a chance to reconsolidate into a FFEL loan and reduce my interest rate on my student loans. I ignored these solicitations for a long time because I was wary of changing my Federal Direct Student Loans into FFEL loans. 

But in XXXX I received a solicitation from XXXX XXXX ( XXXX ) with XXXX XXXX XXXX warning me that my opportunity to lower my interest rate by reconsolidating into a FFEL loan was about to close. And, since I was desperate for any opportunity to lower my interest rate, I contacted XXXX at that time. 

XXXX offered me two incentive choices : ( 1 ) one would have reduced my interest rate by 1.625 % after 12 months of on time payments but if I was ever late thereafter on my loan payment, I would lose the incentive ; and ( 2 ) the other would only reduce my interest rate by 1 % and I would have to make 36 on time payments to qualify but once I had made 36 timely payments and obtained the incentive, I would not lose it, even if I made a late payment thereafter. 

Induced by the promised second incentive, which would only reduce my interest rate by 1 % and required me to make 36 timely payments to obtain it, I agreed to reconsolidate my Federal Direct Loan into a FFEL loan. I chose the second option because I preferred a secure reduction over an insecure reduction even if it took me longer to obtain and reduced my interest rate by a smaller amount. I knew the odds of never being even a day late on my payment over the course of 30 years were against me. 

My loans were initially serviced by XXXX. In time, I obtained the benefit, XXXX reduced my interest rate to 7.25 %. XXXX later attempted to remove the incentive after I was a day or so late on my monthly payment but, I protested vehemently until XXXX finally agreed to have the issue researched to determine the incentive conditions which had induced me to reconsolidate. 

I was then contacted by XXXX who said he was from the XXXX XXXX XXXX. XXXX explained that it would take some time to research my loan but assured me he would get back with me as soon as the research was completed. I did not think to get XXXX last name but, he gave me a phone number by which I could contact him. The phone number he gave me was XXXX XXXX. After a few weeks XXXX contacted me again and said he had determined that I was correct about the incentive terms I was offered and that once obtained, the incentive could not be removed for a late payment. XXXX restored my interest rate to 7.25 %. 

My loan was later transferred to Great Lakes and then in XXXX to Nelnet. Nelnet has been determined ever since to remove my incentive and return my interest rate to 8.25 %. Nelnet first claimed I had lost the incentive on or about XX/XX/XXXX due to an alleged late payment they discovered when they reviewed my account after it was transferred from Great Lakes. The point of their review of my account was probably to find some way to disqualify me from the incentive. After they claimed I was disqualified I contacted them and explained that I had already been through this with XXXX because XXXX also thought a late payment would disqualify my loans from the incentive but discovered otherwise after they finally agreed to have the issue researched. And that XXXX had sent me a letter confirming that the incentive could only be removed if I defaulted on my loans. Nelnet told me to send them the letter, and I did. 

Nelnet then sent me a letter dated XX/XX/XXXX which stated that they had reinstated my benefit ( s ) with modifications to the qualification criteria described therein, infra. The modification Nelnet stated was that to remain eligible before and after earning [ my ] borrower benefit ( s ) : Nelnet must receive payments no later than 15 days after [ my ] due date. I was shocked when Nelnet sent this letter because Nelnet had no authority to modify the terms of the promised incentive upon which, I had relied and been induced to reconsolidate my XXXX  Loan into a FFEL loan. 

In XX/XX/XXXX, I apparently paid my loan a day later than the fifteen stated days allowed under their modified incentive terms, and I received a letter XX/XX/XXXX, stating that my loans had been disqualified and the incentive removed. 

I have repeatedly called them to resolve this dispute about the terms of my incentive and have it restored as promised but, my efforts have been to no avail. The last person I spoke to stated that he would send it over to their research department but, I never heard anymore from him or anyone else. At least he was nice to me and polite throughout our entire conversation. The woman I spoke to before him was extremely rude. When I told her XXXX had already determined that I could not be disqualified by making a late payment she said, Well, XXXX was wrong. '' I told her the terms of my incentive had been researched, and that the person who researched it and confirmed that once obtained it would not be lost by a late payment, told me that he had never seen one like mine before, And she became extremely rude and said she seen loans where the incentive, once obtained, was not lost by a late payment but mine was not one of them and she could tell this by the numbers on my loan. I guess it never occurred to her that what the researcher meant was that he had never seen one with those numbers that, once obtained, was not disqualified for a late payment. 

If I did not get the incentive terms I was promised, I was defrauded by the lender. If the lender gave the terms I was promised but Nelnet wont honor the promise, Nelnet is defrauding me. Since XXXX had my incentive researched by the XXXX XXXX XXXX and the XXXX XXXX XXXX confirmed that the terms of my incentive are exactly what I say I was promised, it is more likely that Nelnet is at fault. 

Nelnets refusal to take my claims seriously enough to confirm the terms of my incentive by having my original FFEL loan documents researched back to the date of consolidation makes me feel powerless and hopeless and ultimately, very depressed. 

I need my incentive restored immediately because I am about to reconsolidate my loan back into a Federal Direct Consolidation Loan. I hope to benefit from Bidens stated plan to increase and speed up forgiveness rates for borrowers enrolled in the income-based repayment plans by crediting the entire time period in which the loans have been in repayment regardless of whether the loan was enrolled in income-based repayment the entire time. My loans have been in repayment continuously since XXXX. Next year will be my XXXX year in repayment under one plan or another. I have been enrolled in the income=based repayment plan since XXXX or XXXX. If I am credited with the years my loans were in repayment before I entered income-based payment, I may be eligible for forgiveness next year.

Company response to consumer: Closed with explanation