Consumer complaint received 2024-02-22
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem with your payment plan
Company: MOHELA (CA)

I am officially requesting help in my dispute against Mohela. I have tried repeatedly to get help from Mohela in resolving my problems with their company, and the level of support I have been offered has been tepid at best and does not respond to the severe problems that Mohelas errors are causing me, or will cause me in the future. I should say at the outset that the so-called relief that Mohela has offered me is a temporary forebearance while they sort through the mess they have caused. Which I did avail myself of because I dont really have much choice. But a forebearance is an inadequate solution because I am also enrolled in the PSLF program and it is my understanding that those periods of time in which you are in forebearance do not count towards your number of qualifying payments (except during the COVID forebearance program). The customer service agent told me that I dont need to worry about that because they will count this time period for qualifying payments. But, then when she read me the legal paperwork it says explicitly that forebearance does NOT count as qualifying payments for purposes of loan forgiveness programs. So I dont think she was correct about that, and the ideal solution will be a resolution of my problem under one of the existing IDR payment plans that exist, that I qualify for, and that I have applied for.

So let me lay out my two problems in advance and then I will follow up with documentation and context in the space below.

Problem #1:  I was in the XXXX  program and Mohela took me out of it for some undisclosed reason (I suspect that I know the reason, which I will elaborate on shortly). There are two existing applications for an IDR plan for my direct loans, one of which dates back to XXXX XXXX XXXX - so 9 and a half weeks ago now! - but they just say that it is processing and will not give me a date when I should reasonably expect it to be approved. Meanwhile, they put me in a Level (standard) repayment plan and expect me to cough up nearly $1600 per month while they twiddle their thumbs.
Problem #2: In XXXX  of XXXX  (yes, you read that right, XXXX  of XXXX, so like almost 17 months ago) I applied for the PSLF program to get student loan forgiveness. This was because of a waiver that was in place until XXXX  XXXX. Mohela reviewed my application and said that I met the requirements, but when I ask them how many qualifying payments have been counted, they always tell me that they are waiting on the federal government to tell them how many qualifying payments I have. So I just keep waiting and an answer never comes. You can ask Mohela to call the federal government and request that information, but Mohela wont lift a finger to get me that information. They always say, we dont call them, they call us. I guess Mohela thinks that reasonable waiting times for processing ought to be defined in terms of YEARS rather than days.

The IDR Debacle

All of the problems with my payment plan (the PAYE program) began, I believe, last year. I had been plagued by a XXXX XXXX  during College. XXXX XXXX never told me when they gave me the loan that it was treated differently for repayment purposes than other student loans. They presented it like it was a really great thing. But it turns out that XXXX XXXX do not have the range of repayment options that XXXX XXXX do. So when I entered repayment, I found that this XXXX XXXX was a real thorn in my side. Everyone kept telling me that the only way to get an IDR plan for a XXXX XXXX was to consolidate it with one of the direct loans. But the problem with doing that is that it would reset the forgiveness for the PSLF program. Or so I thought. But last year, after speaking with the Department of Education, I was told that there was a waiver in place through XXXX  XXXX  that would allow the new consolidation loan to take on the same number of qualifying payments as the loan that the XXXX XXXX was being consolidated with. So I decided to risk it with one of my existing unsubsidized loans, leaving the others untouched. Because frankly I am never 100% sure of anything that I am told by someone over the phone. That consolidation was processed in mid XXXX, XXXX, and curiously enough, at that same time ALL of my loans were taken off of the PAYE plan and put on the horrible Level repayment plan. So I believe that this Perkins consolidation was the reason that they took me off the IDR plan.

The thing is, that consolidation should have effected, at most, one of my Direct loans. So I dont understand why the other nine or so loans, which were never rolled into the new consolidation loan, were taken off of the PAYE program. I believe this was Mohelas error. I asked them to just put those 9 (or maybe 10) loans back onto the plan they were on, but I was told that their system wouldnt let them do that. So if this is Mohelas error, shouldnt they correct it by putting those loans back on the plan they were on? When I filled out the consolidation loan, in the new IDR application I said to just put the new loan on the same plan as the other direct loans, so a lay reading of that would make one believe that the current IDR application (the one dated XXXX) is just for the new loan, and that it will be put on the same plan as the other loans once they get around to processing it. But, thats not a desirable request if the procedure is to remove all the other loans from their IDR plan, so that cant be what the federal government had in mind for these consolidations. I figure that the federal governments vision is either a) that the new consolidation loan be placed on the same IDR plan as the UNTOUCHED other direct loans, or else b) that the federal government intends that the new IDR application be an application for all of the direct loans BUT that they intend that that application be processed at the same time as the consolidation. But Mohelas process seems to be to process the consolidation loan and then wait months to process the IDR application THAT ACCOMPANIES THE CONSOLIDATION REQUEST! Either way, the months long wait for an IDR application is unreasonable, unfair, and subjects me to the possible injury of not having this time counted towards my PSLF qualifying payments. And I would request that Mohela be forced to make it right immediately, not on their laid back time schedule. Forebearance is not an equitable resolution for the reasons that I indicated earlier.

Please note, on XXXX XXXX XXXX I also applied for the SAVE program because I hoped that such an application would be expedited. Mohela has confirmed for me, though, in this evenings phone conversation that they have no intention of expediting this application even though they screwed up the other one apparently. And when you ask for an expected date, they say things like, well typically it takes up to fifteen days, but you have to understand that we have millions of applications so things might take longer nowadays.

The Difficulty in contacting Mohela

Then, too, it is almost impossible to contact Mohela about anything. So, for instance, on XXXX I messaged Mohela about my missing PSLF Qualifying payments. Did I get an answer back? Well, a week later (XXXX3) I got a form letter response back telling me that they were refusing to answer my question over email, but that I am welcome to call in. So messaging them doesnt get a response. On XXXX I messaged them about my missing PSLF qualifying payments AND my urgent problem of their screwup involving my IDR. No response yet. Maybe they prefer phone calls? You would think. But calling them is a nightmare. Today, I called them at XXXX XXXX  and had a one hour and 24 minute long phone call. The bulk of this was on hold. I was able to briefly speak to someone who told me that they were not able to help me because my problems require a senior representative. So it was back to the HOLD queue until I had to hang up around XXXX XXXX. because I had to teach an XXXX  class. I called again at XXXX XXXX. and had another hour and 30 minute phone call, the bulk of it - again - on hold. I briefly spoke to another person who told me that I needed a senior agent, and then back to the hold queue. I did finally speak to one of these senior agents, but they couldnt solve either problem for me and the only resolution they offered me was a forebearance while I go back to Mohelas waiting game. Mohela LOVES to make customers wait, even if waiting causes us inconvenience or possible financial harm. Mohelas excuse for their waiting game is always the same you have to understand that we have millions of applications to process. Sorry. Not good enough. We have a right to expect that we will get the service we need in reasonable time frames. And we also have a right to expect that Mohela will fix their own errors and not expect the customer to just eat the damage. So my point is twofold: One, I want to make the point that I HAVE tried to resolve these issues with Mohela. Its not like I am just jumping straight to asking for outside help. But Mohela makes it very difficult to work with them. And my second point is that this lack of accessibility is itself, I believe, an unfair business practice so I would ask for your help in requiring Mohela to be more accessible.

The PSLF Debacle

I would ask for your help in two respects regarding my PSLF application. First, Mohela wants to pass the buck to the federal government. But this evades taking responsibility for their own actions. Is Mohela the processor of the PSLF program or not? If they are, then they need to be held accountable for timely accounting of these qualifying payments. If they are not the processor of the PSLF program, then my account needs to be managed by whoever it is that is administering the PSLF program. The way it is now, they basically do nothing about your application and then blame the federal government. If the federal government truly is to blame, then Mohela needs to be like a bulldog demanding that the requested information be turned over in a timely fashion. Heck, they ought to file a Freedom of Information Act request on my behalf. But this just goes back to the second thing that I need help with. Mohela has an absurd view of what constitutes a reasonable wait. Like, I think that every sane person would think that not having an answer a year and a half after applying is completely unreasonable. But Mohela thinks that I am the one who is being unreasonable, and that I just ought to wait as long as it takes for them to sit on my application and absolutely never, ever, ask them to do anything. They say on their website that PSLF applications can take up to 90 days. Is it unreasonable to hold them to that? I feel like this waiting game that they like to do is a completely unfair business act. And I feel like their blaming the federal government or the department of education is just a nebulous bogeyman to distract from their own incompetence. 

Now, that having been said, to the extent that the federal government is also delaying, I would appreciate your help with getting a timely answer here from them as well.

So please consider this a formal complaint against Mohela and a formal request for help from your agency, whether that agency is Mohela or the federal government.

Best,
XXXX XXXX