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

Complaint : Mohela is reporting debt I no longer owe to credit agencies, has taken payment for debt that no longer exists without providing a timeline for repayment, has failed to process my PSLF discharge in the timeline provided by the federal government, and has acknowledged serious problems in their system that is preventing discharge but has not remedied the problem in the three months they have known my PSLF application was approved and that my loans were forgiven. 
Details : I have been eligible for PSLF loan forgiveness since XX/XX/XXXX. I submitted my documents in XXXX and received a letter from Federal Student Aid that my loans had been forgiven on XX/XX/XXXXXXXX XXXX XXXXXXXX  In that letter it states that " Your loan servicer will send you a communication about PSLF/TEPSLF forgiveness within 30 business days. 
You don't need to take any action as you await this update from your loan servicer. '' I heard nothing from Mohela within 30 business days ; however they did withdraw a payment for my loan during this period. In late XXXX, after the 30 business days stated in the letter, I called the company to find out why I had been billed and why my loan had not been discharged. At that time I was told three things 1. Mohela ignores the federal mandate to process within 30 days and instead takes 30-90 business days to process the discharge 2. Although the federal government tells the borrower they do not need to do anything, Mohela does not place the account in forbearance while they process the discharge unless requested by the borrower and does not communicate the need to request forbearance. In the absence of forbearance, MOHELA will continue to take payment they are not owed. 3. There had been a " glitch in the system '' that required my account to be rebuilt, which was why they hadn't discharged my account. 

I called again on XX/XX/XXXX, 60 business days after the federal government forgave my loan, for an update. This time I was told that Mohela had stopped processing PSLF discharge because of a court order and had only restarted processing them recently, thus it would take an unspecified amount of time more to process my discharge. Since the court orders did not apply to PSLF directly and since I am not on a SAVE repayment plan, which was the subject of the order, I pressed for information about said " court order, '' which they of course could not provide. 

After directing me to the Federal StudenXXXX loan page for non-existent information about a court ordered stop on process PSLF forgiveness, I was then transferred to a supervisor. The supervisor again told me that the reason my discharge had not been processed was that there had been " a glitch in the system '' and that my account needed to be rebuilt. She told me that no progress had been made to do so in the nearly 2 months since my last call. No one has been able to offer a timeline for when discharge will be processed, I have still received no communication from MOHELA about PSLF or the delay in the timeline. 
At a minimum, Mohela is behaving unethically but it seems is also probably behaving illegally and in violation of the federal timeline given to process PSLF discharge. Mohela is reporting debt I no longer owe, has taken payment for debt that no longer exists, has failed to process PSLF discharge in the timeline provided by the federal government, and has acknowledged serious problems in their system but has not remedied the problem in at least three months.