Consumer complaint received 2026-02-05 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem with forgiveness, cancellation, or discharge
Company: MOHELA
State: TX

Complaint narrative:
I am a member of the XXXXXXXX XXXX XXXXXXXX class action settlement. On XX/XX/XXXX, the U.S. Department of Education approved my XXXX XXXX to Repayment discharge applications for XXXX schools. The approval letters stated I am entitled to full discharge of my federal student loans AND a refund for any payments made to the Department of Education on these loans, including loans I previously paid off. 

The approval letters specifically stated : " Your loan servicer will let you know if you are eligible for a payment refund, which would be mailed to you. '' THE PROBLEM : It is now XX/XX/XXXX - over XXXX months ( XXXX  days ) since my discharge approval. Despite multiple contacts with MOHELA and the Department of Education, I have received NO notification about my refund eligibility, NO calculation of the refund amount owed, NO timeline for processing, and NO submission to the XXXX Treasury for payment. 

WHAT MOHELA HAS TOLD ME : When I contact MOHELA customer service, representatives tell me they " have to research the amount first '' but can not provide any estimated date for when the refund will be processed or when the refund request will be submitted to the U.S. Treasury. They simply say they have " no estimated date. '' WHAT THE DEPARTMENT OF EDUCATION HAS TOLD ME : When I contact the Department of Education Federal Student Aid office at the Borrower Defense hotline, representatives can not provide information about my refund status and state that the refund " comes from the Department of Treasury. '' They can not explain who is responsible for notifying Treasury or provide any timeline. XXXX representative told me the refund comes from Treasury but could not explain who initiates the refund request. 

WHY THIS IS UNACCEPTABLE : According to Federal Student Aid documentation, refunds are typically processed in XXXX to XXXX weeks after discharge is complete, with standard processing taking XXXX to XXXX weeks. It has been over 6 months. 

MOHELA is responsible for calculating the refund amount and submitting the refund request to the U.S. Treasury. This is confirmed on the Federal Student Aid website which states : " Refunds are initiated by MOHELA and processed by the U.S. Treasury. '' Yet MOHELA claims they can not provide any timeline for completing their responsibility. 

Different representatives from MOHELA and the Department of Education provide contradictory information about the process, leaving borrowers confused and without recourse. 

MOHELA 's failure to process these refunds in a timely manner violates the terms of the court-approved XXXX settlement agreement and deprives me of funds I am legally entitled to receive. 

I have been making payments on these loans for years. I am owed a substantial refund and the delay is causing financial hardship. 


DESIRED RESOLUTION : Immediate calculation and submission of my refund to the U.S. Treasury with a specific timeline provided for when I will receive payment. I am entitled to these refunds under a federal court-approved settlement agreement and MOHELA 's failure to process them after over 6 months is unacceptable.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation