Consumer complaint received 2017-02-16
Company: MOHELA
State: NJ
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with my lender or servicer
Sub-issue: Received bad information about my loan

Complaint:
My original servicer was Mohela. I am on IBR. I called In XXXX to find out if I was able to get my monthly payment of {$900.00} reduced because I changed to a lower-paying XXXX job. I specifically stated that I could continue making payments but I just wanted information. The rep told me that it was no problem and she could send me paperwork to recalculate the payment, and that she would also count that as my annual recertification. She said she would put my account on an administrative hold. I told her that I did n't want her to do anything that would cause my interest to capitalize. I told her many times NOT to do ANYTHING that would cause my interest to capitalize, and XXXX that I could still make my current payment. She said that the administrative hold would n't cause anything to capitalize, she was certain, and this is just what they did normally. I filled out the paperwork and mailed it back. About a month prior, I had also applied for the public service loan forgiveness program. When this paperwork was getting processed with Mohela, my PSLF paperwork finally got processed. I got a letter stating that my loan was being transferred from Mohela to XXXX XXXX because of PSLF. When I went on the Mohela website, it said that they no longer had my loans, and to wait for further information from my new servicer. My automatic debit was no longer being taken out, and my letter also said that the automatic debit information would get transferred to the new servicer. In XXXX, I got a letter from XXXX saying that my automatic debit would be resumed for my XXXX payment. I noticed that the list of loans had my interest CAPITALIZED as my new principal balance was {$300000.00}, where previously it was {$260000.00}. I have since been talking to both Mohela and XXXX XXXX, and both companies continue to tell me that they ca n't do anything. Mohela has continued to change their story. Numerous supervisors have told me that administrative holds are NOT supposed to capitalize, but then when I asked for a letter that I could give to XXXX stating this, they backtracked and refused to give me a letter, trying to say that some form I got in my INBOX ( when the site said they no longer had my loans ) said that the loans were going to capitalize. They said that they are n't responsible for incorrect information that their rep told me, or actions that they took with my loans that I specifically told them NOT to, because of this letter that I did n't even see, and honestly, would not have understood even if I did see it, because I believed the assurances of their representative that my loans would not capitalize. They said that if they still had my loans, they would have allowed me to make my payment of {$900.00} and taken my account off hold, and said the only solution they could offer was for me to ask XXXX if they would do this for me. XXXX refused this option. They continue to say that my problem is with Mohela and that they ca n't do anything about it, because according to regulations, my loans should have capitalized because I asked for my payment to be recalculated. I would NEVER have had my payment recalculated if I knew that it would cause {$40000.00} of interest to be added to my principal balance. I have also gotten multiple stories about which company even capitalized my loans. Mohela put my account on hold on XXXX XXXX and I got a letter on XXXX XXXX stating that my loans were in the process of being transferred to XXXX. My loans capitalized at the end of XXXX, when neither company takes responsibility for even HAVING my loans. I never even had a chance to realize that any of this was going on, or to try to fix it. And now both companies say that they ca n't do anything because it 's the other company 's fault. And I have another {$40000.00} at 7 % interest for 20 years.

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