Consumer complaint received 2023-07-29
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: MOHELA (OH)

I have a student loan that has a balance. I have never been late and student loans were paused. I noticed that my XXXX XXXX  dropped quite a few points after the student loan was put back onto my credit report. It has been said more than one time on the news that it was not supposed to affect your XXXX XXXX but once it was put back onto mine my score dropped from a 719 to a 710. I have watched it to see if once the government decided whether or not to forgive some loans if put back onto my credit report how it would affect it. My score dropped. Everything else is the same so there is no reason it should have dropped. I've even already made a payment early because I just want to get mine paid off. The old servicer was XXXX. The new servicer is Mohela. There was an article printed by XXXX that addressed this same problem. Here it is : XXXX XXXX  Lawsuit : Student Loans Are Paused, So Why Did Your XXXX XXXX Drop? 
XXXX XXXX XXXX XXXX XXXX, XXXX ( XXXX  ). Bestselling Author, The XXXX XXXX. 
XX/XX/XXXX, XXXX XXXX A new lawsuit claims that student loan servicers and credit bureaus allegedly ruined your credit score. 

Heres what you need to know. 

Student Loans Today, individuals representing a class of millions of student loan borrowers filed a federal lawsuit in XXXX California against five of the nation 's largest financial companies for allegedly illegally ruining borrowers ' credit and mishandling student loan debt relief under the CARES Act in the wake of the XXXX pandemic. The lawsuit named the student loan servicer XXXX XXXX ( a subsidiary of XXXX ) as well as consumer reporting agencies XXXX, XXXX, XXXX and XXXX Score. XXXX XXXX is among the largest servicers of federal student loans and services student loans for approximately 8 million customers. 

During a national pandemic, these companies illegally damaged the credit of millions of people, '' said XXXX XXXX, the Executive Director of the XXXX XXXX XXXX XXXX, which is supporting plaintiffs in the lawsuit. For too long, the student loan system has crushed borrowers when they slip up, while industry has received a free pass when it harms millions. Borrowers deserve justice. 

The Allegations : XXXX XXXX Damaged The plaintiffs make several allegations, including that their XXXX XXXX  were improperly damaged when their federal student loans were paused due to the CARES Act - the {$2.00} trillion financial stimulus package. Under the CARES Act, all federal student loan payments are paused as of XX/XX/2020 until XX/XX/2020. As a result, borrowers are not required to make federal student loan payments. Further, borrowers who do not make payments should have no impact to their XXXX XXXX. Despite this law, plaintiffs allege that their XXXX XXXX was damaged anyway. This mistake- which may have been due to a coding error may have impacted as many as 5 million student loan borrowers. 

For example, plaintiff XXXX XXXX, program director at the nonprofit XXXX XXXX XXXX, learned that his XXXX XXXX declined after his federal student loans were paused. According to his lawsuit, XXXX XXXX inaccurately reported that his federal student loans had been deferred ( rather than lawfully paused under the CARES Act ). As a result, his XXXX XXXX  plummeted and he says he was unable to buy a home, which resulted in a measurable, immediate financial loss. Following complaints from borrowers, XXXX XXXX has publicly admitted the mistake in a tweet on XXXX and says it will correct the error retroactively. 

MORE FROMFORBES ADVISOR Student Loans And Your XXXX XXXX : Qualifications And Impact ByLindsay XXXX XXXX XXXX Interest Rates : Costs, Options And Ways To Save XXXX XXXX XXXX XXXX student loans XXXX XXXX on XXXX Investing Digest : Know what's moving the financial markets and what smart money is buying with XXXX XXXX XXXX. 

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Similarly, XXXX noted on its website that the Department of Education will report suspended payments to the national credit bureaus as though they were on-time payments. 

What should you do if your credit score has been damaged after you paused student loans?

If your credit score has been impacted, or you want to know if your credit score has been impacted, you should check your credit report. Go to XXXX for a free copy of your credit report from all three major credit bureaus. You can also contact the XXXX XXXX XXXX XXXX if your credit score changed on or after XX/XX/2020 and you believe it was reported from XXXX XXXX. Finally, you can also contact your lender to inform them of the error so they can correct it for you. Remember, your federal student loans are paused and your credit should not be negatively impacted through XX/XX/XXXX. 

Student Loan RepaymenXXXX Options Whats the best way to pay off student loans faster? Start with these four options, all of which have no fees : Student loan refinancing Student loan consolidation Income-driven repayment plans Student loan forgiveness Resources : Student Loans Dont expect student loan forgiveness or a {$2000.00} a month stimulus check Student loan forgiveness reduced in new stimulus bill Heres when Social Security recipients get their stimulus check XXXX settles lawsuit what it means for your student loans Should you pay off student loans during COVID-19? 

How COVID-19 affects student loan forgiveness Heres everything thats happened to your student loans in XXXX weeks XXXX most popular questions about student loans and Coronavirus How long do your unemployment benefits last? 

How to pay your student loans during Coronavirus Student loan forgiveness benefits these members of XXXX How to get financial relief for your student loans during Coronavirus XXXX ways to lower your student loan payments during Coronavirus Student loan refinancing rates are incredibly cheap Follow me on XXXX or XXXX. Check out my website or some of my other work here. 
XXXX XXXX XXXX XXXX XXXX XXXX is the Founder & CEO of Mentor ( XXXX  ), a leading online financial marketplace where you can shop for loans and credit cards. XXXX is... Read More Editorial Standards Print Reprints & Permissions