Consumer complaint received 2024-06-06
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA (NC)

On XX/XX/XXXX I applied through StudentAid.gov to consolidate all of my existing federal loans and place them on the XXXX Plan. As part of the application I also elected to process immediately and end the grace period on any loans for which that applied ( studentaid.gov made me confirm this before submitting the application, and my copy of the application says the same ).

On 3/29/24 the consolidation loans arrived at MOHELA and appeared on my account page. However, MOHELA ( by their own admission, and which I have on record ) incorrectly processed my XXXX application, placing only one loan on XXXX and the other on Standard/Level XXXX I had to call MOHELA several times between XX/XX/XXXX and XX/XX/XXXX to try and correct this issue, before MOHELA properly placed both of my loans on the XXXX plan as was supposed to happen originally. During this time, MOHELA representatives placed me on administrative forbearance ( I did not request this ), and changed my loan due dates repeatedly ( again I did not request this ), while the error was corrected. 

During this time, interest continued to accrue on my consolidated loans, which *should* have been covered by the XXXX subsidy ( once it was applied ), as my loans were supposed to be on the XXXX plan from XX/XX/XXXX onward. Both loans entered repayment on XX/XX/XXXX ( as indicated by my first billing statement received on XX/XX/XXXX ), and were supposed to be on XXXX at that time. 

However, I requested a financial activity summary in early XX/XX/XXXX, and noticed that no XXXX subsidy had been applied to either loan. There was an entry for " IDR Subsidy '' on the document, but in the amount of {$0.00}. I further noticed that on XX/XX/XXXX ( after checking my MOHELA account ), that a subsidy had been applied, but only for the XXXX billing cycle. There was still around {$900.00} of outstanding accrued interest on my account that should have been covered by the subsidy, but was not. 

I reached out to MOHELA about this on XX/XX/XXXX and again on XX/XX/XXXX to find out why the subsidy was not applied, only to be told that the interest prior to XXXX was my responsibility. First I was told this was due to some of my loans being in a grace period ( I graduated in XX/XX/XXXX ). However, this was incorrect as I voluntarily ended any grace period as part of my consolidation application, as referenced above. All consolidated loans entered repayment on XX/XX/XXXX and there was no grace period anywhere. I was then told that the interest was due to a consolidation process taking XXXX days, which again is incorrect given that my consolidated loans did not enter repayment until XX/XX/XXXX and per the initial billing statement received on XX/XX/XXXX, and the current outstanding interest began accruing from that date. Additionally, both loans were placed on repayment plans from that date ( both were *supposed* to be on the XXXX plan, and thus any interest should be covered by the subsidy ). My online loan disbursement letter also states that the consolidation loans were paid and disbursed to MOHELA on XX/XX/XXXX, completing the consolidation process. 

At this point, the XXXX subsidy should be applied retroactively to all outstanding interest accrued since XX/XX/XXXX ( or MOHELA writes it off ), as MOHELA is at fault in this case and their initial processing errors led to this outcome. It should also be noted that I have every conversation had with MOHELA representatives on this issue fully on record.