Nelnet student loans didn't take my automatic payment and charged me extra interest for not paying Nationwide
Have been set up for years for automatic debit payment on student loan. Nelnet decides to not take my payments, not notify me, and charge me extra interest because I didn't pay, when I did.
When called, Nelnet basically said too bad for you. Pay the extra interest, our system was working right so we didn't take your payment but you are responsibe for the extra interest.
How many people did they do this to? How much extra money did they make? Had they notified me, I could have even snailed mailed the payment. Maybe this should be a class action lawsuit!
1 Updates & Rebuttals
SLinsider
Lincoln,Nebraska,
No such thing as extra interest
#2UPDATE Employee
Mon, December 22, 2014
If there was a change to your auto-debiting system and it failed, even if you were past due when you caught those payments up, federal loans have simple interest. There's no such thing as extra interest. The interest you naturally accrue is kept seperate from the loans. If you caught it up, your normal monthly payments would have satisfied it, just not all at once.
NOW, if you used forbearance time to bring the account current instead of catching up the past due payments, that's a different story. You are then not satisfying the interest you naturally accrued on the loans and that still has to be satisfied, since it is a loan. When using a forbearance those missing payments and the unsatisfied interest become principal. That interest is now part of the loan and will accrue it's own interest since it is now principal. It's why we usually advise against it.
As for your auto-debitor no longer working (as to why it stopped, it could do that for a variety of reasons such as you went back to school, used a deferment (basically payments due stopped) or you changed banks). We can let you know one of two ways based on how you requested corresponce from your federal loan servicers when you originally took out the loans or how you updated that on Studentloans.gov on the preference page. Basically either by email (which you can log into your online account at any time whether or not we send you one montly) or by paper statement in the mail. We also start calling the numbers on the account when your loan hits 31 days past due (and sometimes earlier!). That's why it's so important to keep your contact information up to date with us.