Consumer complaint received 2023-08-22
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: MOHELA (ID)

Summary of complaint : I received incomplete and misleading information about the new SAVE repayment plan. This misinformation resulted in early recertification of my income, which will result in repayments 12 months sooner than would have been required on my previous plan ( totaling more than {$3000.00} in additional payments ). I requested a reversion of my repayment plan back to its previous state prior to payments resuming, which MOHELA has denied. I believe I am entitled to the benefit of delayed income recertification that has been extended to all other borrowers previously enrolled in the same plan as I am now.

Details : I initially signed up for Income Based Repayments with XXXX in XXXX just after graduating school. At this time, my income was {$0.00}, and therefore my monthly payments ( regardless of the COVID payment pause ) were {$0.00}. I continued on this plan until XXXX of XXXX, at which point I read about the benefits of the SAVE plan ( see screen shots below ). FSA and MOHELA advertised this plan as a way to save money on monthly repayments, so I submitted an application to change to the REPAYE plan, which would become the SAVE plan in XX/XX/XXXX. During this application process, I was asked for my adjusted gross income from my most recent tax return ( NOTE the application threatens fines or legal action if this is not provided - it does NOT mention that this will be used for early income recertification for borrowers already on Income Driven Repayment plans ). I entered this number as {$61000.00}. I was NOT informed that by entering this number, my income would be re-certified EARLIER than the FSA deadline ( please see screen shot below from FSA 's website detailing that recertification dates have been delayed by

one year ). What I had unknowingly done by applying for the SAVE repayment plan ( that was ironically promoted to reduce borrowers ' monthly repayments ) was prematurely recertify my income a year before it was officially due. This was not discussed anywhe
re in the application, nor on either MOHELA or FSA 's websites. My monthly payments went from being {$0.00} through at least XXXX of XXXX, to {$230.00} starting XX/XX/XXXX. As soon as I realized what had happened, I contacted MOHELA to either cancel my entire SAVE application, or at the very least cancel my income recertification. Screen shots of their response has been included below, but effectively they declined to do either. I replied stating that their SAVE application was misleading, and that I had spoken to both a financial advisor and legal counsel who both advised me that I should be eligible for a reversion back to my previous plan and income. They did not reply to this message for 3 weeks.

While awaiting their second reply, I called MOHELA to discuss that I had not been provided sufficient information to understand the effect changing from IBR to SAVE would have on my income recertification. I once again requested cancellation of my application and reversion back to my previous income certification of {$0.00}. I spoke to XXXX ( ID # XXXX ) who was unable to help me directly with this request, but attempted to get me in touch with a supervisor. After 3 attempts to get his supervisor on the line, he told me he had spoken to her ( her name was XXXX, he was unable to provide a last name ). She told him she would submit a request to revert my plan AND income back to its previous state. He confirmed this to me twice before the phone call ended. 

On XX/XX/XXXX, I finally received an online reply to my message response discussed above. MOHELA once again refused to cancel or revert my income recertification stating " We are unable to revert your payment plan back to a prior plan once your application is approved ''. 

I believe I am entitled to either a reversion back to my previous plan at my previous income certification of {$0.00} OR simply just a cancellation of my income recertification until it becomes due again in XX/XX/XXXX at the EARLIEST ( see FSA screen shot below ) for the following reasons : 1. Nowhere on the REPAYE/SAVE application is early income recertification discussed. Please see attached screen shot. You are required to provide your most recent AGI, but you are not told that supplying this will result in early income recertification.

2. Borrowers already enrolled in REPAYE are not being made to recertify early, despite their plans being automatically being transitioned to SAVE. There should be an option for borrowers to change plans WITHOUT forced income recertification before it is officially due. I believe this to be an intentionally deceitful practice with the aim of tricking borrowers into recertifying prematurely. 

3. I have spoken to colleagues and classmates who have successfully had their income recertifications cancelled by MOHELA after they realized they recertified prematurely. I believe I should be afforded the same.

4. I was already enrolled in an income driven repayment plan prior to applying for REPAYE/SAVE. As such, it makes entirely no sense that I would voluntarily apply for {$230.00} monthly payments if I had already been aware that my payments would have continued at {$0.00} through XX/XX/XXXX. The only way in which this could happen is if the SAVE plan was misleading or lacking information to make an informed decision.