Consumer complaint received 2024-01-21 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 was under an income-based repayment plan that averaged about {$250.00} per month in payments, for years. Last year I applied for Public Service Loan Forgiveness. My loans were transferred from XXXX to Mohela. Loan payments began last XXXX following the end of covid pause. No problems with XXXX payment, the normal {$250.00} was debited from my account. 
However, on XX/XX/XXXX Mohela, with no authorization and no explanation, auto-debited {$6800.00} from my account, causing it to be overdrafted. I discovered this on XXXX XXXX XX/XX/XXXX. I immediately called Mohela. I asked them what happened and requested a refund, agreeing to a refund of the amount minus my XXXX monthly payment. They did not provide an explanation, only asking if I authorized someone else to have access to my account, which I have not. They agreed to a refund and stated it would take XXXX days to process. 
The next week on XX/XX/XXXX I called Mohela again to confirm the refund was being processed, which was confirmed. However, the account person blamed the large auto-debit on my failure to renew my income-based repayment plan. I asked for an email in writing confirming the refund. The account person agreed, then did not include that language in the email I received. 
I patiently waited for my refund to be processed. I remember seeing a national story sometime during this time which is when I learned I was not the only person this had happened to. The article stated that everyone affected would have their accounts put in forbearance until the issue was cleared up. I checked my account online and confirmed my account had been placed in forbearance. The article stated that months in forbearance would count toward loan repayment. 
I became suspicious again when I received emails from Mohela regarding not paying my XXXX and XXXX loan payments. But I dismissed them, believing my account was still in forbearance while my refund was being processed. On one weekend in XXXX I checked my account online and realized my account was taken off forbearance. I still had not received my refund. On the morning of XX/XX/XXXX I called Mohela again and was told that my refund was not going to be processed because it was determined to be an " impermissible refund '' but that the XXXX payment would be applied to future loan payments. I had not been notified of this decision by Mohela, and as stated earlier if that was the case, why was I receiving emails regarding not making loan payments in XXXX and XXXX? During the XX/XX/XXXX phone call I asked to speak with a supervisor. I waited on hold for more than XXXX minutes, and no supervisor came to the phone. I was put in a callback system that stated a supervisor would call me back the same day. I never received a phone call. 
Later that same day on XX/XX/XXXX my wife called Mohela on my behalf and spoke to a different account representative. She was given different information about my account. This time, Mohela stated that only XXXX XXXX of mine was put into forbearance. The original refund request from XXXX was cancelled and Mohela 's accounting had created a new refund request on XX/XX/14. My loans are now in overdue status because of no payment. They also stated for the first time that the entire payment from XXXX had to be refunded and they could not do partial refunds. My wife again left her number for a supervisor to call back, to an automated callback system that promises a supervisor will call you back on the same day. She never received a call back. 
At this point I believe Mohela has committed grand theft- they have lied, failed to provide me information, and given conflicting information every time I call. They are refusing to refund my money and I no longer trust anything they say to me. I didn't attach any documents to this complaint but I can provide documented proof of everything, including screenshots of my bank account and phone showing call history should that be necessary.

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