Consumer complaint received 2024-10-14
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: MOHELA (MA)

I am filing this complaint with the CFPB regarding my federal student loan servicer, MOHELA. My complaint addresses two critical points : 1 ) MOHELA is lawfully able to process my application to enroll in the federal governments Saving on a Valuable Education ( SAVE ) Plan, yet they have failed to do so ; and 2 ) MOHELA must move my loans from processing forbearance ( where interest accrues ) to general forbearance ( where no interest accrues ) because it has taken MOHELA more than 60 days to process my SAVE application, yet they have refused to take this action in violation of the relevant federal guidelines.

MOHELAs Continued Ability to Process My SAVE Application : The federal student aid website unambiguously states : [ N ] o new enrollments are being accepted for the Pay As Your Earn ( PAYE ) or Income-Contingent Repayment ( ICR ) Plans, with two exceptions : Borrowers who applied for the PAYE or ICR Plans before XX/XX/2024 .... See https : //studentaid.govXXXX Student Loan Borrower Q & A, I want to enroll in the SAVE Plan or another income-driven repayment ( IDR ) plan or consolidate my loans. What do the recent court rulings mean for me?, Paragraph 4.

I submitted my SAVE Plan application on XX/XX/2024. Since my SAVE Plan application was submitted before the XX/XX/2024 cutoff, my application unequivocally qualifies under the governments first exception quoted above. Therefore, I am still eligible for enrollment in the SAVE Plan, and MOHELA is legally allowed to process my application. 
Failure to Move My Loans to General Forbearance After 60 Days : The more egregious issue, however, is MOHELAs outright violation of the forbearance guidelines laid out by the U.S. Department of Education. According to the same government resource ( two paragraphs later in the Q & A section ) : If servicers need time to process a borrowers IDR application, servicers will move the borrower into a processing forbearance for up to 60 days. Interest accrues during this short-term processing forbearance... If the borrowers application is not processed within 60 days, the borrower will be moved into a general forbearance... Interest will not accrue in this general forbearance. See https : //studentaid.gov/announcements-events/save-court- actions, Student Loan Borrower Q & A, I want to enroll in the SAVE Plan or another income-driven repayment ( IDR ) plan or consolidate my loans. What do the recent court rulings mean for me?, Paragraph 6. 
I submitted my SAVE Plan application on XX/XX/, and as of the date of this XXXXXXXX XXXX XXXXXXXX XXXX have passed. MOHELAs failure to transfer my loans to general forbearance after the allowed-for 60 day processing period has resulted in unlawful interest accrual for 87 excess days. Despite repeated calls, MOHELA representatives continue to insist that they are powerless to make this transfer, contrary to both the federal policy on studentaid.gov and the assurances of Federal Student Aid representatives that it is the servicer, MOHELA, that is responsible for moving my loans to general forbearance.