Consumer complaint received 2025-01-20 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: FL

Complaint narrative:
On XX/XX/year>, a Direct Consolidation Loan Application was submitted for my student loans. The application was for the Saving on a Valuable Education ( SAVE ) Income-Driven ( IDR ) Repayment Plan Type and PSLF. The loans were consolidated and moved from XXXX to MOHELA due to the PSLF request given that at the time MOHELA was serving as the federally authorized PSLF servicer. 

A letter was subsequently received from MOHELA dated XX/XX/year>XXXX  stating that my loans had been consolidated and moved to them under a Standard payment plan. This Standard payment plan that I was placed on by MOHELA was not the IDR SAVE payment plan I had requested and did not meet the IDR standards for PSLF qualifying payment plans, negating the whole reason for the account being moved to MOHELA. 

Upon noticing that the repayment plan was Standard and not SAVE as requested, I called MOHELA to determine why my application was not processed correctly and to determine how to get into the eligible PSLF qualifying plan as I had requested. I was told that they did not receive the IDR application for processing and that I needed to resubmit a new IDR application. 

As directed by MOHELA, I submitted a new IDR application for the SAVE Plan on XX/XX/year>. On that same day, XX/XX/year>, the original SAVE Plan application was closed in the Student Aid portal, which means that they mislead me by saying that they could not see the original application, otherwise they could not have closed out my original application. 

By XXXX, all SAVE Plan applications were put on hold due to litigation. As a result, I have become one of the many student loan borrowers that is in eternal limbo without clear direction on how to resolve the issues that have been caused by no fault of my own. 

When going through the consolidation process, the student aid site ensured borrowers that payment counts would not be reset. But as my account now stands, previous years of IDR payments for over a decade that were made towards the 25 years of payments for the IDR forgiveness milestone have been reset. I have also lost 9+ months and counting of working for a qualifying PSLF employer and not being in a qualifying PSLF repayment plan due to negligence of MOHELA and their delay of processing my application. 

Through no fault of my own, my account has been moved to a servicer that is incompetent, has been misguiding countless borrowers, and placing them into plans incorrectly with no path forward. Because of being incorrectly placed on an ineligible PSLF plan by MOHELA despite my request, and being placed on an extended forbearance pending litigation, I am losing qualifying PSLF payment time with no guidance on how to resolve these issues. 

Please also note that as of XX/XX/year>, MOHELA was removed as the only PSLF servicer. This was 2 days after my consolidation application was submitted. The loans should not have been moved to MOHELA, there were already known issues with MOHELA as a PSLF servicer at this time.

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