Consumer complaint received 2025-09-01 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA
State: FL

Complaint narrative:
I am filing a formal complaint regarding a series of serious issues with the servicing of myXX/XX/XXXXloan, which was consolidated and is currently being managed by Mohela. 

Here is a summary of the timeline and issues : I paid all accrued interest on myXX/XX/XXXX loan prior to consolidation. 

The loan was successfully consolidated, and my new monthly payment was set at {$300.00}. 

On XX/XX/XXXX, I received an email from Mohela informing me that my account would be transitioned to a new servicing platform on XX/XX/XXXX. 

After the transition, I noticed that two of my payments ( XXXX and XX/XX/XXXX ) were not reflected on my account. I called Mohela in XX/XX/XXXX, and a representative confirmed that the payments existed but were showing only on the old system. I was told it would be corrected. 

On XX/XX/XXXX, I was informed that the issue had been resolved. 

I then made a {$160.00} payment toward the principal and, on XX/XX/XXXX, paid an additional {$350.00} to cover interest and extra principal. 

However, on XX/XX/XXXX, I contacted Mohela again to ask why a small additional payment ( around {$14.00} ) was not reflected as a principal payment monthly. The representative could not explain and said a supervisor would call me back. 

A few days later, I received a notice from Mohela stating that my next payment due in XXXX XXXX would be {$210.00}, a decrease from my regular monthly payment of {$300.00} which raised concerns. 

Upon checking my account, I discovered that my {$160.00} payment, which had originally been applied to principal, had been reclassified as capitalized interest, with no valid explanation. This change directly impacted my loan balance and monthly payment calculation. 

I have consistently paid above the minimum and ahead of schedule, and yet my balance has not gone down in accordance with what should be expected based on payments made and interest accrued. 

A Mohela supervisor called me two days later but was unable to provide clarity and abruptly ended the call. 

To date, Mohela has also failed to report the XXXX and XX/XX/XXXX payments to the credit bureaus, which could negatively affect my credit history. 

This pattern of mismanagement, unexplained reclassification of payments, lack of transparency, and failure to report accurate information has caused me unnecessary stress and financial confusion. I am requesting an immediate and thorough review of : My full account and payment history from XX/XX/XXXX to present and how payments were applied. 

An explanation of why payments were reclassified from principal to capitalized interest. 

A correction to my account to reflect proper application of payments. 

Correct and timely updates to the credit bureaus regarding all payments made. 

A written explanation of any interest capitalization and how it was calculated after consolidation, especially since all interest was paid prior to consolidation.

Company response to consumer: Untimely response