July 8, 2016

To: Nelnet Education Loan Servicing, The U.S. Department of Education, the FSA Ombudsman Group
, and the Better Business Bureau of Nebraska

CC: Loretta Lynch, Barbara Lee, Barbara Boxer, Dianne Feinstein, and Barack Obama

BCC: The Nervous Breakdown

From: Ariel Gore, Oakland, CA


I am writing to make a formal complaint against Nelnet Education Loan Servicing and, by extension, the U.S. Department of Education that empowers them, for a pattern of willful incompetence that I believe amounts to fraud.

I entered college as a young single mom in 1990. I was told that an education was the road out of poverty. I did not take out any private loans. I took out the maximum government student loans recommended to me, and was assured they were reasonable based on the educational products that were being sold to me. Those loans amounted to less than $40,000. I did well in school and graduated from Mills College with honors in 1994. Instead of studying creative writing at the graduate level, I opted for a more “practical” master’s program in journalism and graduated from the University of California at Berkeley in 1996. I have been on an Income-Contingent / Income-Based Repayment Plan since 2002 and have always made the required payments on time.

Last month, Nelnet told me they had recalculated my payment to $744 per month for the year for the loans that they service. (I pay an additional $155 monthly to Navient, $206 monthly to American Education Services, etc.) When I went to make my $744 payment online yesterday, I saw that they had changed that monthly figure to $1,222 based on a sudden decision to include my spouse’s income in their calculation, something that they didn’t do last year, repeatedly assured me they would never do, and now tell me they have always done.

I earned $900 a month last year. This is about average for a writer in this country. When I was an adjunct English professor, I earned even less. This is the career I was educated for. I work full time.

According to the Author’s Guild, writer incomes are down 30 percent in just the last six years, so my poverty status is not a personal or professional failure but rather an industry-wide phenomenon based on the cultural devaluation of my labor.

Nelnet’s sudden change in policy is just the latest sudden and unexplained move in a long history of sudden and unexplained moves by Nelnet in particular and by other various servicing companies empowered by the U.S. Department of Education that I have dealt with over the past quarter century.

Nelnet refuses to communicate in writing and their agents refuse to give me their full names and refuse to give confirmation numbers for actions they claim to be taking, so the endless misinformation and contradictory statements of policy are undocumentable.

Agents give me made-up tax advice, one threatened to take my belongings (despite the fact that I have never made a late payment), and many try to trick me into various “help” schemes that will ultimately increase my indebtedness.

Nelnet has reset my loan forgiveness date, repeatedly changed their story about how their Income-Contingent or Income-Based figures are calculated, told me off and on that the Income-Contingent and Income-Based programs are the same thing or different, wasted hours of my time trying to sell me financial products they realize at the last minute I’m too old to qualify for, and lied to me about the financial consequence of getting married.

I never signed up to deal with Nelnet and I do not want to be in business with them.

I have been making on-time payments since at least 2002, so this is not a case of a deadbeat.

I have never been in default.

I am not interested in any solution that will trigger a compounding of interest, a resetting of the “forgiveness” date, an extension of the payment period, or anything else that will result in the government profiting from my poverty any more than it is already poised to.

I am now being penalized for being married. When I talked to Nelnet before I got married in 2014, they guaranteed me that this would not happen and that if I included a letter that my spouse was not responsible for my loan in my annual recalculation, her income would not be counted in the Income-Contingent or Income-Based plan. There is precedence for this in other government financial calculations, such as calculating child support based on one spouse’s income and not the stepparent’s.

My spouse did not graduate from college and took out no student loans and never agreed to take mine on and is now expected to contribute fully one third of her take-home pay to my loans. She is over 50 years old and neither of us have health insurance. How could we afford health insurance?

I would not like to get a divorce, but the government is forcing me to choose between my marriage and my ability to feed my 8-year-old child.

When I asked the Nelnet “team leader” if there was anything to do about this besides get a divorce, he began lecturing me about all the money I would lose by giving up my “married filing jointly” status. This is unethical because he is not a tax professional. If he was a tax professional or knew anything about U.S. tax law, he would know that “head of household” is in fact a more beneficial tax filing status than “married filing jointly.” His tax scare tactics were, however, in line with the way Nelnet makes a habit of talking to me—peddling misinformation with the obvious goal of profiting off my gullibility, poverty, and distress.

The last time I spoke to a Nelnet agent, her answers seemed so unconnected to my questions, it was as if she were typing key words into an answer-generator not unlike Siri.

I am being held to all my promises with regard to these loans, including promises made because I was lied to as a young single mother. The government has not held themselves to the same standards and instead used their “servicing companies” to lie to me, change their policies, and change their stories time after time always with the result of increased profits for them. When mistakes are made, they are never in my favor and the new agents—who still won’t say their name—say they “can only help you moving forward, we can’t do anything about the past.”

I have repaid the government for going to college twice over by now, and I remain an indentured servant with an indebtedness that continues to snowball at 8.5% interest—currently about $17,000 per year compounded annually.

When Nelnet took over servicing my loans in 2012, they reset the forgiveness date to the date they took the loans, and later told me that they had behaved within the law in doing so as they briefly grouped my original student loans in with the parent loans I took to help my daughter go to college, giving me a short-term “in-school deferment” and thereby erasing my previous 10 years of on-time payments. I wouldn’t have taken out parent loans for my daughter if I had known doing that would in effect add another $100,000 to my own loan burden. I was simply trying to help her avoid the lifetime of indentured servitude that my own education has resulted in.

Nelnet agents have also given me a number of different stories as to why they reset my forgiveness date including denying that it has been reset at all one day and then insisting that it has indeed been reset the next.

I borrowed less than 40,000 to go to school. I have been making the asked-for payments my entire adult life. I am 46 years old. My loans have now snowballed to over $120,000 for myself and an additional $60,000+ for helping send my daughter to college.

The only solution Nelnet offers me includes capitalizing the interest in a new way so that the government can profit at least an additional $100,000 via these predatory loans.

I believe all of this is unethical at best.

My loan balances should be cancelled based on money already paid by me and the emotional distress of having to deal with Nelnet.

I look forward to a confirmation of the cancellation of my loans.

Failing that, please fix all records to reflect that I have made on-time payment in an income-contingent or income-based program since 2002 and never agreed to be switched from one program to the other, therefore my loans are 14 years into the forgiveness period, which should not have been interrupted or changed in any way when Nelnet took over as the servicer, adjust my monthly payments so that my spouse’s income is not included when calculating my payments, assign me to a different servicing center—anyone but Nelnet—and advise your agents to just admit they have not read the manual and they have no authority anyway.

Thank You,

Ariel Gore

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ARIEL GORE is the award-winning author of the novel We Were Witches (The Feminist Press), and the memoirs The End of Eve (Hawthorne Books) and Atlas of the Human Heart (Seal Press) as well as six other books of fiction and nonfiction. She teaches writing online at www.literarykitchen.com.

11 responses to “An Open Letter to the U.S. Department of Education”

  1. Stephanie says:

    My husband and I are both in student debt over $100,000 each, and much of that is interest as well. He is 45, I am 37. I have no hope it will ever be paid off; we merely try to manage the payments at this point. Praying for a sweeping forgiveness plan and major reforms. This system that rewards the top few percent with profit and debt-free lives and punishes the rest of us for accessing education and dreaming of a middle-class existence is crippling our economy.

  2. sara says:

    That makes me so mad! I paid mine off –it took me ten years. But I never was scammed by interest and loan changes the way you were.

    However, my sister and her husband pay over $1000/month in student loan payments at the interest rates you’re describing. And they are trying to raise their kids as well.

    The name nelnet even sounds fraudulent.

  3. Since I teach at a community college, and since I have made regular payments on my school loans, also taken out when I was at Mills College, I may be eligible for loan forgiveness. I am just at the very beginning of doing the paper work, but reading this makes me terrified to even proceed, to even look at what I owe. Last time I checked, it seemed like I owed what I originally owed, 48k (for 3 years of undergrad and 2 of grad school), or somewhere close to it. I logged out of my account because I couldn’t bear to look at the number any second longer, both wondering if it was some kind of mistake and choosing to be in denial. I like Ariel, chose a loan holder randomly. I’m sure glad that I didn’t wind up with Nelnet, and if I had, I would not have been able to keep my wits about me good enough records to write so eloquently about as Ms. Gore has.

  4. Jill says:

    I’m so glad you posted this. You aren’t alone.

    In 2007 some legislation was passed that would forgive loans to public servants after ten years of certain types of payments on certain types of loans. I was so excited about it I got all cozy with the Dept of Ed and they kindly set me up in an eligible account with eligible payments. Six years in they changed what type of payments “counted” and I had to start my ten years over again. Um, they advised me in 2007. Can they do that???

    There are a lot of common themes here including misinformation, lack of accountability, and, yes, preying on my original need as a struggling single parent to lift myself by my bootstraps and get educated. Ironically, I’m paying for my daughter’s college now while simultaneously paying my student loan, the majority of which I borrowed to pay for daycare so I could go to college. In other words, I’m paying her daycare and college at the same time.

    We demand change.

  5. Carrie says:

    I have been debating the choice to return to school. My thoughts were pretty solid… I’d take out student loans, continue to work, bust my ass, and come out prepared to make more money, pay off my loans, and of course, feel a sense of a accomplishment having finally earned a college degree. My children would witness their mother fulfill a dream; I’d be better equipt to help them fulfill theirs. Now, I’m not so sure. How sad that this day in age, people either choose to not attend college because they can’t afford it, or find themselves indebted to the system if they choose to go anyway.

  6. Margaret says:

    Right after graduate school, I consolidated my loans and did what I thought was supposed to be the right thing–got the interest lowered to 6%. I originally was with Wells Fargo. My loans were a total of $51K–a tiny bit of undergrad that I paid off within two years and then two stints of graduate school and post doc work.

    My loan has been sold 11 times. The two consolidated loans are now separate and the interest is back up to nearly 10%. I live in extremely rural America where my mother and family need me often. Everyone up here has five part time jobs and piecing income together is how we survive. I explain this continually when the student loan mafia calls and wants to know –am I looking for a full-time job? Something that pays better? Why aren’t I moving to a big city?

    There is judgment in their voices on the phone? Why are you a failure? Why didn’t you major in something else? WHy did you you think you should have the privilege of graduate school?

    I am supposed to have income based repayment–but because they (ACS) screwed up on paperwork , they processed it six months after I said I initially needed ir. Then I get a letter one day—yes you can have income based repayment but there was six months it wasn’t covered so can you pay $26K right now?

    If I had $26K disposable income wouldn’t this be paid by now?

    I’ve always paid something–it’s never went into default since it’s beginnings in 1998. I’ve at least paid $20K of this loan but you wouldn’t know it because they now say my loan is $100K.

    Sometimes I talk back to them when they say something stupid like “sorry, there’s nothing we can do.” And I think to myself and sometimes say–you totally could do something. If I was a multi-national corporation , if I was part of the elite, you could bail us all out and make this disappear. They just don’t because they don’t want to. And given this hits gen Xers so hard and given that we are the smallest generation, who gives a shit about us?

  7. Jared says:

    My wife graduated from a Doctoral program in 2013 (in Physical Therapy) with roughly $170K in loans. Admittedly, she took out more than was necessary, but what is done, is done. In the three years since graduation, she/we have paid about $800/mo. on an income based repayment plan, but have seen the balance grow to $180K. Additionally, FedLoan Servicing sent us paperwork 3 months ago asking us to resubmit info to continue on this repayment plan. Our “re-“application was inexplicably denied, and since we file our taxes jointly, they bumped our monthly payment to $2600 a month! WTF is that? We’ve resubmitted the application two additional times already, but it gets sent back with a vague note that says an error was made, and to re-apply. $2600 a month!! We can’t afford that. Have no clue what to do…. Happy to pay back what we owe, but give us a break! Lower our interest rates. Our gov’t bailed out the corrupt big banks with .75% interest rates, so what about us. Sallie Mae was supposed to be a not-for-profit entity…. Just one lie on top of another

  8. Jennifer Fulford says:

    The August 2016 issue of Consumer Reports blasts this problem as well. Student loans are veritable money traps for many, and hopefully your voice and many others will begin the wave of change. This is criminal. Blame it squarely on private equity firms that are tied up in the mess.

  9. Barbara manning says:

    First, let me say that I’m very sorry that you’re being victimized by a predatory lender. My only advice to you is to allow everyone to copy and paste your letter, write a cover letter to it and mail it (yes mail) to your state congress people and to the White House. If you can afford the time and expense, send your letter to every Senator.

    Continue to build awareness and a following with a social media page — Facebook or any one you choose. Seek other organizations or individuals that also have been victimized by predatory lending practices. Build your network. Keep the pressure on. You may not see the point, but you must find your tribe and unite against this heinous business practice. Payday loans are being forced out because of their predatory
    lending practices — this outfit could be next.


  10. TW Andrews says:

    I’d consider talking to a lawyer. This sounds incredibly fishy, and like a class-action lawsuit waiting to happen.

  11. This is so important. Can’t be repeated often enough – all the stories above and my own story of education-related debt. My husband and I had debt for over 20 years – monthly payments for 20+ years. We were able to pay it off because my husband earned more than Gore or I have the potential to earn. Not everyone has that earning potential or is married to it. My husband and I had about the same amount of debt Gore has, but the other awful and criminal selling of loans which happened for us often in the beginning until we went through debt relief counseling which also took us some years to overcome – credit score wise. Why is this happening? Continually? Good on Gore for writing this thing that affects so many people whose are attempting to get an education, to better their options in life, to not live in debt, and yet…etcetera.

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