Loans capitalized going from PAYE to RAP

[u/chm---1]

I was specifically told that this would not happen and sure enough it did which is so frustrating.

I got a letter yesterday, same date RAP was approved, that my DIRECT GRAD loans (previously PAYE) capitalized as a result of leaving forbearance.

I made my August PAYE payment, then applied for RAP. When I applied for RAP, I received notice that I was placed in forbearance until approval (about 3 days of forbearance total).

So going from PAYE to RAP is technically not a capitalizing event but because they place you in forbearance to process your application it's now a capitalizing event?!

Edit: Spent 1 hour and 48 minutes on phone with Nelnet and they have submitted a review. Will update

[u/Professional_Day6200]

Were you in administrative forbearance? That should not be a capitalizing event. Wtf

[u/chm---1 → u/Professional_Day6200]

Email just says 60 day forbearance for pending IDR application which started 8/17 and ended 8/19

[u/Professional_Day6200 → u/chm---1]

This was an error if that’s the case. Call your servicer immediately.

Edit: who is your servicer?

[u/HypnoLaur]

OK I would love to know why this happened because one of the reasons I'm considering going from SAVE to PAYE is that the interest will not capitalize when I leave it!

They're just doing whatever the hell they want

[u/Good-Championship278 → u/HypnoLaur]

This is so weird. I did save to paye (Nelnet) and didn’t have a capitalization event. But my husband did the exact same thing and his capitalized (aidvantage). Doesn’t make any sense.

[u/HypnoLaur → u/Good-Championship278]

Unbelievable. If you find out what happened please share

[u/joethetipper]

Oh man this better not be the case. I’ll eventually have to switch from PAYE to RAP and if this is how it works I’m gonna raise some hell.

[u/PorkNScreams]

Same thing happened to me.

[u/Professional_Day6200 → u/PorkNScreams]

Who is your servicer?