Heather,

I hope you can help with this. I recently reached out to my loan servicer (Nelnet) to get advice from switching from IBR to PAYE plan. I was previously enrolled in the IBR plan for 3 years. Based off numerous conversations with the advisor they determined this was the best thing for me. They said all I needed to do was consolidate my loans into a direct loan then I would be eligible to enter the PAYE plan. A few days afterwards I got notice that I was denied entrance into the PAYE plan because 2 (out of 22) of my loans were disbursed before October 2007. I reached out to Nelnet and they said we’re sorry for that mistake, we didn’t pick up on that…there’s nothing we can do. So now I am stuck with a consolidated loan (I consolidated solely based off their incorrect advice) that I had to re-enter into IBR (which I was previously in for 3 years) and the clock starts over at 25 years until loan forgiveness.

As you can guess, I am extremely frustrated with being deceived by Nelnet and their advisors. After multiple attempts to try and remedy this problem, there has been no resolution. Ultimately I would like the previous 3 years I had back from being enrolled into the IRB plan applied here. They said they can’t do that. Well, that is unacceptable and I was hoping to reach out to you to get advice on what’s the next best step for me to correct this problem. Should I consult legal counsel? Do I have a legitimate case here based off the fact they admitted wrongdoing.

Any help from you would be greatly appreciated! Thank you!

Mike

Incorrect and/or incomplete information from loan servicers that student loan holders have relied on to their detriment is a common theme, including in some of the other posting chains on this blog. You can attempt to reach out to the Dept. of Education ombudsman (https://studentaid.ed.gov/sa/repay-loans/disputes/prepare/contact-ombudsman) or others at Dept. of Education. I’m not an expert on this, but I think once your loan is consolidated into a new loan by the Dept. of Education, the student loan servicer cannot “un-consolidate” the loan or unilaterally grant you credits towards any type of loan forgiveness (FedLoan and PSLF being a potentially unique case). Your situation could be bolstered if you have any written or other evidence that Nelnet incorrectly instructed you on this.  Just my informal opinion on this.

Two quasi-related posts that you might want to review (about student loan servicer issues):  http://askheatherjarvis.com/forums/viewthread/8866/  and http://askheatherjarvis.com/forums/viewthread/9478/

They CAN unconsolidate a loan, (they say it’s impossible but they have done it in certain cases) but most likely they will not unless they were the ones responsible for the mistake (e.g. they added loans you never agreed to). I don’t know if they will in your case, unless you have proof someone mislead you. They will most likely abide by “its your responsibility to read the fine print, not ours” and they are very stubborn to admit wrongdoing. I’d file a complaint with the ombudsman. At least, they have the capability to speak to the right people to see if your situation can be resolved. In my case, I was already talking with the higher ups so the ombudsman couldn’t help me much. Moving on, record your phone conversations and save your emails. If they do decide to fix your situation, just know that they can move incredibly slowly to do so. It took nearly a year to straighten mine out.

hart47 - 19 September 2015 10:01 AM

They CAN unconsolidate a loan, (they say it’s impossible but they have done it in certain cases) but most likely they will not unless they were the ones responsible for the mistake (e.g. they added loans you never agreed to). I don’t know if they will in your case, unless you have proof someone mislead you. They will most likely abide by “its your responsibility to read the fine print, not ours” and they are very stubborn to admit wrongdoing. I’d file a complaint with the ombudsman. At least, they have the capability to speak to the right people to see if your situation can be resolved. In my case, I was already talking with the higher ups so the ombudsman couldn’t help me much. Moving on, record your phone conversations and save your emails. If they do decide to fix your situation, just know that they can move incredibly slowly to do so. It took nearly a year to straighten mine out.

Thank you for your responses. Currently I wrote a letter to a few people from Nelnet and a letter to the Department of Education Ombudsman. How does the process go with dealing with the ombudsman? Should I just call, or should I expect a return phone call after they receive my letter? Also, you mentioned recording my phone calls with them. How would you recommend doing that? Is there a specific App you use? I know Nelnet records all the phone calls. How do I go about getting those for my records? Would I need a subpoena? Ultimately, I would like to get my initial three years added to my current repayment plan. Anything else you can recommend to help get this granted? Thanks so much for your time

I use an iOS app called TapeACall pro, which is a little tricky to use but does a decent job. (It has you dial another number and you have to merge the calls together). Make sure your state law allows it though. States that require two-party consent won’t allow you to do so). I doubt Nelnet would release their audio tapes to you without some kind of legal request.

For the ombudsman I followed their online entry form to start the case and someone called a few days later. My agent was terribly slow about returning my phone calls, and I had to call repeatedly and lodge complaints if I wasn’t getting a response. Usually was able to get ahold of them if I pulled out all the stops, but I recall waiting weeks at some point just to get a return call. Their voicemail states they reply within 24-hrs. Not in my case!

Quick Update:

After sending a letter to the Executive team of my lender I received a phone call from them. They are aware of their mistake and are going to reach out to the Department of Education to propose a few ideas on how to fix this. The man on the phone couldn’t promise anything, but he said he would do everything in his power to fix the problem. This gave me a glimmer of hope that there could be a resolved outcome for their mistake, but I’m not going to get ahead of myself. I will keep you posted on this.

On a side note, should I still file a complaint with the Ombudsman office since my lender is reaching out to the DOE? My gut tells me I should just so they are aware of my complaint. Let me know your thoughts.

Any other advice going forward from here would be greatly appreciated as well. Thank you!

That sounds promising! Up to you regarding the Ombudsman. In my case, I was already speaking with the “higher-ups” before I got the ombudsman involved, and I only did so because the higher-ups weren’t giving me promising information. When I initiated the Ombudsman request, my servicer designated someone else as the main point of contact, instead of the person I was regularly speaking to, and I had to catch them up to date on what was going on, and it was kind of a hassle. It did give me peace of mind when I did it, but in the end I don’t think it got me anywhere :(. Maybe give them a chance to get back with you, and if they don’t, or if they give you bad information, then get the Ombudsman involved. The Ombudsman will probably tell you to wait for their response anyway…