Consumer complaint received 2024-03-19 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:
On XX/XX/XXXX, it was stated I no longer had obligations to pay my student loans were forgiven. I was excited and ecstatic. I went on with my life for 9 months. This occurred due to me confirming my qualifying employer from XXXX as part of the Limited PSLF waiver opportunity. After submitting, my employment, the payment counts updated. I counted all the payments for each loan from XXXX prior to submitting the Limited PSLF waiver in XXXX and it showed I would be over the number of payments required for PSLF. I confirmed multiple times with multiple Mohela reps in XX/XX/XXXX to confirm it's true. It went through the formal process of Loan Forgiveness. I called almost everyday in XXXX to check on my progress. Then I received the email stating my loans are forgiven. A huge weight was lifted. 

On XX/XX/XXXX, I receive a notice with no explanation that my Mohela account is on Administrative Forbearance and the balance is reinstated with over {$2000.00} of interest accrued. I called Mohela and was told by the first rep I spoke to that they see the forgiveness letter and not sure why the balance is reinstated. I was then told that it was a loan discharge error. No reason for why the error occurred and I should have received a letter on XX/XX/XXXX. I received no such letter on the XXXX. I was then directed to the resolution center and left a callback number. I called again and went to the PSLF department of Mohela and was told the forgiveness letter is there and this is not right and the amount should not be there. The PSLF Mohela rep directed me to billing where I waited for 2 hours and hung up because I was getting nowhere and it was XXXX CST on a Friday. 

I called the morning of XX/XX/XXXX and finally got a rep after an hour of waiting. The first rep I spoke to in the morning told me that she saw nothing stating why the loan balance is back and says she sees the forgiveness letter. I was then transferred to an " Admin '' after waiting for another hour and the admin stated the same thing as the previous rep. The rep stated, " There is nothing on your account that states you should have a balance. I have gone through everything and I am not sure why you are on Administrative Forbearance. I also see the forgiveness letter '' I was then directed again to a Resolution Center to leave a callback number. 

On XX/XX/XXXX, I received a message call from Mohela in the XXXX  and a rep left a voicemail stating there's an important message and I should call back. I called back, spoke to another Mohela rep that stated " ... there is no reason why the balance should be on my account. '' And then he stated, " I should have a received a letter on XX/XX/XXXX stating there's a discharge error. '' This is the second and only time I have heard of a discharge error letter. I received no such letter. The only thing I received is a letter just saying I am on Administrative Forbearance with no reason why it's on Administrative Forbearance. 

On the evening of XX/XX/XXXX, I received a call from a Mohela rep that told me my loans were discharged in error due to an error that was found 9 months after my forgiveness was approved. The error was found by the Loan Processing department the week of XX/XX/XXXX. I was also told they miscalculated my employment as well as my PSLF count. They essentially mishandled all of my information and then stated I am obligated to pay back loans. I told the rep that this isn't right and I will not be making payments due to their negligence. I was also told that I would receive 0 % interest until XX/XX/XXXX as an apology for their error and I would have 6 additional months of PSLF added to my current PSLF count. Unclear what my PSLF count is because of all the misleading documentation I have. The rep also told me that it's Mohela 's fault this error occurred. I was also told this error affected around 500 individuals. I was also told there would be " more benefits to come '' and Mohela is " working '' with the Dept. of Education. I was also told, " If you can't afford payments, you can sign up for and IDR plan. '' I was also told by this rep, " You can apply for PSLF since you have 151 qualifying payments. '' I currently work for a non-qualifying non-profit. So, payments I made with my current employer wont count if I submit my current employment. 

On XX/XX/XXXX, I received a letter stating my forgiveness was an error and I am obligated to pay back the loans. The letter is also not dated and I feel that's shady because they date all their letters ( see attached documentation ). I also feel that this is the letter I should have received on the XXXX of XXXX. 

XX/XX/XXXX, I receive a call marked as spam ( this isn't right and seems the number will show up as spam on smart phones ) and it was a Mohela rep calling to follow up on the correspondence letter I received on XX/XX/XXXX. The rep stated, " ... interest has not been accruing from the date I had the forgiveness until the date I received the letter. '' When I said to him, " So, you are telling me, no interest accrued on a {$0.00} balance and now will accrue and continue to accrue starting XX/XX/XXXX? '' He stated, " Correct. '' Essentially, 0 % interest accrued from XX/XX/XXXX- XX/XX/XXXX. Which makes no sense because there wasn't a balance on the account until XX/XX/XXXX. I then asked why the 0 % interest is not added based on what I was told by a previous Mohela rep on XX/XX/XXXX. He stated, " You were given misinformation and the rep shouldn't have told you that. '' I was angry and said a lot of expletives to the rep and hung up on the rep because Mohela is literally stating what the rep stated to me on the XX/XX/XXXX isn't correct even though they are part of the same organization. And whatever is in the letter I received on XX/XX/XXXX is basically what I get. I asked to speak to a supervisor and he stated, " I am the supervisor. There isn't anyone above me. '' I then called Mohela the following morning ( XX/XX/XXXX ) to follow up and the rep stated the exact same thing as the rep from XX/XX/XXXX. I asked to speak to a supervisor for more clarification because I don't know what to do and they have essentially ruined my life and given me no direction. She stated, " I am the supervisor. There isn't anyone above me. '' Verbatim. I would not be allowed to talk to anybody else. I then asked what they are doing for me and the other folks and she stated, " We gave you the 0 % interest that lasted from the date of the forgiveness to the date you received the letter stating the error. '' I asked again about the 0 % interest from what the rep told me on XX/XX/XXXX and she said the same thing as the rep from the previous day. I then asked how 0 % interest can accrue on a {$0.00} balance. And like a robot, she stated that this is the perk we received due to this error and interest started accruing XX/XX/XXXX ( even though the account is on Administrative Forbearance. Eventually, she said she would " escalate '' my situation. I haven't heard back since. 

I told her that's not right and more needs to be done. I also stated I am done with them ; they are a bunch of crooks taking advantage of me ( and others in this situation ) for their mishandling of peoples information and they need to be stopped. Based on a statement/article I read from Biden-Harris : To remedy the impact of these errors on borrowers, the Department directed each servicer to place affected borrowers into administrative forbearance until the issues were resolved. While their loans are in administrative forbearance, borrowers will not owe payments and any accrued interest will be adjusted to zero. Additionally, any months that borrowers spend in administrative forbearance will count as progress toward Public Service Loan Forgiveness or income-driven repayment forgiveness. The Departments action will ensure that borrowers are not harmed by these servicer errors and that servicers are held accountable for their actions. 

They are not adhering to this at all. They are not adhering to any standards or practices in the loan servicing business. Interest is accruing on an account that is under Administrative Forbearance and they are telling me that I am obligated to pay back the interest that's currently accruing. They have also halted the PSLF count on the account. They also reported the loan amount to two of the three credit bureaus while the account is on Administrative Forbearance. 

Now, I am at the end of my rope. I have contacted lawyers. I have submitted complaints to the Dept. Of Ed Ombudsman as well as my state 's Ombudsman. I am currently disputing my credit reports because these crooks ( Mohela ) are putting the balance back on my credit report without my permission ( not supposed to while on Admin Forbearance according to the Biden-Harris Administration ) and placed a loan balance on my Mohela account when they made this mistake and decide they can just do what they want. 

This is not right. My family and I went on with our lives for 9 months after it was reported to all 3 bureaus that the account was paid in full. I have documentation stating everything is paid in full. 

This is my story. I feel more is going to happen and they are getting away with behavior that is borderline predatory. They are not providing any direction and they keep flip flopping on everything they have told me. 

So, I sent a message to Mohela on XX/XX/XXXX, stating I am not making any payments until they figure their lives out and give me direction. I will not be hamstrung by Mohela due to their negligence and no sense of direction. They need to XXXX it up and eat this cost. They went 9 months before finding this " error. '' I made a lot of phone calls to them during the month of XX/XX/XXXX to confirm that my loans were forgiven. I got a lot of " CONGRATULATIONS '' from Mohela reps in XXXX. I move on with my life and now I am back again in the muck with these transgressors ( Mohela ). 

More people need to know what Mohela is doing with people 's lives and how they flip flop, sticking to a script, and not providing any real direction for me ( and other borrowers ). They shouldn't be in the business of handling these types of documents and processes. They are not Gods because they have control of a system they own. This is not right and they need to be held accountable for their actions to those of us trying to make it day by day.

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