Consumer complaint received 2023-07-10
Company: MOHELA
State: MO
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Received bad information about your loan

Complaint:
On Mohelas homepage near the bottom they have separate sections for links related to : Federal Direct Loans Repayment Options : https : //www.mohela.com/DL/resourceCenter/RepaymentPlans.aspx Deferment & Forbearance : https : //www.mohela.com/DL/resourceCenter/RepaymentOptions.aspx XXXX XXXXXXXX XXXX XXXX ( FFELP ) Repayment Options : https : //www.mohela.com/DL/resourceCenter/RepaymentPlans.aspx Deferment & Forbearance : https : //www.mohela.com/DL/resourceCenter/RepaymentOptions.aspx XXXX ( Owned by MOHELA ) Loan Modification : https : //www.mohela.com/DL/resourceCenter/CashLoans/CashLoanModification.aspx Deferment & Forbearance : https : //www.mohela.com/DL/resourceCenter/CashLoans/OptionsToPostponeRepayment.aspx Notice : XXXX have their own resource links, but the links for XXXX and Direct Loans route you to the same page ( as if there is no difference ). However, this is VERY misleading to end users who have XXXX XXXX XXXX XXXX where the federal government set the terms of these federal loans, yet they are completely owned and managed by the private lender ( in this case MOHELA ). Direct loans had a pandemic payment and interest pause that was never offered to MOHELAs XXXX borrowers, though MOHELA has notices all over their site while Im logged in informing me of the pause as an option, because again their website doesnt acknowledge the difference until you try to get the advertised relief. MOHELAs own employees didnt fully understand the differences in my loan product when I contacted them for help in the spring of XXXX. Their website failing to distinguish between these loan products over all these years is a key reason why neither employees nor customers understand. 

Now back to the forbearance options for both loan types ( Direct and XXXX ) that take you to https : //www.mohela.com/DL/resourceCenter/RepaymentOptions.aspx I happen to have a joint spousal consolidation XXXX loan XXXX XXXX passed the Joint Consolidation Separation Act last year, and President Biden signed it into public law 117-200 on XX/XX/XXXX. To date the Department of Education ( and the Federal Student Aid office ) have failed to implement this law. There is no process available to separate my loan and enter the XXXX XXXX program and I have not been offered parity with the XXXX XXXX borrowers ( who are still enjoying their pandemic payment and interest pause to this day ). 

Federal Student Aid did add updates on the studentaid.gov website XX/XX/XXXX ( https : //studentaid.gov/announcements-events/joint-consolidation-loans # notification-of-intent-to-apply-for-separation-of-a-joint-consolidation-loan ) explaining that they wont implement this law until late XXXX at the earliest however that borrowers should be placed in administrative forbearance while waiting for the implementation. I followed studentaid.govs instructions opening complaints as directed ( XXXX/XXXX/XXXX & again XX/XX/XXXX ) requesting they intercede with MOHELA to request administrative forbearance on my behalf. The first XXXX complaints were closed without any resolution. In XXXX, XXXX updated their announcement/instructions for joint consolidation loans clarifying that there were differences in forbearance offered to XXXX vs XXXX joint XXXX loans while we wait for them to implement this law. XXXX borrowers should contact their lender to request discretionary forbearance and the Federal Student Aid office encourages the private lenders to XXXX such forbearance. I opened another complaint with FSAid on XX/XX/XXXX, and this complaint too has been closed, but at least this time there was an email reply stating the following : -- -- -- -- -- -- -- -- -- -- We have received your request to separate your joint consolidation ( spousal ) loans into individual Direct Loans. The Department of Education is still developing the separation and consolidation process authorized by the Joint Consolidation Loan Separation Act. We will hold your request until the new process is available, and then notify you once you are able to apply. 
Forbearance You may be eligible to temporarily pause payments due on your joint consolidation loan until we can separate the loan by opting into forbearance. To opt into forbearance, please contact your servicer and request to be enrolled in forbearance. XXXX servicers are encouraged to XXXX forbearances until the new process is ready. In general, interest will still be added to your loans during forbearance. However, if your joint consolidation loan is owned by the Department of Education, interest wont accrue until the COVID-19 payment pause ends. 
-- -- -- -- -- -- -- -- -- -- Here the FSA office communicates directly with me explaining that they wont implement the law yet, and Im still stuck in a private loan for as long as they want to keep me there ( regardless of the law ) and while we wait, since the loan is private, Im still going to owe interest because of the private nature of my federal loan. Please contact my servicer to request forbearance. Translation : FSA wont help because its a privatized federal loan, and its up to me to deal with my private lender : MOHELA. 

As shown in my attached PDFs printed from MOHELAs website, the do not provide any acknowledgement that these loans exist or qualify for forbearance. No results are found when you search the MOHELA website for joint consolidation or spousal consolidation. The MOHELA forbearance webpage has no mention of our law being passed or offering forbearance while we wait for implementation. Instructions from the federal student aid office ( on the studentaid.gov website ) have been in place since XX/XX/XXXX recommending forbearance for joint consolidation loans, and the law has been in place for 9 months. 

There is no escape from these joint XXXX ( privatized federal ) loans that were removed from legal definition in XXXX by striking subparagraph ( C ) '' from subsection ( a ) ( 3 ) of Section 428C ( 20 U.S.C. 1078-3 ) as part of the Deficit Reduction Act of 2005 ( public law 109-171 ). Congress passed a law in XXXX to fix their previous mistake and allow us to finally exit and rejoin the rights and protections offered by truly XXXX XXXX XXXX, but the student aid office refuses to implement the law for at LEAST 2 years, maybe more. Meanwhile private lenders like MOHELA continue do as they please. They have not trained their employees, and their website shows they refuse to acknowledge us, the new law ( Joint Consolidation Separation Act : now public law 117-200 ), or recommendations from the federal student aid website.

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