Though I was able to get through my undergraduate with very few student loans, my graduate education was a different story. I am the type to say that one should invest in their education, but I must admit that my going back to school to get my masters was truly to fuel my own ego. I was already running Financial Beginnings so obtaining the masters did not further my career or pay. I just really love school and quite honestly if I felt I could afford it I would continue on to get my PhD.

After finishing my masters I was left with paying for three student loans to three different companies. Last year I received an offer to consolidate from one of my loan providers and I proceeded with it. Not only would it lower my payments, but it also would make it easier for me by only having to make one payment each month instead of three.

I completed the loan consolidation paperwork early last summer. For some reason the loan servicer only brought over one of the loans now leaving me with two student loans. I contacted them and they asked me to provide the information again in order to consolidate the third loan, which I did late last summer. Since then there’s been little information until early this year when I started hearing more from the finance company that my other loan would soon be paid off and estimating the monthly payment.

In the middle of March my loans were paid and the payment was then recalculated. Unfortunately I had since moved and did not receive the notice of this until after the new payment date had already passed. This was unfortunate for me because my payment went from $80 to $280 and the three week notice they provided for this was not enough time to go through the mail forwarding process and they attempted to take an additional $200 out of my account which I was not expecting. Still this is a moot point to my story.

In mid-April another notice was sent informing me that the loan payment had changed again and increased by $21 because they had received a refund from my previous lender of approximately $1800. What? They received money back which resulted in my loan amount being less and that caused my payment to go up? They said this was my fault because I kept making payments on the other loan. Well of course I would continue to make payments because if I had not then my loan would have been in default for 7 months. It didn’t make sense to me and quite honestly to many of the six people I spoke with during a 1 ½ hour conversation on Thursday that the decreased principle would result in a higher payment. I was assured that all of the loan terms stayed the same, but because the principle balance went down it caused my payment to go up. I assured them that my Master in Finance (which the loan paid for) taught me enough to know that was not mathematically possible. Unfortunately the answer I received from them was that the calculator says it’s so, so it must be so. I went round and round with six people, getting bumped from department to department because nobody was willing to explain the calculation only to find that I had wasted a huge portion of my day.

So now what? My husband says it’s only $21 and we can afford it, but that’s not the point. One of the examples I gave to the loan representative was that if the previous lender would have sent me the $1800 I could have sent them the amount as a payment and my payment would not have gone up. She agreed, yet did not understand why I was laughing when she agreed.

Now I will be sending a dispute letter via certified mail. I will have to dig through the paperwork they sent to me (which is surprisingly little for a $50,000 loan) and see if I can find any information to help to explain why my loan payment would go up when the principle amount went down.

My worry is that because the loan is through the U.S. Department of Education and from what I know about student loans they don’t have the same rules as other loans that nothing is going to happen. So if the rules are different for student loans do they bare the same responsibility to the Truth in Lending Act? I guess I’ll be doing some research this week.