Consumer complaint received 2023-10-25
Company: MOHELA
State: MO
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
I received a letter from MOHELA via the internal messaging system on XX/XX/2023 XXXXXXXX XXXX CST, Subject : Administrative Forbearance. I received notification of this letter via email on XXXX XXXX, 2023 at XXXXXXXX XXXX  CST. The attached letter stated : MOHELA has placed an Administrative Forbearance on your account. 
Carefully read the back of this page and the enclosed Loan Details regarding the forbearance period for your approved loans. 
If your monthly payment is {$0.00} or more on an income-driven repayment ( IDR ) plan prior to being approved for this forbearance, you may not be using the full benefits you are entitled to under the IDR plan. If you are applying for an IDR plan or another option, please provide the necessary documentation to complete your request. You may decline or request to end the forbearance by calling us at XXXX. 
If the forbearance was not approved for some of your loans and you would like more details, please contact us. If you are unable to make payments, login to mohela.com to determine what other repayment options may be available to you. 

I did not request the administrative forbearance and as interest had resumed due to the end of the governmental loan pause as of XXXX, 2023, I wanted to resume payments. 
The letter above stated that I could decline the administrative forbearance. As such, I contacted MOHELA via telephone on XXXX XXXX, 2023 via the number provided above. I waited to be connected with a representative for several hours and then spent additional time with a representative requesting to decline the forbearance and begin payments. There were two calls total time was 2 hours and 41 minutes. During this call, I was informed that the administrative forbearance had been decline, that my account would be updated to payment status and that my first payment would be due XXXX XXXX, 2023. I was also told that this payment would be considered a qualifying payment for programs such as Public Service Student Loan Forgiveness ( PSLF ), which I am in the process of applying. 

I also submitted an internal message on XXXX XXXX, 2023 requesting the following : Subject : Deferment and Forbearance Attachments ( click to open ) : Sent Date : XX/XX/2023 XXXXXXXX XXXX Body : Your Question : Hello, I received a letter stating that an administrative forbearance was placed on my account starting XXXX XXXX, 2023 and ending XXXX XXXX, 2023. The status of my loan is " repayment '', however, there is no payment due date and the minimum reflects {$0.00}. I have several questions about the administrative forbearance. 1. Will I continue to accrue interest while in administrative forbearance? 2. Will the month of administrative forbearance count as a qualifying payment for programs such as PSLF? 3. Can I still make a payment during administrative forbearance? If so, will that payment count as a qualifying payment toward programs such as PSLF? 4. Can I apply for PSLF during administrative forbearance? 5. If I desire, can I decline the administrative forbearance and begin to make payments toward my student loans? Thank you for your timely response to these questions, XXXX This message was never responded to. 

I sent a follow-up internal message on XXXX, XXXX, 2023 requesting the following : Subject : Deferment and Forbearance Attachments ( click to open ) : Sent Date : XX/XX/2023 XXXXXXXX XXXX Body : Your Question : Good morning, I have not received a response to my inquires below. I did, however, reach a representative on the phone XX/XX/2023. The representative work with me to decline the administrative forbearance and set payments to begin this month. This is not reflected on my account, though. Please advise, had the administrative forbearance been decline and will my payment be due in XXXX, XXXX? 

This message was never responded to. 

I continued to monitor my account for the next several weeks waiting for the request above to be processed and my payment to be reflected as due. I contacted MOHELA again on XXXX XXXX, 2023 as my account was still reflecting administrative forbearance and my payments were not due. Again, I waited on the phone for several hours to speak with a representative and several more discussing the issue. The call in total was 4 hours and 29 minutes. During this second call, I was told that my request to decline the administrative forbearance had not been processed. There was a ticket for my account but the request had not been processed or closed on MOHELAs part. Again, I requested to decline the administrative forbearance and begin payments. I was told that the request would be processed and closed but that it would take 5-7 business days to be reflected on my account. However, that if I wanted to make the payment for XXXX, it would be due on XXXX XXXX, 2023 prior to the processing of my request. Also, I was told that MOHELA could not guarantee that this payment would count as a qualifying payment for programs such as PSLF because payments made to an account in forbearance do not count as qualifying payments. I was told to make the payment anyway, despite the fact that my account still reflected administrative forbearance and that my payment was not considered due and that they could not guarantee it would be considered a qualifying payment as Federal Student Aid ( FSA ) provides the final determination regarding qualifying payments. 

I asked MOHELA to provide documentation of my original request to decline administrative forbearance on XXXX XXXX, 2023 and was denied any form of documentation that I made this request or that MOHELA was negligent on their part to process the request in a timely manner for the XXXX payment. I was denied an email regarding the statement of my account and request. I was denied an internal message regarding the statement of my account and I was denied copies of the internal communications and tickets regarding this request and MOHELAs failure to process it. 

On XXXX, XXXX, 2023, I made a payment in good faith via MOHELA payment system despite the fact that my account still did not reflect payment status and was in administrative forbearance. Because my account was in administrative forbearance, I was unable to submit the monthly payment based on certain loan criteria ( e.g., highest interest rate, proportion of debt to interest, highest loan ). Rather, I was prompted to split the total payment between XXXX loans, making XXXX individual installments totaling at least the minimum that should have been due. Additionally, it is unclear if this payment was applied to my account for the month of XXXX, per MOHELA policy, Payments received during an in-school ( more than 120 days after a disbursement ), grace, deferment, and/or forbearance period are applied to future installments only if your new monthly payment has been disclosed, as my account was still in forbearance status at the time of the payment.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation