Consumer complaint received 2017-05-11
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: MOHELA (NC)

I was having trouble paying my  Income  Based Repayment monthly payments and was behind on payments, and I spoke with a  Mohela r epresentative on   XXXX   XXXX    2017 for 47   mi nutes to discuss my options. I was told that I had until the end o f  XX/XX/XXXX  to m ake at least  one  payment in order to not go into the default process. I indicated that I wanted to get current and comply with the requirements for my yearly  IBR renewal,  which was also due by the end of   XX/XX/XXXX .      Per this phone call, I made a payment on  XXXX   XXXX ,    2017.   Following this, I also sent in my paperwork ( I am  XXXX  ), which included the form titled " Income Based Repayment Plan, Alternative Documentation of Income, '' a document indicating how my Adjusted Gross Income was calculated, and a copy of my husband 's  XXXX .     I was notified by email on  XXXX   XXXX ,    2017, t hat my paperwork was not accepted because the form I used to apply had changed, and I needed to use a more current form. I was also told that I needed to provide a copy of my husband 's original  XXXX , not just a copy ( or, alternatively, that I could provid e 2 w eeks of paystubs ). I was offered an administrative forbearance which I denied because I did not want the outstanding interest ( over {$50000.00} ) to accrue, which  Mohela confirmed would be the case.      Several weeks later, I had  two m ore conversations with  Mohela    on  XXXX   XXXX ,  2017 ( 2  7 minutes )  and  XXXX   XXXX ,    2017 ( 1  7  minutes ) regarding my past due account. It was during the phone call on   XX/XX/XXXX , whe n I spoke to  XXXX , that I came to understand that if I sent in the revised paperwork for t he IBR renewal that the outstanding balance of {$1800.00} would be immediately due ( in order to renew the IBR program, it wa s required that my account be brought current ), and that, otherwise ( if the outstanding amount were not paid ), I would automatically be given an administrative forbearance which would immediately capitalize my interest ( which, at this point, would amount to approximately {$57000.00} being added to my principal ).     During this   XX/XX/XXXX  cal l,  XXXX  told me that if I could not make this outstanding payment, I should " hold off '' on sending in the revi sed IBR rene wal paperwork until I could pay the outstanding balance. I was also given confirmation that my most recent payment o f  XX/XX/XXXX   had been received. Thus, based on this conversation, I planned to work immediately toward gathering enough funds to pay off the {$1800.00} outstanding balance, while also making my agreed upon monthly payments.     I next spok e with Mohela    on  XXXX   XXXX ,  2017, at  which time I was prepared to pay the outstanding balance owed and submit the revised paperwork in order to move forward on  my IBR renewal (   again, based on the information I received from  XXXX  during th e  XX/XX/XXXX  call, with the understanding that I should do both at the same time ). It was during this  XX/XX/XXXX   call that I was informed that my outstanding interest had already been capitalized AND that there was nothing I could do about it. I spoke to  XXXX , a supervisor, during this call, and he confirmed that if I had sent the paperwork  by  XX/XX/XXXX , the capitalization would not have occurred, but it was too late no w to do it.     This situation is appalling and wrong for several reasons : first, I was never told that I only had  until  XX/XX/XXXX  to file the p aperwork and that, thereafter, {$57000.00} in capitalized interest, would be added to the principal ; and secondly, the information I was given was completely the opposite of what the previous agent,  XXXX , had told me  on  XX/XX/XXXX . By  the time I received the apparently correct information by  XXXX  on   XX/XX/XXXX , I  was told it was too late for me to reverse the situation and the horrendous burden imposed by the capitalization of interest.