Consumer complaint received 2023-04-11
Company: MOHELA
State: OH
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 took out my first student loan as a freshman in XXXX. According to Mohela, I borrowed {$64000.00} in total. Even though I've been paying on these loans for almost 40 years, I still have almost XXXX payments to go, totaling nearly {$45000.00} more. If all the payments I've made were added up since XXXX and that amount was compared to the amount I borrowed, I've surely paid off what I borrowed ( and then some ) and certainly shouldn't have to continue paying until XXXX, which is when my loans are scheduled to be paid off. In addition, my understanding is that student loans should be discharged once someone has made payments for 20 years, which Ive also done. From XXXX until XXXX, my loans were serviced by Direct Loans. I was making payments when I could during this time, in between deferments due to going back to school or financial hardship. My payment was {$310.00} a month, which is all I could afford back then. I've been unable to track down how many payments I made during this period of two decades and for how much, but I know it's in the thousands. In XXXX, my loans were transferred to Mohela ( with the same payment ), who serviced them until XXXX, at which time I did a refinance with XXXX. I would estimate that I made somewhere between {$30000.00} and {$40000.00} in payments during the decade that Mohela serviced my loans. While talking with a Mohela representative recently, I was told that I made over {$12000.00} in payments between XXXX and XXXX alone, but this all went to interest, so my debt actually increased during those years. I was basically throwing my money down a well ( and a lot of it ). During a XXXX phone conversation with another Mohela representative, I was told very directly, " You'll never pay off your loans at this rate. '' This conversation is what led to me doing the refinance with XXXX. I had no choice. The refinance dropped my interest rate from 8.5 % to a fixed rate of 5.47 %, with a monthly payment of {$570.00}. By XXXX, I was in a better financial situation due to advancing in my career, so I could afford a higher payment. The refinance was done at the beginning of XXXX and my payments began that XXXX. The total amount refinanced was {$70000.00}. Remember, I only borrowed {$64000.00}, so the 30 years of payments I had made up to that point did nothing to reduce the amount I owed. Instead, my debt increased by several XXXX dollars. In the last XXXX years alone, I've made over {$48000.00} in payments, yet still owe nearly {$45000.00}. There's no way this is right and I have no idea how its even legal. One of the things that makes this so frustrating and difficult is the fact that my loans have gone from one company to another. Since they're not in a straight line, it's very hard for someone to resolve this kind of a mess on their own. I've spoken with several different people over the years from the Federal Student Aid Department, Mohela, and XXXX. I was told many different things and the explanations I was given are often contradictory. One of the companies will tell you to call another, and that company will tell you to call the first. I feel like I've been running in circles for decades about this. I can't help but become overwhelmed with the feeling that this is incredibly unfair and wrong. Unfortunately, Im not the only person who is drowning in student loan debt due to this type of predatory lending. Someone shouldn't have student loans they took out when they were XXXX still hanging over their heads for over 40 years and continue paying on them well into their XXXX, despite making tens of thousands of dollars in payments, far exceeding the original amount borrowed. If I'm required to make the remaining XXXX scheduled payments over the next eight-plus years, that's exactly what I'll do. I will have paid somewhere between {$120000.00} and {$150000.00} when I only borrowed {$64000.00}. In addition, my loans won't be paid off until XXXX when I'm XXXX XXXX XXXX. Meanwhile, Ill pay off my XXXX, {$120000.00} mortgage in one-third the amount of time itll take me to pay off {$64000.00} in student loans. That's insane. While trying to resolve this, I first reached out to the White House. Ive attached the response I got, which includes references to President Bidens student loan relief plan ( I was a Pell Grant recipient, so Im eligible for the full {$20000.00} in relief ). The response also directed me to the Federal Student Aid website ( studentaid.gov ). In one of my conversations with XXXX, I was also advised to go to that site and file a complaint about my case. I did that on XX/XX/XXXX and received a response on XX/XX/XXXX, which Ive also attached. If my understanding of their response is correct, my loans arent eligible for any kind of federal relief because they were refinanced with a private company ( this is one of the things which contradicts what I was told over the phone ). Of course, when companies like XXXX or XXXX encourage you to refinance your student loans with them in their TV commercials, they dont tell you that. As in my case, you dont find out until its too late. I took FSAs response as being the sorry about your luck explanation, which simply isnt acceptable. Ive also attached a current screenshot from my XXXX account, which shows the details of my loan, including the number of remaining payments and the exact amount I still owe. I first filed a complaint with XXXX on Monday, XX/XX/XXXX, since they are the current loan servicer. They responded later that day and denied my claim. I've also attached their response. 
Please let me know if there's anything else you need from me. Thank you for your help. I really appreciate it!

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