Consumer complaint received 2025-02-20 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: CA

Complaint narrative:
XXXX Entered XXXX with XXXX qualifying payments XXXX Placed in forbearance ( unrequested ) XXXX Requested XXXX email and by phone to get out of forbearance XXXX Requested buyback amount ( verified it was received ) XXXX MOHELA responded via email with the wrong automated response XXXX Requested buyback amount ( verified it was received ) XXXX Called XXXX XXXX Verified Buyback requests was received and was told to file a complaint - XX/XX/XXXX Complained with MOHELA that Buyback was not responded to, and request to get out forbearance had still not happened XXXX Complained with Student Aid that Buyback was not responded to, and request to get out forbearance had still not happened XX/XX/XXXX filed an another complaint about no response to Buyback and the refusal to let me out of forbearance XXXX. FAIR CREDIT REPORTING ACT ( FCRA ) VIOLATIONS ( XXXX U.S.C. XXXX XXXX XXXX. ) Inaccurate and Misleading Credit Reporting : MOHELA continues to report my student loan as an enforceable debt, even though it is under federal review through XXXX XXXX to Repayment ( BDR ) and may be deemed predatory and subject to cancellation. 

Failure to XXXX XXXX XXXX as Disputed as Required by FCRA : FCRA mandates that any disputed debt must be reported as such. MOHELA has not marked this loan as disputed, violating my legal rights. 

Materially Misleading Credit Reporting : Lenders rely on MOHELAs false reporting, which has caused me direct financial harm, including denial of a mortgage and inability to build equity. 

XXXX. DUE PROCESS VIOLATIONS ( XXXX AND XXXX AMENDMENTS OF THE XXXX CONSTITUTION ) Government contractors, like MOHELA, can not restrict my financial opportunities while my debt is under legal review. Until Borrower Defense issues a final decision, I have not been given due process before suffering financial harm. 

Blocking me from accessing financial stability, including home ownership, without a final legal determination is unconstitutional. 

XXXX. VIOLATION OF MY RIGHT TO BE SECURE IN MY PERSON AND PROPERTY ( XXXX AND XXXX AMENDMENTS ) MOHELAs false reporting is an arbitrary interference in my financial affairs, violating my right to pursue financial security. 

I have been denied a mortgage and the ability to provide my daughter with a stable home, violating my fundamental rights. 

The U.S. Constitution protects individuals from unjust government interference in their personal and financial lives. MOHELA, acting as an agent of the federal government, is violating this principle. 

XXXX. POTENTIAL XXXX AMENDMENT VIOLATION IF MY DEBT IS DEEMED PREDATORY The XXXX Amendment prohibits involuntary servitude, which includes predatory financial entrapment. 

If my Borrower Defense claim is approved, it will mean that MOHELA has forced me into an unjust and illegal financial obligation. 

Continuing to report a fraudulent or predatory loan as valid is economic coercion. 

XXXX. FEDERAL TRADE COMMISSION ACT VIOLATIONS UNFAIR & DECEPTIVE PRACTICES MOHELA is misrepresenting the legal status of my loans to credit bureaus. 

Knowingly reporting disputed loans as valid is deceptive and constitutes consumer fraud. 

If my loan is deemed predatory, MOHELA has knowingly participated in reporting fraudulent debt. 

XXXX. SYSTEMIC LOAN SERVICER MISMANAGEMENT REQUIRES FEDERAL INVESTIGATION MOHELA has a documented history of mishandling student loans, failing to follow proper credit reporting laws, and ignoring federal borrower protections. 

This is a systemic issue, not just an individual complaint. The Department of Education and CFPB must investigate MOHELA for broader mismanagement. 

FORMAL DEMAND FOR CORRECTIVE ACTION I demand that MOHELA take the following corrective actions immediately : XXXX. Update all credit reporting to reflect that this debt is disputed and under federal review. 

XXXX. Cease reporting my loans as enforceable debts until Borrower Defense issues a final determination. 

XXXX. Notify all credit bureaus ( XXXX, XXXX, and XXXX ) that the previous reporting was inaccurate and ensure that the necessary corrections are made. 

XXXX. Provide written confirmation that these corrections have been made within 15 days. 

ESCALATION REQUEST CFPB LEGAL ASSISTANCE & FEDERAL INVESTIGATION If MOHELA does not comply, I request CFPBs assistance in obtaining legal representation to file claims against MOHELA for : FCRA violations ( false reporting and failure to report dispute ) Due process violations ( financial restrictions before legal resolution ) Consumer fraud and deceptive practices ( false credit reporting ) Systemic mismanagement ( failure to follow borrower protection laws ) Additionally, I request CFPB to refer this matter to : The U.S. Department of Educations Office of Inspector General ( OIG ) for an investigation into MOHELAs handling of Borrower Defense loans.

The Federal Trade Commission ( FTC ) for violations of consumer protection laws.

Congressional oversight committees investigating student loan servicer misconduct.

CONCLUSION MOHELAs response is not only legally insufficient, but it actively harms borrowers, violates constitutional protections, and continues a pattern of systemic financial misconduct. 

This case requires immediate corrective action and legal escalation. I request CFPBs assistance in holding MOHELA accountable and securing the legal representation necessary to pursue further action. 



SUBJECT : ADDENDUM TO COMPLAINT MOHELA & DEPARTMENT OF EDUCATIONS SYSTEMIC MISMANAGEMENT AND FINANCIAL BLOCKADE Dear Consumer Financial Protection Bureau, I am submitting this addendum to my previous complaint regarding MOHELAs and the U.S. Department of Educations systemic mismanagement, illegal financial restrictions, and constitutional violations. 

In addition to the Fair Credit Reporting Act ( FCRA ) violations, due process violations, and deceptive financial reporting practices I previously outlined, I am also trapped in the SAVE Plan against my will, preventing me from qualifying for a mortgage. 

XXXX. TRAPPED IN THE SAVE PLAN DENIAL OF FINANCIAL FREEDOM MOHELA and the Department of Education have prevented me from switching to a different Income-Driven Repayment ( IDR ) plan, despite my repeated attempts to do so. 

The SAVE Plan, as currently structured, falsely reports that I owe {$0.00} per month in student loan payments. 

This inflates my debt-to-income ratio ( DTI ), making it impossible for me to qualify for a mortgage. 

When I attempted to switch to a different XXXX plan that would accurately reflect my payments and allow me to obtain financing, MOHELA and the Department of Education refused to process the change, effectively trapping me in SAVE. 

This is not a simple clerical issuethis is systemic mismanagement designed to block borrowers from achieving financial stability. 

XXXX. MOHELA & DEPARTMENT OF EDUCATION VIOLATING FEDERAL LAWS BY TRAPPING BORROWERS IN SAVE MOHELA and the Department of Educations actions violate multiple federal laws, including : Higher Education Act ( XXXX XXXX. XXXX et seq. ) Borrowers have the legal right to select an appropriate repayment plan that fits their financial situation. By denying me access to a different XXXX plan, MOHELA is violating my rights under federal law. 

Consumer Financial Protection Act ( XXXX XXXX. XXXX et seq. ) Blocking borrowers from making financially sound decisions by misreporting their debt or restricting repayment options constitutes an unfair, deceptive, and abusive financial practice ( XXXX ). 

Equal Credit Opportunity Act ( XXXX XXXX. XXXX et seq. ) Borrowers have the right to fair lending opportunities. By artificially inflating my DTI ratio with the false {$0.00} payment structure, MOHELA is restricting my access to credit and mortgage lending in an unlawful manner. 

XXXX. MOHELAS FINANCIAL BLOCKADE IS NOT ABOUT REPAYMENTITS ABOUT CONTROL & SERVITUDE MOHELAs actions are financially irrational if their goal were truly to recover money from borrowers. The most likely way for them to recoup repayment from me is for me to be financially successful. 

By preventing me from switching repayment plans and obtaining a mortgage, MOHELA is deliberately blocking me from building wealth and financial stability. 

This is financial control and economic servitude, not a repayment strategy. 

Instead of supporting borrowers in becoming financially stable and contributing to the economy, MOHELA is restricting financial opportunities to keep borrowers trapped in perpetual student loan dependency. 

XXXX. DEMANDS FOR IMMEDIATE CORRECTION I demand that MOHELA and the Department of Education : XXXX. Allow me to switch out of the SAVE Plan immediately and enroll in an Income-Based Repayment ( IBR ) plan that better aligns with my financial goals. 

XXXX. Correct the inaccurate reporting of my debt-to-income ratio to reflect an accurate repayment amount instead of the misleading {$0.00} structure. 

XXXX. Acknowledge their systemic mismanagement and commit to improving borrower flexibility instead of using repayment plans as financial traps. 

If they refuse to comply, I request that CFPB : Investigate MOHELA and the Department of Educations misuse of the SAVE Plan to artificially inflate borrowers debt-to-income ratios. 

Refer this case to the Federal Trade Commission ( FTC ) for further investigation into deceptive and unfair financial practices. 

Assist me in obtaining legal representation to hold MOHELA accountable for violating my financial rights and constitutional protections. 

CONCLUSION This is not just a credit reporting issuethis is a deliberate financial blockade designed to trap borrowers in economic servitude. MOHELAs refusal to allow me to select my repayment plan, provide a buyback amount ( so I can pay it back, per their website ) and their continued misrepresentation of my student loan obligations violate federal law, consumer protection statutes, and my constitutional rights. 

I request CFPB to hold MOHELA accountable and ensure borrowers have financial freedom instead of being locked into government-imposed financial instability.

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