Consumer complaint received 2025-05-22 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: MA

Complaint narrative:
To Whom It May Concern, Subject : Formal Complaint Against MOHELA for Misapplied Payments, Loan Misrepresentation, and Unfair Credit Reporting I am submitting this formal complaint regarding the mishandling of my federal student loans by my loan servicer, MOHELA. 

I currently XXXX in the XXXX XXXX XXXX and have had payments submitted to MOHELA through the militarys student loan repayment program. These funds have been disbursed by the appropriate agency, yet MOHELA has failed to properly apply them to my loan account. Despite repeated outreach to their customer service, these payments remain unapplied or inaccurately allocated. 

Additionally, MOHELA has misrepresented the amount currently due and my total loan balance. The figures displayed in my account do not reflect the payments made or the accurate status of my loans. I have requested detailed payment histories and explanations but have not received a satisfactory or timely resolution. 

I believe my situation reflects broader patterns of misconduct that MOHELA has been recently investigated and sued for : - In XXXX XXXX MOHELA, the servicer was sued for failing to process Department of Education-ordered discharges and continuing to pursue payments from borrowers, misrepresenting balances and statuses. - A U.S. Senate investigation found MOHELA responsible for contributing to ne
arly 2 million credit reporting errors, harming the credit scores of thousands of borrowers due to negligent handling of loan transfers and poor communication. 
- In a lawsuit by the XXXX XXXX XXXX XXXX, MOHELA was accused of implementing deceptive practices including call avoidance schemes, overcharging, and failing to process paperwork, especially for those in public service loan forgiveness programs. 
- The Department of Education has already penalized MOHELA by withholding over {$7.00} XXXX in payments for failing to send timely billing statements to 2.5 million borrowers.

I am extremely concerned that MOHELA 's failure to correctly apply my military benefits and provide an accurate loan balance may be a continuation of these same patterns of misconduct. Their failure to provide transparency and resolve the issue not only threatens my financial well-being but also violates the trust placed in federal loan servicers to act in accordance with law and policy. Therefore, I am respectfully requesting that the Department of Education and the FSA Ombudsman Group : 1. Ensure
that all Army National Guard student loan repayment funds are immediately and accurately applied to my loan account.


2. Provide an accurate, itemized accounting of my loan payment history and current balance. 3. Investigate whether my case is part of a broader pattern of servicing failures. 4. Remove any negative credit reporting or financial penalties that may have resulted from MOHELAs errors. I am attaching available documentation to support my complaint and will gladly provide additional details if needed. I appreciate your prompt attention to this matter and request a full investigation and resolution.

Company response to consumer: Closed with explanation