Consumer complaint received 2025-12-18 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: AP

Complaint narrative:
I have three federal Direct student loans owned by the U.S. Department of Education and serviced by MOHELA. All three loans are on an Income-Contingent Repayment ( ICR ) plan and have historically been paid through automatic payments. I am eligible for Public Service Loan Forgiveness ( PSLF ), which strongly incentivizes me to make on-time monthly payments, and I have consistently intended to do so. 

In early XXXX, I briefly returned to school. As a result, all three loans entered a non-repayment status during the school period, which is normal for federal student loans. After that school period ended, only one loan properly resumed repayment and billing. The other two loans did not resume billing for an extended period. During this time, MOHELAs website repeatedly showed no payment due for those two loans.

While those two loans showed no payment due, MOHELAs system did not allow me to make payments on them. There was no option to submit a manual payment for those loans, and automatic payments did not occur even though auto pay was enabled, because no bill or payment due was generated. I regularly checked my account and intended to continue making monthly payments, but I was unable to do so because MOHELAs system did not permit payment. 

On XX/XX/XXXX, I received my first notification regarding these two loans stating that loan default was upcoming due to missed payments. This was the first time any delinquency or past-due balance had appeared on my account for these loans. The notice listed a delinquent amount of {$1800.00}. I paid {$1800.00} on XX/XX/XXXX, the same day I received the notice, and contacted MOHELA in writing to explain that the account had shown no payment due and that I had been unable to make payments. 

On XX/XX/XXXX, I again received notice that a delinquent amount was due on the same two loans. The amount listed was {$2000.00}. I paid {$2000.00} on XX/XX/XXXX, immediately upon receiving that notice. Despite this payment, as of XX/XX/XXXX, MOHELAs website continued to reflect that I was approximately 11 months delinquent and continued to show the delinquent amount as past due, even though it had already been paid. 

After these events, MOHELA reported late payments related to this alleged delinquency to credit bureaus, which has negatively affected my credit. In addition, although I paid substantial amounts immediately upon notification and remained willing to make monthly payments throughout this period, the months in question are not being credited toward my federal Public Service Loan Forgiveness ( PSLF ) benefit. This is despite the fact that I was eligible for PSLF and intended to continue making qualifying payments but was unable to do so because MOHELAs system did not bill the loans or allow payment.

I believe the delinquency, credit reporting, and loss of PSLF credit are the result of servicing errors because MOHELA did not bill the two loans, showed no payment due, did not allow payments to be made through its system, and did not provide a reasonable opportunity to make monthly payments before issuing delinquency and default warnings. When I was finally notified, I paid the full amounts immediately.

Company response to consumer: Untimely response