Consumer complaint received 2024-05-02
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 believe that MOHELA is mishandling a payment I made to my student loan. I have had loans serviced by MOHELA since the fall semester of XXXX. I was informed this past fall semester that my account would be transitioning. The transition was still to MOHELA, but through a different website. Prior to the transition, I made numerous payments to my loans, paying one off entirely without any issue. On XX/XX/XXXX, a loan for my final semester of law school ( {$10000.00} ) was disbursed into my account through the new servicing platform. Alongside my studies, I have a part-time job that I hold so I can attempt to pay back my loans faster. Once I received a paycheck for the month of XXXX, I decided to apply that money to my new loan ( the one disbursed on XX/XX/XXXX ). On XX/XX/XXXX, I made a payment of {$810.00} to that loan on the new MOHELA website. I received a confirmation email for the payment, as I had for previous payments ( # XXXX ). The payment was listed on my account history as 'pending '. On XX/XX/XXXX, the amount was removed from my bank account. At this point, I looked at my MOHELA account to find that the money was not posted to the loan ( nor was the overall balance decreased ), and the pending payment in the account history had completely disappeared. The MOHELA website states that payments typically take around 3 business days, as was my experience in the past, so I waited a few days to see if it was just delayed. On XX/XX/XXXX, I called MOHELA to raise the issue. The customer service representative told me that the posting of the payment was just delayed, and to wait 5 days before calling back again. On XX/XX/XXXX, I called again, after the payment was not posted, and was told the transition was causing delays, so to wait and call back in another 5 days if it was not posted. On XX/XX/XXXX, I called again since the payment was not posted, and again was told that the transition was causing delays and to call back in 10 days if nothing had changed. On XX/XX/XXXX, I called again since the payment had not posted. The customer representative investigated the issue and concluded that since I made a payment within 120 days to the disbursement date, the payment should be applied to the principal amount of the loan ( rather than showing up in the payment history ). She then told me that payments paid within 120 days of the disbursement date specifically are experiencing delay due to the transition, and to call back in 10 days if nothing has changed. I called again on XX/XX/XXXX, where the transition was again cited as the source of the delay, and instead was told that it would take up to XXXX days to post the payment ( would be XXXX ). On XX/XX/XXXX, to test if the whole account was having issues or if it was this loan specifically, I sent {$2.00} to my first loan ( from XXXX ) and {$2.00} to my other loan ( from XXXX ). The {$2.00} for my first loan was posted successfully, but the second was not ( it was pending and then disappeared just like the previous case ). As such, I concluded that the loan disbursed on XX/XX/XXXX is specifically having issues. On XX/XX/XXXX, I called again to check in about what was happening. At this time, the customer service representative told me that the payment would take 60-90 days ( now would be XXXX ) to post. I called on XX/XX/XXXX and XX/XX/XXXX to check in, again being told that there was a delay up to 90 days. On XX/XX/XXXX, I called to check in and was told by the customer service representative that despite making numerous calls by that point, not a single one of the customer service representatives that I had spoken to had filed an investigation, report, or flag into this issue in my account since the very first call on XX/XX/XXXX. She apologized, requested that I submit my bank statement into the portal on the MOHELA website ( which she confirmed on the phone to have received successfully ) and filed an investigation. She told me to call back in 7 days if the issue was not fixed. On XX/XX/XXXX, I called to see what the state of the investigation was. The customer service representative told me that it was still pending, and cited the delay due to the transition once again. She indicated that she submitted a request for my account to be reviewed. On XX/XX/XXXX, I called to see again about the investigation. The customer service representative told me that there are numerous investigations open on my account. She said an investigation is typically concluded within 10 days. She confirmed that in every single one of the investigations open on my account, it has been far past the typical 10 days. When asked specifically when I might expect resolution of any of those investigations, she was unable to offer me any date. I then asked what would happen if they could not find the money. She told me that I would then need to dispute the payment with my bank. After this call, I called my bank to see if they could help or offer any insight about the process to dispute the payment. They told me that since the payment was removed from my account in XXXX, it is no longer possible to dispute it because it is past the time allowed to dispute a payment. The bank representative told me she was " shocked '' that MOHELA would put me in this position. There are numerous issues with how this process has occurred. Firstly, I am now in a position where {$810.00} of my money ( my entire paycheck as a working, first-generation, low-income student ) is lost, with absolutely no means for me to find it. I can not turn to my bank due to MOHELA 's insistence that I wait and wait due to the transitions delay, and MOHELA has demonstrated absolutely XXXX effort to find the money -- despite me sending the bank statement which clearly shows that the payment was made and received. Secondly, I no longer trust that when I post money to my MOHELA account it will actually be applied to my loan ( as demonstrated by the {$810.00} payment, as well as the {$2.00} payment ). As a result, despite having set aside money intending to pay to my loan, I am not able to be responsible about my loan borrowing and make payments to lower the amount. Thirdly, during this entire delay period my loan has been accruing significant interest. My loan is over 7 % interest, so 3 months of interest at this point makes the initial amount paid nearly worthless. MOHELA can not continue to abuse its customers, refuse to make efforts to resolve issues on its own platform, and cite a transition that occurred 5 months ago to validate this unjust impact on customers.