When my PLUS loans were transferred from Direct Loans to the Federal Servicer (TIVAS), they stopped me from making payments because it took them up to 6 weeks to get the data on my loans. Then it took them 6 more weeks to figure out the repayment plan amount which I was paying faithfully each month for two years. Then when they sent out my first bill, they took the interest that accrued during this 12 week period and added it to my Principal! (capitalized interest). This mean that I would pay $900 more over the next 8 years in interest.
When I wrote to my Servicer and complained, they REVERSED MY CAPITALIZED INTEREST. They said it was done as a “courtesy!”
I suggest they did it because they do not know how to handle these types of issues.
You can save money too if this type of thing happens to you. Let us know how we can help at www.loanlook.com
Raj
CEO, Loanlook Inc.