Consumer complaint received 2025-08-19 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: MOHELA
State: IL

Complaint narrative:
This is my third time submitting a complaint about Mohela and their handling of student loans. While trying to pay off my student loans by draining a majority of my savings account due to their negligence, the processing of the payments I made didn't apply payments appropriately because of how the Mohela system is designed to process payments. Because the Mohela system is weird and quite frankly, abysmal, it showed one of my consolidated loans ( 1-01 DL Consolidated - Subsidized ) with an overpayment of XXXX XXXXXXXX even though the {$3800.00} should have been applied to the second loan ( 1-02 DL Consolidated - Unsubsidized ). Because of this, there was {$13000.00} on the second loan ( 1-02 DL Consolidated - Unsubsidized ) instead of {$10000.00}.

When I saw this, I called Mohela. Then I went through the process of talking to the first person for 5 seconds and following the script and then being transferred to an " Advanced Agent ( nothing advanced about refunds ) '' on hold for four hours before getting a Mohela rep that could help ( if you call what they do in general help ). The Mohela rep then told me the payment on will be applied within 30-90 days ; after interest would have started accruing XX/XX/XXXX ( which is what I want to avoid ). I then asked if there's a way to confirm and I was told " No and I would just have to wait and see. '' After being burned twice financially by Mohela : 1. Rescinding my Loan forgiveness and asking me to pay it back in full due to their negligence of my paperwork and PSLF status and 2 ) accruing interest while on the SAVE plan in XXXX, and not giving me back the interest payment of {$170.00} I made on XX/XX/XXXX. 

See XXXX  titled " ForbearnaceLetterNoInterestXXXX " and see the letter is dated XX/XX/XXXX. 

See the XXXX  titled " MOHELA _ Account HistoryXXXX '' and you will see the payment processed on XX/XX/XXXX still has {$170.00} associated with it and no interest should have been on the account.

I decided I am not going to wait 30-90 days and have interest start accruing and dealing with another mess that they would cause while waiting for a payment to apply. I decided to dip into the rest of my savings to pay the {$13000.00} to avoid interest.

When I went to make the payment, I was again confused, because I have the option of putting specific amounts towards loans. When I went to put in {$13000.00} towards the loan that needed to be paid off, it kept changing the amount whenever I hit " Next '' and would state {$17000.00} would be withdrawn from my account. I just needed to pay {$13000.00}, not {$17000.00}. I then put in the amount of {$10000.00} and then it displayed {$13000.00} as the confirmation and that was the only way for me to pay off the loan without interest accruing starting XX/XX/XXXX. I then accepted the confirmation. After doing that, I got an email confirmation stating {$13000.00} would be withdrawn from my account ( see attachment titled " Balance_XXXXXXXX XXXX XXXXXXXX '' ). This is confusing and the system kept changing the amount. I decided that this is my fate and just let it be. Again, don't want interest accruing starting XX/XX/XXXX and then to have more chaos being added to my life by Mohela. 

After getting the confirmation and seeing {$13000.00} withdrawn from my bank account, a balance of XXXX XXXXXXXX is currently displayed on

the 1-02 DL Consolidated - Unsubsidized loan. It has been three weeks since I have paid my student loans in full and I have not received my refund of {$3800.00} in addition to the {$170.00} that was processed in interest when interest should not have been accruing. And my studentaid.gov account currently shows that my loans are 100 % paid off, but it states {$2.00} remains on the principal overall because my Mohela account is displaying a negative balance. This is highly frustrating and I would like this resolved ASAP.

Company response to consumer: Closed with explanation