Consumer complaint received 2024-03-09
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA (MD)

Mohela XXXX... 

I want to share my recent experience in case anyone else goes through the same. 

Last XXXX I received about {$8700.00} from my job as the third year of a signing commitment. This was supposed to be used as my monthly payments from XX/XX/XXXX to XX/XX/XXXX. On XX/XX/XXXX, before I had a chance to know the funds were released, or applied, or I could appeal, the entire sum was applied to my outstanding interest. I received my XXXX statement which said I was due to pay my monthly $ XXXX. 

I called to find out what happened to the {$8700.00}. After hours, I was told that money could never be used to pay ahead. At the time, this was in direct conflict with written statements on Studentloan.gov and the Mohela website. After more hours, I was passed to a customer service agent who confirmed I was right, and the money would be distributed as it should. 

Weeks later, nothing changed. More calls, more demands, and I even reached out to Student loan.Gov, the department of education, and more to demand their actual written understanding of the applicable guidance. Each one stated I had to refer back to my loan servicer. I asked what my recourse was when my loan servicer was literally make their own rules, and I received no aid. 

I filed a complaint with the XXXX  and my state attorney general. By this point, I had to pay the XXXX payment to avoid default. Ever since the first call to Mohela, I demanded a refund of my XXXX era payments, which I under current rules in XXXX, I was allowed to do until XXXX of XXXX. I also filed an internal complaint with Mohela. 

My account was placed in an " unrelated administrative forbearance '' due to improper billing/invoice for XXXX to XXXX and my XXXX payment was nullified. Mohela responded to the State Attorney General to say that all refund requests must be made prior to XX/XX/XXXX, and Mohela sent an appeal to a different government agency asking for special permission to return the money. This XX/XX/XXXX date was not in place, to the best of all my understanding, in XXXX. Which is why I requested a refund then Their online rules have also changed in the Department of Ed and Mohela. Both now state that lump sum payments will only count ahead to the next recertification date. This was not in place prior to XX/XX/XXXX. 

XXXX came, and my $ XXXX from XXXX was moved to cover XXXX. The {$8700.00} was now missing from my Mohela account. I also received a letter requiring me to recertify my loans in an income driven repayment plan by XX/XX/XXXX. My recertification date is not due until XX/XX/XXXX. It is this point I am complaining for now. 

I called. Mohela again. More hours of wait time. I was told the date they sent was wrong, and I could even see on their own website XXXX dates listed, XXXX XXXX, XXXX XXXX, for my own due date. The phone rep said to ignore the XXXX date and recertify as normal. 

More letters. Threatening that if I didn't recertify in XXXX I would have a {$2900.00} payment due. I decided to recertify early, figuring it was better to give Mohela more time to get my paperwork right. 

Wrong. Despite submitting my IDR on XX/XX/XXXX, more than a month before it's due date, my payment amount required by the end of XXXX did not change. Another few calls, and hours waiting with Mohela. 

The verdict : I didn't recertify soon enough. Because of this, I did not meet the IDR deadline and though my paperwork was processed and accepted on XX/XX/XXXX, my IDR won't kick in until XXXX. ( I have never not been on an IDR. There is ZERO reason for me to be dropped for this time frame ). I have never been dropped from an IDR since my starting loan payments in XXXX. 

I was therefore obligated to pay the nearly {$3000.00} before the IDR began, or I could apply for forbearance and hope it is accepted. Again... I've done nothing wrong. I've played by the XXXX rules. Also, though I've been verbally told this type of forbearance period counts to my PSLF, the terms and conditions state the exact opposite. 

I request an appeal. With, if Mohela accepts to hear me, it will be another 10 business days before I know. In the mean time I have to apply for forbearance because that date will fall within 7 days of the bill being due, and the account won't get fixed in that time frame. If it's even attempted to be fixed. I am not allowed to continue my current payment plan. 

I've now received information about an administrative forbearance, which is not the kind discussed on the phone. And that {$8700.00}? Still in limbo, with no answers, or updates, since XXXX. Mohela states the appeal is with a different government agency, and they have no aid or information to provide. 

I'm just trying to do everything right. But now, I don't know what to do at all.