Consumer complaint received 2023-09-01
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA (NC)

I have been trying to pay off my loans before the repayment pause ends. Starting on XX/XX/2023, I made multiple lump sum payments to my account. During each of the initial payments, a specific amount of money was directed to certain loans of my choosing. After each payment, Mohela directed the lump sum to the loan balances of their choosing. This then created a - {$30000.00} loan balance on loan XXXX. I called Mohela on XX/XX/2023 and spoke to XXXX. I inquired about why this is happening, and she didnt know the answer. It was also during this phone call that Mohela could not tell me the total balance of my loan. XXXX had to create a manual note in my account to make sure that during future phone calls the entire balance was known. XXXX then stated that she instructed overpayment of {$30.00}, XXXX on loan XXXX to loan XXXX and confirmed that I could continue making payments on all other loans but loan XXXX as this will have the {$30000.00} applied to it. She assured me that this was a mistake that would be fixed, and I was the only person that this has happened to. She placed me on a callback list to let me know that the {$30000.00} transfer from loan XXXX to loan XXXX was completed. I never received that call. I then made another lump sum payment directed to specific loans XXXX and XXXX on XX/XX/2023. I received the payoff confirmation letter for loans XXXX and XXXX. Upon logging in over the next few days, it was noticed that there was a negative balance of {$5000.00}, {$900.00}, and {$3000.00} on loans XXXX, XXXX, XXXX, respectively. Also, the redistribution from loan XXXX to loan XXXX never happened. I called Mohela again and spoke with XXXX. XXXX could not explain to me why these loans have a negative balance despite seeing the notes in XXXX system about my previous phones calls. XXXX stated that it just takes time for the money to be transferred between accounts. I pressed him on how I paid off loans XXXX and XXXX and that the only way for these loans to have a negative balance, considering loan XXXX balance not changing, was that the {$30000.00} from loan XXXX was not distributed to loan XXXX, but to other loans. He then admitted that this does look like a mistake, and I need to let it work itself out. He then started lecturing me on how I need to let certain things go and let them just happen and trust that it will work. I was in shock that this was his response. I emphasized to him multiple times that I am trying to pay off my loan before the interest starts. He stated that it will work out and just wait. I could not accept this as an answer since interest starts on XX/XX/2023. I tried exploring how to pay off my loan in whole with him. The payoff amount was {$69000.00} but due to the negative balances on loans XXXX, and XXXX, XXXX and the website stated that my payoff balance was {$79000.00}. This inhibited me from paying off my loan because I needed to wait for the negative balances to be distributed. His next suggestion was bold. He stated that I could either overpay by {$10000.00} and wait for the Treasury Department to refund me {$10000.00} or let the interest accrue and call Mohela on XX/XX/2023 and they will work with me. These were my options and I had to accept it, according to him. I requested him to escalate this to a supervisor and get the loans XXXX, XXXX, and XXXX negative balances redistributed. After working with a supervisor XXXX said that they requested an urgent reallocation and that I would get an email stating when it happened. I questioned him on this because I have been told multiple times how it should go, but it doesnt seem to go as XXXX XXXX state. I asked for proof of how I know an email will be sent. XXXX then said that he promises it will be sent to me and that I need to trust him. I had to argue back against this idea of trusting him and Mohela as I am the XXXX getting punished with accruing interest or overpaying my {$10000.00} because I trusted that Mohela was going to do as they say. XXXX reported that the negative balances will be transferred to loan XXXX and should be fixed in varying time frames : XXXX days, XXXX days, 10 days, or 30 days. Hopefully with his XXXX request, the timeframe will be XXXX days. During this uncertain time, interest will accrue. I asked about keeping my loans in forbearance as I am paying them off, but due to XXXX actions I cant pay them off before XX/XX/2023. XXXX stated that he cant do anything with my loan until they become active again and he will note that if the negative loans are not fixed, I can call Mohela and will be transferred directed to a supervisor. When the phone call ended, I received a message from Mohela to my account stating that the process could take 14 days. As of XX/XX/2023 at XXXX. The loans XXXX, and XXXX are still showing a negative balance and interest start tomorrow. All other loans besides loan XXXX are paid off as I am awaiting the reallocation of the negative balances to loan XXXX before I pay off the difference.