Consumer complaint received 2025-04-02 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: CA

Complaint narrative:
This formal complaint addresses severe administrative negligence and legal violations by the Missouri Higher Education Loan Authority ( MOHELA ) and the U.S. Department of Education concerning the Public Service Loan Forgiveness ( PSLF ) and Income-Driven Repayment ( IDR ) programs, a serious DOGE-related data breach exposing sensitive borrower information, and violations of the Family Educational Rights and Privacy Act ( FERPA ).

Part 1 : PSLF and IDR Forced Forbearance and Mismanagement As confirmed on MOHELAs official website ( retrieved XX/XX/XXXX, from mohela.studentaid.gov ), pending IDR applications " can not be processed '' and borrowersincluding myselfare forcibly placed into forbearance under the SAVE plan until at least XX/XX/XXXX. Critically, this involuntary forbearance explicitly does not accrue PSLF credit, unjustly penalizing compliant borrowers. I have diligently made PSLF-qualifying payments for over eight years, totaling more than 96 months toward the required 120-month threshold. 

On XX/XX/XXXX, I timely submitted my IDR recertification and PSLF form. Both documents remain " In Review '' for 180 days as of XX/XX/XXXX. MOHELAs inability to process these documents resulted directly in involuntary forbearance and halted my PSLF progress through no fault of my own. This mismanagement has caused me substantial financial harm and prolonged my repayment unnecessarily. 

Further Concern Regarding Extended IDR Recertification Timelines : XXXX stated policy ( retrieved XX/XX/XXXX, from mohela.studentaid.gov ) that " Recertification of IDR plans will not be required until at least XX/XX/XXXX '' further compounds the harm already inflicted. This arbitrary extension deprives diligent borrowers, including myself, of the ability to appropriately certify and document their income-driven repayment status and secure rightful PSLF credit. Rather than providing relief, such an extended delay introduces unnecessary uncertainty and complexity, prolonging the financial burden on borrowers who have consistently complied with all program requirements. It is unjust and unreasonable to force compliant borrowers to endure additional years of financial uncertainty due to systemic administrative mismanagement. 

These actions clearly violate : Higher Education Act of 1965 ( 20 U.S.C. 1087e ( m ) ) : The PSLF statute mandates loan forgiveness after 120 qualifying payments made under eligible employment. MOHELAs arbitrary placement into non-qualifying forbearance contradicts statutory intent and unlawfully denies me timely forgiveness, causing prolonged financial hardship and stress. 
Fair Debt Collection Practices Act ( 15 U.S.C. 1692e ( 2 ) ( A ) ) : MOHELAs forced forbearance misrepresents the legal status and obligations of my loans, falsely indicating that I am ineligible for qualifying payments, thereby harming my financial standing and delaying my rightful loan forgiveness.

Administrative Procedure Act ( 5 U.S.C. 706 ( 2 ) ( A ) ) : The indefinite administrative hold on IDR and PSLF applications by MOHELA and the Department of Education is arbitrary, capricious, and contrary to federal law. This unjustified delay actively deprives me of my legally entitled PSLF credits, negatively impacting my financial security and career planning. 
Consumer Financial Protection Act ( 12 U.S.C. 5531 ) : MOHELAs handling of IDR and PSLF constitutes unfair, deceptive, and abusive practices. Their claim that " no action is required '' despite causing significant financial and emotional harm demonstrates deceptive and abusive servicing tactics.

Additional Evidence of Bad Faith and Administrative Negligence : On XX/XX/XXXX, at approximately XXXX XXXX XXXX, I contacted MOHELA by phone and was informed that the estimated wait time to speak with a representative was 2 hours and 45 minutes, an unreasonable expectation considering my full-time, 9-hour weekday work schedule. Such extensive wait times obstruct my ability to resolve critical financial matters promptly, further exacerbating my financial and emotional distress.

Furthermore, MOHELA representatives have repeatedly cited ongoing court proceedings as justification for processing delays. These administrative or judicial disputes should never penalize borrowers who have diligently fulfilled all program obligations. Imposing the consequences of external legal issues onto compliant borrowers like myself exacerbates financial stress and unjustly prolongs my repayment period.

Part 2 : DOGE-Related Data Breach and Insufficient Response Further compounding these issues, MOHELA recently experienced a significant data breach involving DOGE-related activities, compromising my personal and financial information. Upon reporting the breach and expressing urgent concern about identity theft and financial fraud, MOHELA instructed me to wait approximately 90 days for resolution. This delayed response is unacceptable given the immediate risk posed by identity theft. 

Due to MOHELAs inadequate response, I proactively purchased identity theft protection services, locked my credit accounts, and remain actively vigilant in monitoring my financial informationactions undertaken at significant personal expense and inconvenience. 

These failures represent clear violations of : Gramm-Leach-Bliley Act ( 15 U.S.C. 68016809 ) : MOHELA failed in its statutory obligation to protect sensitive consumer information, directly causing ongoing personal financial costs and heightened risk of identity theft.

Federal Trade Commission Act ( 15 U.S.C. 45 ( a ) ) : The delay and inadequacy of MOHELAs response constitute unfair and deceptive practices, impeding my ability to timely and effectively mitigate identity theft risks. 

Part 3 : Violations of the Family Educational Rights and Privacy Act ( FERPA ) MOHELAs security breach also violates FERPA ( 20 U.S.C. 1232g ), explicitly requiring robust protection of student and borrower records. The unauthorized exposure of my personal and financial data severely compromises my privacy and financial security, representing a failure of MOHELAs federally mandated responsibilities. 

The Resulting Harm : These cumulative failures and violations have caused : Indefinite delays in loan forgiveness and financial planning disruption. 
Unwarranted interest accrual and increased debt burden. 
Out-of-pocket expenses for identity protection services. 
Heightened risk and ongoing anxiety regarding identity theft. 
Severe emotional distress and professional disruption.

Company response to consumer: Closed with explanation