Consumer complaint received 2024-02-05
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: MOHELA (WI)

I was in the PSLF program, in fact, I am due quite a large refund and am patiently waiting. This however has to do with the timing and mishandling of my PSLF in collaboration with the consolidation of my fed and FEEL loans and the one-time payment count adjustment. Information provided was not followed through with and I believe did not follow protocol and timelines outlined which resulted in part of my loans not being forgiven. Whether it was purposeful or unintentional, it should be rectified and looked into further because it is affecting others, as well.

When applying for PSLF, borrowers were told NOT to consolidate our FEEL loans if we had made a significant number of qualifying payment, because it would restart the number of payments made back to XXXX. Because I knew I had already overpaid, I did not consolidate. Then, in XXXX XXXX XXXX I saw that there would be a one- time payment count adjustment in XXXX and it would apply to all loans IF they were consolidated ( and it included the FEEL loans this time. ) I called Mohela to be sure I understood this correctly and they assured me it was safe to consolidate and that all of my loans would then be forgiven after the one- time payment adjustment in XXXX. I immediately applied to consolidate my loans, this was on XX/XX/XXXX. The consolidation was granted on XX/XX/XXXX and I received a letter that said they would disburse the funds in XXXX days, unless I changed my mind and contacted them during this time, ( that disbursement would be on XX/XX/XXXX. ) I was notified on XX/XX/XXXX that my PSLF loans had been forgiven. Which now meant that my consolidation would not combine my Fed loans and my FEEL loans, because there were only FEEL left to consolidate.

I called Mohela, because I couldn't believe the timing of this was so hurtful and moved so quickly when I was told it takes at LEAST XXXX months and an application for consolidation could extend this timeline further, ( and let 's be honest, we all know things are taking WAY longer than they say because they are overwhelmed right now. ) The representative was shocked as well, because everything was pushed through in XXXX  months. They wondered if my calling to ask about the consolidation expedited things, because they haven't seen things move that quickly before. ( They are actually the one that suggested I contact you ) Also, I had been told by Mohela representatives and literature online always said that a borrower would be contacted before finalization and have the option to withdraw from the PSLF program if they chose not to accept the forgiveness. ( I always wondered why anyone would do that, but in this case, if I had been notified before it occurred, I could have held it off until after the consolidation and XXXX payment count adjustment took effect, as was recommended to me by the representative ) I called the same day I received the email about the forgiveness ( XX/XX/XXXX ) to try and hold it off, but they said it was already done and there was nothing they could do about it. 

I also called and spoke with XXXX, they said there is nothing they can do either. 

Over the course of the past couple of months I have called and spoken with several different representatives and supervisors at Mohela to see if they can't at least apply the XXXX payment count that was approved for my fed loans onto my FEEL loans, since that was the spirit of the XXXX payment count adjustment, and because they should have contacted me prior to the finalization of the forgiveness, but they say their hands are tied and they can't. At least XXXX of the representatives say they have seen this happen to others, as well, and have directed me to file this complaint. I have to believe that there is an ulterior motive for pushing the forgiveness through before the consolidation and not contacting me before finalization or the representatives would not be referring me to file a complaint.

If this is a completely honest comedy of errors, than I believe it should minimally draw attention to ( and correction of ) the fact that many borrowers did not consolidate earlier, because we were told it would be detrimental, then the rules changed to help borrowers/parents who were paying on FEEL loans AND their own loans and allow them to consolidate the XXXX without losing the years of payments they had already made, and in fact it was intended to help streamline the process and apply the maximum number of payments made on ANY loan to ALL loans. There should be a way to apply the payment count to my FEEL loans, especially when they know I was consolidating AND considering they did not contact me prior to finalizing the forgiveness as was stated on the website at the time and reiterated to me from the representatives. I was assured ( because I specifically asked ) that IF the forgiveness paperwork went through before the consolidation I would still have the option to opt out and reapply after the consolidation and XXXX payment count adjustment. 

The representatives were sure with the backlog of applications and time it was taking to process the PSLF paperwork that I should not withdraw my application because it could further complicate the process and that, if need be, there was the safety net in place for me to opt-out of the forgiveness before it was issued if my consolidation had not taken affect. Of course, in fact, the safety net was not employed and the forgiveness was moved ahead in half the time they said it would MINIMALLY take ( and in fact I was told the consolidation process would likely delay the PSLF process ). This leaves me with a loan that is not forgiven even though it should have been because I followed all directions and recommendations given to me by Mohela. 

Every representative I talked with also commented on how I had the highest payment count they had seen, so I wonder if Mohela did not want all of those payments to count toward my FEEL loans and ultimately forgiven whereas applying counts to others who would still have years of payments ahead of them was less of a big deal? I have no idea what, or if, they stand to lose anything financially through this forgiveness process, but it does seem strange that protocols and timelines did not seem to apply in this case and that a process that should have taken a minimum of XXXX months took effect just XXXX business days after discussing the situation with a representative. 

Because I was in constant contact to be sure I followed all of the directions, did everything I was supposed to do when I was supposed to do it, these loans should have been included in my forgiveness. The timing of communication with XXXX, lack of communication with me, and the apparent expedition of my forgiveness before the consolidation and one-time payment count adjustment could occur are reasons I believe their practices should be investigated and my case reviewed for a fair resolution.

Due to the timing of when borrowers, particularly parents could consolidate the FEEL loans and when the one-time payment count adjustment would occur, I am sure you will be able to see how this could negatively impact others, as well. Even if Mohela stands to gain nothing from pushing the PSLF through before the consolidation and one-time payment count adjustment period could apply, it's actions should not hurt the borrowers who the program was meant to help. ( A program, by the way I was not made aware of, even though I hold FEEL loans. I accidentally happened across it while on the website applying for unemployment forbearance. Another discretion I feel should be investigated. Why are borrowers not receiving mass emails when new programs and rule changes take effect? )