Consumer complaint received 2023-11-04
Company: MOHELA
State: AZ
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 need to file a complaint against my student loan servicer Mohela. I have both subsidized and unsubsidized loans currently in forbearance. I want to pay the interest, but they won't let me specify which loan to apply the payment to. As a result, one of my loans is continuing to compound interest. 

The first time I called on XX/XX/XXXX, it took over two hours for a callback, and I spent almost three hours on the phone, including an hour waiting for a supervisor. The representative suggested online payment allocation, but their website clearly states that it's not possible to target subsidized or unsubsidized loans online. It says one must call or submit a standing payment, which I have done. 

Once I got ahold of a supervisor she assured me they could submit a request to split payments evenly between both loans, covering the interest and then splitting the remaining amount to the principal of both loans. It took an hour for the supervisor to process this. However, after a couple of weeks, I made another payment which was only applied to a single loan. This payment was made on XX/XX/XXXX. 

On my next call ( XX/XX/XXXX ), there was no callback option, and I waited for over two hours to get through. The representative didn't seem to have clear notes from the previous call ( XX/XX/XXXXXXXX XXXX  ). When I asked if she saw the notes from the supervisor I spoke with the first time I called and the request for my payments to be split evenly, she said, " I'm sorry, there is no request for that, and no standing payment instructions on the account. '' She went on to say that I could use the website to allocate payments to the individual loans. I had to politely correct her and explain to her what the payment page states on their own website. 

I expressed my frustration with the situation and she assured me that she would be able to apply my last two payments appropriately. However, she put me on hold, and I waited for over an hour. I thanked her for that but raised the concern of future payments. She insisted that I needed to submit an online form to ensure online payments were split evenly after she had no idea about not being able to target my loans directly, I explained I already did that and sought confirmation for future payments. 

She put me on hold again to consult with a supervisor, and upon returning, she stated that the form for the standing payment instructions wouldn't work after she claimed this was what I needed to do. She claimed I needed to make a minimum payment, even though my loan was in forbearance. I explained there is no minimum payment, as my loan is still in forbearance, and my goal was to cover interest while in forbearance and make additional principal payments after covering the interest. 

I then asked why the previous supervisor I spoke with didn't mention this and assured me that everything was in order. I requested to speak with another supervisor. However, she put me on hold, I waited for over an hour and never returned. I later found out that their offices closed while I was waiting on hold, and no one addressed my questions. 

To make matters even more confusing, I later noticed that the representative did apply for one payment correctly that was made on XX/XX/XXXX, even though she initially claimed she couldn't because I didn't make the minimum payment. However, she processed this without returning to the call to address my questions or concerns. What's even more perplexing is that she only processed it for one payment, not the two payments mentioned previously. This has left me even more bewildered and frustrated, as I still haven't received answers to my questions or had my issues resolved.

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