Consumer complaint received 2026-06-02 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: TX

Complaint narrative:
I am writing to formally request the complete discharge of all student loans currently held by Mohela. This request is predicated on a documented pattern of predatory practices, deceptive guidance, and systematic mismanagement by Mohela and its preceding servicers ( XXXX, XXXX, and XXXX XXXX ), which has resulted in severe and avoidable financial devastation. The amount of undue stress placed on myself and my entire family is outrageous, and resulted in both physical, mental, and emotional harm that can not be undone. From the outset of my repayment period, I was consistently misguided by loan servicers. Despite the availability of income-driven repayment ( IDR ) plans that would have offered affordable payments and a clear path to eventual forgiveness, I was actively steered towards forbearance and deferment. This persistent redirection, coupled with a critical lack of transparent information regarding my entitled repayment options, directly led to the capitalization of interest, causing my principal balance to inflate far beyond the original borrowed amount. This manipulation was not merely negligent ; it represents a deliberate strategy that maximized profits for the servicers while trapping me in an escalating cycle of debt. During my repayment period, I was switched to an Income-Contingent Repayment ( ICR ) plan occurred despite my lack of eligibility, without my informed consent, and as a result of fraudulent administrative activity. To be in the XXXX plan, you have to hold parent plus loans. I have never held any Parent PLUS loans, nor have I ever consolidated Parent PLUS loans. Therefore, I do not understand why I was placed into an XXXX repayment plan, particularly if that placement was based on eligibility criteria that I did not meet. I do not recall being adequately informed of the consequences of this repayment plan or providing informed consent to enrollment under circumstances that would materially affect my repayment obligations. My enrollment in the XXXX plan was the result of fraudulent, deceptive administrative practices from the Department of Education. As a direct result of being placed into this repayment plan, I incurred substantially higher monthly payments than I otherwise would have been required to make under alternative income-driven repayment options. My payment more than doubled. These payments imposed a severe financial hardship on my family and me. In order to avoid delinquency or default, we were forced to make significant sacrifices regarding essential living expenses and basic household needs. Federal courts have recognized that government agencies must comply with their own regulations and may not impose adverse consequences on borrowers based on administrative errors or actions that are arbitrary, capricious, or contrary to law. See, XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX ) ( agency actions must have a rational basis and comply with governing law ), and XXXX XXXX XXXX, XXXX XXXX XXXX ( XXXX ) ( agencies are required to follow their own regulations and procedures ). My case for fraudulent practices being done by the Department of Education is well supported by the documented findings that student loan servicers and administrators have engaged in deceptive practices involving borrower repayment options. In Consumer Financial Protection Bureau XXXX XXXX XXXX, federal regulators alleged that borrowers were improperly steered into repayment arrangements that were more costly and less beneficial than available alternatives, resulting in unnecessary financial hardship. Similar allegations led to the XXXX multistate Attorneys General settlement and the XXXX CFPB settlement with XXXX, both of which addressed claims that borrowers were misled regarding repayment programs and suffered financial harm as a result. While my situation involves the Department of Education rather than a private servicer, the underlying principle is the same : borrowers should not be placed into repayment programs for which they may be ineligible, nor should they be deprived of accurate information necessary to make informed financial decisions. As a result, my family and I have suffered the same type of financial injury recognized in these enforcement actions. Mohela 's conduct has further exacerbated this undue burden. The company has a demonstrated history of misreporting my payment status to credit agencies, a severe breach of its obligations that has inflicted substantial damage to my credit score and financial reputation. The misinformation provided by Mohela representatives directly impeded my ability to pursue accurate repayment strategies and has contributed significantly to the overwhelming debt I now face. This company also without my knowledge switched my repayment program from These actions are not isolated incidents but reflect a systemic pattern of fraudulent and misleading behavior for which Mohela faces numerous lawsuits from various state attorneys general and the Consumer Financial Protection Bureau ( CFPB ). Their practices exemplify a disregard for borrower welfare and a fundamental failure to adhere to ethical servicing standards. The financial and emotional toll of these practices has been immense, causing prolonged distress and hindering my ability to achieve financial stability. The misinformation provided by their representatives has delayed my pursuit of more favorable repayment options and contributed to an overwhelming amount of accrued debt, well beyond what I originally borrowed. These tactics are consistent with the widespread fraudulent behavior for which Mohela has been sued by numerous states and the Consumer Financial Protection Bureau ( CFPB ). Mohela and its predecessors ' conduct has caused me significant financial harm, mental distress, and a long-term burden that could have been avoided with honest and fair guidance. As a borrower, I relied on Mohela 's and the predecessors ' advice and entrusted them to manage my student loans. Therefore, given the egregious nature of these violations and the profound harm they have inflicted, I confidently assert my eligibility for the full discharge of my student loans. I urge the appropriate authorities to recognize these systemic failures and to grant my request for full loan discharge. I trust that the CFPB will act decisively to deliver a resolution that rectifies these wrongs and ensures justice for borrowers like myself who have been unjustly burdened. The misinformation provided by their representatives has delayed my pursuit of more favorable repayment options and contributed to an overwhelming amount of accrued debt, well beyond what I originally borrowed. These tactics are consistent with the widespread fraudulent behavior for which Mohela has been sued by numerous states and the Consumer Financial Protection Bureau ( CFPB ). These loan servicers ' conduct has caused me significant financial harm, mental distress, and a long-term burden that could have been avoided with honest and fair guidance. As a borrower who relied on Mohela 's and the predecessors ' advice and entrusted them to manage my student loans with honesty and integrity as student loan companies.

Company response to consumer: Untimely response