Consumer complaint received 2023-12-01
Company: MOHELA
State: MD
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:
On XX/XX/XXXX, I checked my bank account and saw that it had a negative balance. After looking into the charges in my account, I saw that MOHELA, my student loan servicer, had withdrawn the entire balance of my student loans. XX/XX/XXXX was my payment date and I was enrolled in the auto-pay program. I enrolled before the payment pause ended, and my first auto-pay was XX/XX/XXXX. The payment amount should be {$260.00} and was taken out correctly on XX/XX/XXXX. On XX/XX/XXXX, the autopayment amount was somehow changed. Instead of withdrawing the normal {$260.00} payment, they withdrew {$14000.00}. This was the remaining amount owed on my student loan. I checked my messages in my account a saw they had sent a confirmation for that amount on XX/XX/XXXX ; however, I had not opened it because the XXXX payment had gone through correctly, I assumed the XXXX auto-pay would be correct as well. That, after all, is the purpose of auto-pay ; a simple way to ensure you have on-time payments without having to closely monitor the account. 

I called on the XXXX and they agreed that this was an error on their part and a significant issue. I was told that it would take 7 business days to cancel the payment. I was advised that the issue would be resolved more quickly if I worked with my bank to dispute the payment. So, I called my bank and they agreed to work with me to dispute the payment once it went through, as it was currently pending. When I checked the next day, the payment had not gone through, I believe because the account did not have sufficient funds. On XX/XX/XXXX I called MOHELA again to ask what to do now. At that time, my account was still showing that {$14000.00} payment, and that I no longer owed any money. I asked them, how I was supposed to make an on-time payment when the system showed that error. They said to wait a week for the system to update and list the correct payment amount. When I asked about making sure this payment would count towards XXXX, they recommended that I make a payment of the correct amount. I informed them that I did not feel comfortable doing that with a system that stated I did not owe anything. My fear was that I would make that payment, and they would just count the payment towards principal only when the balance was corrected. I this point I have no faith in their system. 

On XX/XX/XXXX I received an email informing me that my account has a past due payment. When I checked my account is now showed that the payment that is due is the entire balance of my student loan. So, on XX/XX/XXXX, I called again to ask what to do, since I can not pay the payment that the system is saying is due, and since that payment is incorrect as the agreed upon monthly payment is {$260.00}. The person I talked with said that they would likely put me in forbearance while the issue was being resolved, both they would pass me to the XXXX department to complete a help desk ticket. When I asked for some documentation stating that this was not my fault, they stated I would get a confirmation number of the help desk ticket. I was transferred to a XXXX representative named XXXX, who stated she was in training. After admitting the error, I was placed on numerous holds while they attempted to resolve the issue. I was then suddenly patched into a survey, and after completion the line disconnected. Despite providing a callback number and giving them permission to call me back if we get disconnected, I did not receive a call back. 

My concern now is that I am in the XXXX program. I am 7 payments away from being forgiven. I do not want my forgiveness delayed through this process. Additionally, I am not at fault in this process and do not feel I should be punished for their issue.

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