Consumer complaint received 2024-10-21
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA (MD)

This complaint regards two " companies. '' The first is the XXXX XXXX XXXXXXXX XXXX XXXX ( MOHELA ). The second is the U.S. Department of Education 's Office of Federal Student Aid ( FSA ). 


In XX/XX/XXXX, my employer made two lump sum payments on my behalf to MOHELA, a loan servicer of the Department of Education 's office of Federal Student Aid ( FSA ). The two payments totaled {$8400.00}. 


In XX/XX/XXXX, student loan repayments resumed, after a global period of non-payment as a result of the XXXX pandemic. 


At the time my monthly payment was recalculated by MOHELA, for the amount of {$1100.00}. Per my instructions, and MOHELA 's default payment allocation, the lump sum payment was to be applied to XXXX 's monthly payment, and to subsequent months until exhausted. 


Accordingly the monthly payment allocation should be as follows : XXXX XXXX : {$1100.00} XXXX XXXX : {$1100.00} XXXX XXXX : {$1100.00} XXXX XXXX : {$1100.00} XXXX XXXX : {$1100.00} XXXX. XXXX : {$1100.00} XXXX. XXXX : {$1100.00} XX/XX/XXXX : {$190.00} In XX/XX/XXXX, I completed my XXXX month under a qualified employer for Public Service Loan Forgiveness ( PSLF ). I immediately applied. In XX/XX/XXXX, I was notified that six of ten loan sequences had been forgiven. The remaining four were still pending. 


In XX/XX/XXXX, MOHELA and FSA unilaterally announced a pause on PSLF processing, leaving my four remaining loan sequence numbers in limbo. At the same time, MOHELA unilaterally transitioned to a " new platform. '' When PSLF processing resumed in XXXX, I was eventually informed that the remaining four loan sequences were forgiven.

Both MOHELA and FSA both consistently remind borrowers that payments made in excess of the 120 payments required for PSLF will be refunded within 90 days. To date, I have yet to be refunded for the payments applied to XXXX and XXXX of XXXX, despite well over 90 days having passed. 


I have phoned and written MOHELA dozens of times, receiving slightly different messaging each time, but ultimately no resolution. MOHELA generally claims that FSA is responsible for refunds. FSA, whom I have also phoned and written dozens of times, denies having any information about my loans, payment history, or forgiveness, saying only to contact MOHELA. 


Adding to the confusion is that because of MOHELA 's unilateral " transition to a different platform '' the loan sequences that were discharged prior to XX/XX/XXXX are no longer accessible my me OR MOHELA customer service representatives. Further adding to the frustration are the incredible wait times required to speak with anyone from MOHELA, and the complete disregard of consumers by FSA. 


The overpayments consist of the payment for XX/XX/XXXX ( {$1100.00} ) and XX/XX/XXXX ( {$190.00} ), totalling {$1300.00}. One MOHELA representative said that it is policy not to refund payments physically received prior to discharge. This policy is not the policy of FSA, is not communicated to consumers anywhere, and was an attempt to get a customer " off the phone. '' FSA confirmed via phone that the date of physical payment does not determine eligibility for refund. MOHELA consistently refuses to refund money that rightfully belongs to me, as it was not owed for the months to which it was applied. To the extent that MOHELA applied the payment differently ( e.g. toward outstanding principal ) it did so in contradiction of its own stated default application, and my written instruction.