Consumer complaint received 2024-10-28
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA (MI)

I am writing to file a formal complaint regarding the management of my student loans ( Account Number : REDACTED ) by MOHELA ( Higher Education Loan Authority of the State of Missouri ). 

In XXXX, in response to the COVID-19 pandemic, the federal government implemented a temporary pause on student loan payments, accompanied by a 0 % interest rate through the Federal Student Aid ( FSA ) office. 

My husband and I recognized this opportunity to take control of our finances and worked diligently to budget and make substantial payments, systematically eliminating my student loans one by one. 

Despite our efforts, I have encountered significant issues with the recent transition of my account to a new servicing platform, which has left my payments unprocessed and my loan balance inaccurately reported. 

On XX/XX/XXXX, I received an email from MOHELA informing me that my account would be transferred to a new student loan servicing platform, the XXXX platform, effective XX/XX/XXXX. Please see the attached document titled, XX/XX/XXXX MOHELA Student Loan Platform Transition Notification.PDF for details. 

On XX/XX/XXXX, the outstanding balance on my final student loan ( 1-01 Direct Loan Subsidized ) held by MOHELA was {$2500.00}. 

On that day, I made a payment of {$1800.00} through MOHELAs website ( Confirmation # : REDACTED ). Please see the attached document titled, XX/XX/XXXX Payment Confirmation.PDF for verification. 

The following day, XX/XX/XXXX, I submitted what I anticipated would be my final payment of {$750.00} ( Confirmation # : REDACTED ). Please see the attached document titled, XX/XX/XXXX Payment Confirmation.PDF for verification. 

To ensure the accurate application of my payments and account for any potential interest that may have accrued, I included an additional {$10.00} with my last payment. This was calculated as follows : {$2500.00} ( Loan Principal ) - {$1800.00} ( Payment ) - {$750.00} ( Payment ) = - {$10.00} ( Extra Amount Paid ). 

On XX/XX/XXXX, I utilized the Secure Message feature of the old MOHELA website to request that my payments be promptly applied to my final loan, ensuring my balance would be fully paid off before the transition. 

On XX/XX/XXXX, when I attempted to log in, I received a notification from the old website indicating that my account was transitioning, and I could no longer access it. 

As a result, I am unable to locate and attach the message I sent on XX/XX/XXXX, for your review, since I can no longer access the old website due to MOHELA 's transition to the new platform. 

On XX/XX/XXXX, I successfully created an account and logged into MOHELAs new website. Upon logging in, I was dismayed to find that my payments had not been applied to my final loan balance, and my loan was continuing to accrue interest. I took a screenshot on this date, which shows my loan balance had risen to {$2500.00}. Please see attached document, XX/XX/XXXX MOHELA New Website Loan Amount Screenshot.PDF. 

On XX/XX/XXXX, I received an email confirming that my account had been fully transitioned. However, its important to note that no interest should have accumulated during this period, as the payments I made on XX/XX/XXXXXXXX XXXX XXXX XXXX XXXX XXXX would have completely paid off my student loans. Please see attached document, XX/XX/XXXX MOHELA Account Transition Successful Notification.PDF. 

As of XX/XX/XXXX, my loan balance has increased to {$2600.00}. Please see attached document, XX/XX/XXXX MOHELA Account Balance.PDF. 
On XX/XX/XXXX, I called the customer service line and spoke with a Student Loan Counselor XXXX XXXX XXXX XXXX She explained that my payments had been lost during the transition. I provided her with the payment confirmation numbers I received via email for my payments made on XX/XX/XXXX and XX/XX/XXXX. She confirmed that she located the payments and would redirect them to my account. She mentioned that the process could take sixty to ninety days before I would see the payments applied, but assured me that once applied, both the principal balance and interest would be adjusted to reflect the original payment dates. 

Between XX/XX/XXXX and XX/XX/XXXX, I received responses to secure messages I had sent to MOHELA concerning the status of my payments and their application following the system transition. The response I received on XX/XX/XXXX referred to my message sent on XX/XX/XXXX through MOHELAs old system, in which I requested that my payments be applied before the transition. The responses on XX/XX/XXXX, XX/XX/XXXX, and XX/XX/XXXX pertained to separate inquiries I made requesting updates on the application of my payments within the sixty-to-ninety-day timeframe I had been told it would take XX/XX/XXXX. 

Unfortunately, all of the responses were minimal, vague, and unhelpful. For further details, please see the attached document, MOHELA Secure Messages. 

Ninety days after what should have been my final payment on my student loans on XX/XX/XXXX, would be XX/XX/XXXX. As of today, XX/XX/XXXX, it has now been one hundred and forty days. 

Ninety days following my notification on XX/XX/XXXX, that my account had transitioned to MOHELAs new student loan servicing platform would be XX/XX/XXXX. Today, XX/XX/XXXX, marks one hundred and twenty-three days since that notification.

Furthermore, ninety days after my conversation with the Student Loan Counselor on XX/XX/XXXX, would be XX/XX/XXXX, which means it has been one hundred and eighteen days since then. 

Regardless of when MOHELA may argue the start of the sixty-to-ninety-day timeline, they are significantly past the timeframe they provided for the correct application of my payments. 

On XX/XX/XXXX, I contacted MOHELA again by phone and spoke with a Student Loan Counselor who was unable to locate my payments and transferred me to a supervisor. Upon connecting with the supervisor, she confirmed located the payments and would send a message to the appropriate department to expedite the resolution. She assured me that my XXXX payments would be applied to my loan no later than XX/XX/XXXX. 

However, on XX/XX/XXXX, when I logged into my MOHELA account, I found that my loan balance remained unchanged, and the payments from XXXX had not been applied as assured by the supervisor. 

I appreciate your attention to my concerns and urge you take immediate action to correct my loan balance and have my payments applied. In the last four years, my husband and I diligently budgeted our finances, saved money, and made substantial payments, systematically paying off my student loans one by one. We would like nothing more than the payments we made in XXXX, to be applied to my final loan so that we can finally celebrate our success of paying off my student loans and better prepare for our financial future and ambition of buying our first home. 

As a mother of two with limited time, the ongoing mismanagement of my student loans has caused significant stress and frustration. I trust that the Consumer Financial Protection Bureau will take the necessary steps to rectify the situation. I look forward to your timely response and a clear resolution to the issues outlined in this letter. Thank you for your cooperation.