Consumer complaint received 2017-03-14
Company: MOHELA
State: CT
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with my lender or servicer
Sub-issue: Need information about my balance/terms

Complaint:
When I was in college and graduate school, the paperwork I signed was for fixed interest loans. My loans have been transferred to various servicers over the years, none of which was a refinance by me, rather my loan sold to a different company without my consent. Each of them, prior to MOHELA, used my monthly payments to reduce the principal debt as well as taking a majority of the payment for interest. 
When XXXX serviced the account, over 24 % of my payments went to reducing principal. From XX/XX/XXXX-XX/XX/XXXX XXXX took over the loan, 19 % of my payments went to reduce the principal. MOHELA became the servicer in XX/XX/XXXX. In XX/XX/XXXX I noticed that the principal was n't being reduced at all. When I contacted MOHELA they told me that I was " paid ahead '' so I continued my overpaying. When I received my XXXX forms, however, almost all of the payments were made as interest, as verified by the XXXX, and only 7.4 % of my payments went to reducing principal even though I overpaid my monthly bill by four times that amount. While MOHELA could lie to me, it obviously could not lie to the IRS and the tax form proved that the oral statements made by MOHELA 's representatives were untrue. 
I then requested my original loan paperwork and a payment history from MOHELA. I received the payment history but never any of the original paperwork. I had various federally guaranteed student loans over the course of my education, but I made sure that all were from large banks and for a fixed interest amount. I can not imagine that any loan contract would allow the terms to be changed to interest only from fixed. 
I made a complaint with the CT Attorney General 's office who advised me to submit a complaint through your offices as they did not have jurisdiction. MOHELA, however, responded to the CT AG 's inquiry and stated that their behavior was within Federal guidelines. 
I would like the CFPB to provide me a copy of the guidelines which allow the change in terms to interest only from fixed or to " pay ahead '' my note rather than reduce the principal, and to provide a copy of at least one of the contracts that I signed which would allow a change in terms. 
Due to my complaint, I received a modest payment from the Dept of Education as an " overpayment. '' This small amount did not include the amount of principal that would have been reduced if payment applied and principal reduced. Interest was still being charged on the principal debt when it should have been reduced. When MOHELA took over the loan, the amount that it admits in it 's submission was {$220000.00}. When I refinanced my loan with a different servicer 8 months later, my principal was almost {$600.00} more than when they took the note. This is while I was overpaying my monthly bill by 20-25 %. 
I have all of the documentation proving the points above. An internet search shows hundreds of others in my situation that MOHELA has unilaterally changed the terms. A quick actuarial calculation shows that my principal should be reduced by approximately {$28000.00}. In the nine months that my loan has been moved from MOHELA to a legitimate bank, I 've paid the note in the exact same manner as before -- I 'm billed $ XXXX/month and I pay {$2000.00}. In these nine months my principal has dropped almost {$10000.00} as opposed to the eight months with MOHELA where it increased.

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