Consumer complaint received 2026-06-02 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Incorrect information on your report — Account status incorrect
Company: MOHELA
State: IL

Complaint narrative:
I am filing this complaint against MOHELA, an official servicer of Federal Student Aid, for persistently and erroneously reporting delinquency on my federal student loan account to consumer reporting agencies, issuing an inaccurate default warning notice, and failing to correct a servicing error they have acknowledged in writing causing ongoing damage to my credit score and financial standing. I hold multiple federal XXXX XXXX ( subsidized and unsubsidized ) serviced by MOHELA, all originally from the same institution. As of the date of this complaint ( XX/XX/XXXX ), my Total Current Balance with MOHELA is {$2800.00} across four active loans. My Payment History Is Perfect and Fully Documented My MOHELA account history shows thirteen consecutive on-time payments with zero gaps, zero missed payments, and zero returned payments, from XX/XX/XXXX through XX/XX/XXXX. The payments are as follows : XX/XX/XXXX : {$240.00} XX/XX/XXXX : {$240.00} XX/XX/XXXX : {$2000.00} ( large additional payoff payment ; Confirmation # XXXX, submitted XX/XX/XXXX ) XX/XX/XXXX : {$250.00} XX/XX/XXXX : {$250.00} XX/XX/XXXX : {$250.00} XX/XX/XXXX : {$250.00} XX/XX/XXXX : {$290.00} XX/XX/XXXX : {$290.00} XX/XX/XXXX : {$290.00} XX/XX/XXXX : {$290.00} XX/XX/XXXX : {$290.00} XX/XX/XXXX : {$290.00} All payments are confirmed received in MOHELA 's own account history. Additionally, I have active Auto Pay enrollment, with the next scheduled transfer of {$290.00} on XX/XX/XXXX. One of my loans ( an unsubsidized XXXX XXXX, XXXX XXXX ) reached a {$0.00} balance and was marked Paid in Full on XX/XX/XXXX. My current Account Summary as of XX/XX/XXXX confirms : T otal Payment Due = {$0.00}. MOHELA 's Error : An " Embedded Delinquency '' on Two Subsidized Loans Despite the above payment history, MOHELA has been reporting delinquency to consumer reporting agencies on my account, negatively impacting my credit score over a period of several months. The delinquency pertains to two subsidized XXXX ( disbursed in XX/XX/XXXX and XX/XX/XXXX, respectively ). This is not a legitimate delinquency. It is a servicer-side processing error. MOHELA itself has described it, in writing, as an " Embedded Delinquency issue. '' MOHELA 's Own Written Acknowledgment of Their Error ( XX/XX/XXXX ) On XX/XX/XXXX, I contacted MOHELA 's Resolutions team by phone to escalate this unresolved issue. Following that call, MOHELA 's Resolutions Team sent me a written message through my account inbox that same day. The message states, in part : " Regarding conversation on XX/XX/XXXX with Resolutions agent regarding an Embedded Delinquency issue that has been unsolved. A escalated email has been sent to appropriate departments within MOHELA to get this completed for you as soon as possible. We apologize for any inconvenience this delay has caused and advise to give 3-5 business days to be reviewed and completed. '' MOHELA explicitly acknowledged : ( 1 ) the delinquency is an internal error, not a legitimate past-due status ; ( 2 ) the issue had already been unresolved for a period of time prior to this contact; and ( 3 ) they promised to resolve it within 3-5 business days. That was over three months ago. The issue has not been resolved. I Have Contacted MOHELA No Fewer Than Six Times Prior to and since the XX/XX/XXXX written acknowledgment, I have contacted MOHELA at least six times by phone to report this issue and request correction. Each time, I was told the matter would be escalated and resolved. Each time, nothing happened. I never received a follow-up from MOHELA confirming corrective action. My credit report has not been corrected. MOHELA Sent a Default Warning Notice on XX/XX/XXXX With {$0.00} Past Due On XX/XX/XXXX more than three months after their written acknowledgment of their own error MOHELA sent me a formal default warning letter. The letter warns that my loans will default within 30 days if the delinquency is not resolved, and lists severe consequences including wage garnishment, tax refund offset, and immediate full repayment of the outstanding balance. The letter contains a critical and irreconcilable internal contradiction : Past Due Amount : {$0.00} Total Amount Due : {$1600.00} ( described as the total balance of the two flagged loans ) MOHELA is simultaneously stating that I owe nothing past due and threatening default. This is not a legitimate default scenario. The {$0.00} past-due figure is accurate and consistent with my account history and current Account Summary. The default threat is not. The two loans listed in the default notice correspond to the same subsidized loans ( Disbursement Dates XX/XX/XXXX and XX/XX/XXXX ) that carry the acknowledged " Embedded Delinquency '' error. MOHELA has sent a default notice on an account that, by their own records, has no past-due balance. Summary of Violations and Harms Inaccurate credit reporting. MOHELA has been furnishing inaccurate delinquency information to consumer reporting agencies for several months, in violation of their obligations under the Fair Credit Reporting Act ( FCRA ). They have acknowledged in writing that the delinquency is a servicer error, not an actual past-due status on my account. Failure to investigate and correct after acknowledgment. After providing a written acknowledgment of the error on XX/XX/XXXX, MOHELA failed to correct the underlying error or update the credit bureaus within the 3-5 business days they promised, or at any point in the three-plus months since. Issuance of a materially false default warning. MOHELA sent a formal default notice on XX/XX/XXXX asserting that my loans are approaching default, despite their own records showing {$0.00} past due. This notice threatens severe legal and financial consequences ( wage garnishment, tax offset, legal action ) on the basis of a delinquency MOHELA 's own system contradicts. Pattern of non-responsiveness. Despite no fewer than six consumer contacts requesting resolution including an escalated case that generated a written commitment to act MOHELA has taken no corrective action, provided no follow-up, and caused continuing harm to my credit profile. What I Am Requesting MOHELA immediately correct the " Embedded Delinquency '' error on my account. MOHELA submit corrected information to all consumer reporting agencies ( XXXX XXXX XXXX ), removing all erroneous delinquency records associated with this servicing error. MOHELA provide written confirmation to me that the error has been corrected and that notifications have been sent to all three credit bureaus. MOHELA rescind and document the withdrawal of the XX/XX/XXXX default notice, which is inaccurate and unsupported by my account data. The CFPB investigate this matter and take appropriate action to ensure MOHELA is complying with its obligations as a furnisher of consumer credit information. I have retained all supporting documentation, including : complete MOHELA account history showing uninterrupted payment record ; payment confirmation email for the {$2000.00} payment ( Confirmation # XXXX ) ; MOHELA 's XX/XX/XXXX written acknowledgment of the Embedded Delinquency error ; the XX/XX/XXXX default notice ; and the XX/XX/XXXX Account Summary confirming Total Payment Due of {$0.00}.

Company response to consumer: Untimely response