Consumer complaint received 2025-05-02 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: NH

Complaint narrative:
Prior details about this ongoing struggle are detailed in a complaint I filed in XXXXXXXX XXXX XXXXXXXX. 

MY current issue is that none of the problems I was having ( as detailed in complaint XXXX below ) have been resolved. After filing the first complaint with the XXXX, I waited for Auto Pay to be activated on my account. It is not XX/XX/XXXX and Auto PAy was never activated. On XX/XX/XXXX I messaged MOHELA to ask them why Auto Pay was not activated, when it would be activated, and what is going on. They responded on XX/XX/XXXX by saying, " We apologize for any inconvenience. A review of the account reflects we were unable to process your Auto Pay application. Please note you may reapply at any time. '' I am at my wits end. I have already applied for Auto Pay twice, never received any confirmation that they received the request, approved the request, or denied the request. Nothing. I am losing out on the reduced interest and have to deal with risking late payments because MOHELA refuses to allow me to auto-debit my payments. This is pathetic and unacceptable for a financial institution. I was given no reason why my application for autopay could not be processed. This smells like a scam to me and a deliberate attempt to make borrowers mess up on their repayments. Who is holding these institutions accountable?? Please help. 


Previous complaint XXXX : My issue is with MOHELA. On XX/XX/XXXX, I sent MOHELA the following message : " Hello, I would like to enroll in Auto Pay and receive information about how to sign up for reduced interest rate with Auto Pay. Thank you. '' They responded to me with the following information : Subject : Auto Pay Received Date : XX/XX/XXXX Thank you for contacting MOHELA, Participation in the Auto Pay program will allow for your payment to be automatically withdrawn monthly and will qualify you for a 0.25 % interest rate reduction. This reduction remains in effect while you are actively participating in the Auto Pay program. If you choose to participate, your Auto Pay may be deactivated/suspended because you request to end your participation in Auto Pay, you request to change your bank information ( i.e. routing number or bank account number ), or you have been approved for a deferment or forbearance. The Auto Debit application is available to complete online. To apply, select Payments and Billing at the top of this page. Then, select Auto Pay followed by Add A Bank and then Enroll Now. If a bank is currently on the account, you will be asked to verify amounts to be withdrawn. You may add additional amounts to any loan sequence. The minimum monthly installment must be paid on each loan. Your request will be processed within 5-7 business days of receipt. '' I scheduled to start making payments in XX/XX/XXXX. In XXXX, I received a message from MOHELA that my payment was pastdue. I was confused since I had already set up auto debit. I went into my account and saw that no withdrawal was made. On XX/XX/XXXX, I sent MOHELA this message : " Hi, I signed up for AutoPay in XX/XX/XXXX. I elected to pay {$290.00} each month. I received the confirmation below that I signed up for autopay for that amount : " Today, XX/XX/XXXX, you authorized recurring Auto Pay amounts of {$290.00} that will be transferred on the XXXX of the month from bank account XXXX XXXXXXXX XXXX XXXX  {$71.00} is an additional payment above your Monthly Payment Amount. '' This week I also received a notification that my payment is past due. Nothing should be past due since I signed up for autopay. What is going on? All I want to do is sign up for autopay, XXXX of every month, take {$290.00} out of my account. '' On XX/XX/XXXX, MOHELA responded to me saying : " Thank you for contacting MOHELA, If you are approved for Auto Pay, a letter will be sent advising you of the first due date. It may take 1-2 billing cycles for your automatic payments to begin. Look for your start date on your approval letter and note that you may have to make 1-2 manual payments before your start date. '' In the nearly three months I have been trying to set up repayment and auto debit for my loans did anyone from MOHELA - whether on their website, or through my correspondence with them - tell me that I would XXXX  ) need to wait for an approval letter in the mail with instructions, or XXXX ) that I would need to make manual payments for 1-2 months. I never received any letter from MOHELA.

I assumed that the email stating that I authorized auto debit was a confirmation that auto debit would go through. I ended up making a manual payment on my loans to avoid any penalties or potential impact on my credit score ( might be too late for that ), thereby forfeiting the 0.25 % discount that comes with auto debit that I signed up for in XXXX. All I want to do is pay for my student loans on a monthly basis, on time. MOHELA is making that exceedingly difficult with bizarre rules, unclear and conflicting information that has resulted in missed payments, loss of discounts that I am eligible for, and a lot of wasted time going back and forth with a financial institution that clearly can not handle basic electronic transactions.

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