Hi Mark,

Here's the story:

I took out around $40K in two federally-backed school loans for graduate business school from 1999-2001. In 2003, I thought rates were pretty good at 5.5% and Nelnet was offering a .25% (quarter point) reduction for the life of the loan as incentive to sign up for something called "kwikpay" online (basically an auto-draft directly from my account each month).

So I consolidated them at 5.25% (as shown on all my statements until the beginning of this year). This year, they upped the rate to 5.5% and said nary a word - no e-mail, no call, no letter - about it. I happened to notice that the interest on the statement didn't match what I had in personal financial software after a couple months and looked into it.

Once I discovered they had made the change, I contacted customer service (several times) and was at first told my rate was always 5.5%, never 5.25% (I have a stack of statements over five years showing otherwise). Finally, someone told me that they had upped the rate because the discount had been given to me in error (which is not true - it was an offer and an acceptance of that offer, as evidenced by 5 years or performance under that agreement).

I asked for the address/phone # of Nelnet's legal department because I want to send them a letter, and was eventually told I could only communicate with customer service, and that I was lucky they weren't going back to get the rest of the money from the years when it was at 5.25% (the correct rate).

This is absolutely wrong, and even though it is only a quarter point, if they did this kind of thing to a lot of people, it might create legal problems for them. I am trying to find out if there are others who might be affected by this "bait and switch" tactic and what I can do about it.

What do you advise?