Consumer complaint received 2026-03-03 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: NV

Complaint narrative:
XXXX XXXX XXXX XXXX XXXX XXXX, NV XXXX Date : XX/XX/XXXX To : Consumer Financial Protection Bureau Subject : NEW FORMAL COMPLAINT XXXX XXXX, XXXX, XXXX, and MOHELA Failure to Validate Debt, Unlawful Credit Reporting, and Violations of FDCPA/FCRA Complaint ID : XXXX Amount of Debt : {$250.00} Product : Federal Student Loan ( FFELP ) Company Response Received : MOHELA responded on behalf of itself and XXXX with a legally insufficient " validation '' consisting only of a Master Promissory Note and payment history, explicitly refusing to provide chain of title. COMPLAINT NARRATIVE I am filing this complaint against XXXX XXXX, LLC ( originator/owner ), XXXX ( interim servicer ), and MOHELA ( current servicer ) for their collective failure to validate my federal student loan debt, their continued reporting of unvalidated debt to credit bureaus, and their violations of the Fair Debt Collection Practices Act ( FDCPA ) and Fair Credit Reporting Act ( FCRA ). My loans are Federal Family Education Loan Program ( FFELP ) XXXX loans originally disbursed by XXXX XXXX in XX/XX/XXXX. I have an active Borrower Defense to Repayment application and have been confirmed by the Project on Predatory Student Lending ( PPSL ) as a " Sweet Post-Class Applicant '' in the XXXX XXXX XXXXXXXX class action litigation. Despite multiple requests spanning months, none of these entities have provided legally sufficient validation of this debt. MOHELA 's recent response ( attached ) confirms the systemic failures. SECTION 1 : MOHELA 'S RESPONSE IS LEGALLY INSUFFICIENT AND ADMITS CRITICAL FAILURES MOHELA 's response claims to have validated my debt by providing a Master Promissory Note ( MPN ) and payment history. This is legally insufficient for multiple reasons. A. The XXXX XXXX XXXX XXXX XXXX Precedent Establishes That MPNs Alone Are Not Validation The CFPB 's enforcement action against the XXXX XXXX XXXX XXXX XXXX directly addresses this situation. The CFPB alleged that the Trusts : " Sued consumers for debts the Trusts could not prove were owed '' Filed lawsuits although they " did not have or could not find the documentation necessary to prove either that they own the loans or that the consumer owed the debt '' The parallel to my case is exact. MOHELA and XXXX can not prove they own my loans or that I owe this specific debt. They have provided the original contract ( MPN ) but refuse to provide : Chain of title documentation Proof of assignment from XXXX XXXX to XXXX to any securitization trust The name of any trust holding my loans XXXX numbers for securitized tranches The CFPB 's action required the Trusts to " stop collecting on certain debts... where necessary documentation can not be located ''. The same standard must apply here. B. MOHELA 's Explicit Refusal to Provide Chain of Title Is an Admission MOHELA states : " Except as required by law, we do not provide the chain of title in the ordinary course of business, and we will not be providing it to you here. '' This statement is legally significant because : Chain of title IS required by law when a debt is disputed under 15 U.S.C. 1692g The XXXX XXXX XXXX case establishes that collecting without chain of title is unlawful Their refusal suggests the documentation either does not exist or would reveal defects C. " Based on Information Available '' Confirms Incomplete Reporting MOHELA admits they are reporting my debt to credit bureaus " based on the information available. '' This is not the same as having complete, accurate information. The CFPB has already determined that reporting based on incomplete documentation harms consumers. SECTION 2 : MOHELA 'S RESPONSE ADMITS XXXX OWNS THE LOANSDESTROYING NAVIENT 'S DEFLECTION MOHELA 's response states explicitly : " MOHELA currently services your two XXXX owned Federal Family Education Loan Program ( FFELP ) XXXX Loans. '' This admission is critical : Implication Significance Navient is the legal owner MOHELA admits XXXX has standing and can be sued directly XXXX 's " talk to MOHELA '' defense is false Navient can not hide behind a servicer when they own the debt XXXX is liable for validation failures As owner, XXXX is responsible for providing chain of title XXXX has repeatedly told me to " deal with MOHELA. '' MOHELA now confirms XXXX owns the loans. This circular deflection must stop. Furthermore, XXXX was banned from servicing federal student loans in XX/XX/XXXX as part of a {$120.00} million CFPB settlement. This settlement acknowledged XXXX 's pattern of " account mismanagement and inaccurate payment collections ''. The transfer to MOHELA was a direct result of this enforcement action, not an ordinary business decision. SECTION 3 : MOHELA 'S HISTORY OF SERVICING FAILURES MAKES THEIR RESPONSE SUSPECT Senator XXXX XXXX and XXXX other Senators sent a letter to XXXX in XX/XX/XXXX specifically warning about MOHELA 's unfitness to handle these loans. The letter stated that MOHELA is " ill suited to facilitate the cancellation of these loans '' and noted that during the return to repayment, " at least XXXX XXXX MOHELA borrowers were affected by servicing failures like backlogs, payment miscalculations, and late bills ''. The Senators further warned : " Given MOHELA 's failure to follow guidance on canceling predatory federal loans, it is hard to believe that it will behave any better in canceling similar private loans XXXX will transfer to them ''. The Project on Predatory Student Lending ( PPSL ) which represents Sweet class membersendorsed this letter, stating that XXXX 's loans " should be extinguished, not transferred ''. MOHELA 's response confirms these warnings were prescient. They are refusing to provide validation, ignoring my XXXX class status, and continuing to report unvalidated debt. SECTION 4 : THE DEBT HAS NEVER BEEN VALIDATED AND IS UNENFORCEABLE Under the FDCPA, 15 U.S.C. 1692g, when a consumer disputes a debt, the debt collector must obtain verification and mail it to the consumer. Courts have consistently held that verification requires proof that the debt collector has the legal right to enforce the debt. What has NOT been provided : Required Element Status Chain of title from origination to present Explicitly refused Proof of assignment from XXXX XXXX to XXXX Not provided Securitization documents ( trust name, Indenture Trustee ) Not provided XXXX numbers for any securitized tranches Not provided Verification that " D.O.G.E. '' data glitch errors were corrected Not addressed Acknowledgment of XXXX class status Ignored What HAS been provided : Master Promissory Note ( original contract from XXXX ) Payment history ( shows payment application, not ownership ) The XXXX XXXX XXXX case establishes that without proof of ownership, collection activity is unlawful. The XXXX XXXX held that securitization trusts are " covered persons '' subject to CFPB enforcement and can not avoid responsibility. SECTION 5 : MY XXXX CLASS STATUS MAKES REPORTING INAPPROPRIATE I have been confirmed by PPSL as a " XXXX Post-Class Applicant. '' My Borrower Defense application is part of a federal class action settlement with court-ordered deadlines. Post-class applicants ( those who applied between XX/XX/XXXX, and XX/XX/XXXX ) were required to receive decisions by XX/XX/XXXX. The court rejected the Department of Education 's attempt to extend this deadline. Legal significance : My loans are under active federal adjudication The Department of Education has acknowledged these loans may qualify for discharge Reporting this debt as " accurate '' during this review is premature and prejudicial MOHELA 's response completely ignores my Sweet status, despite my prior submissions documenting it. SECTION 6 : DAMAGES FROM YEARS OF CREDIT HARM The collective failures of XXXX, XXXX, and MOHELA have caused years of tangible harm : Harm Category Description Credit Scores Depressed scores due to reporting of unvalidated debt Housing Opportunities Difficulty securing rental housing Employment Potential adverse impact on job opportunities Interest Rates Higher rates on any credit obtained Emotional Distress Years of stress fighting unvalidated debt Time and Resources Countless hours spent on complaints and research The XXXX XXXX XXXX XXXX XXXX resulted in {$2.00} million in redress to harmed borrowers. A separate action against the Trusts and PHEAA required nearly {$3.00} million in redress and {$2.00} million in civil penalties. The same standards should apply here. RELIEF REQUESTED I respectfully request that the CFPB take the following actions : # Request 1 Investigate whether XXXX, XXXX, and MOHELA are collecting on debts they can not prove they own, in violation of the standards established in the XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Order Navient to provide full chain of title documentation, including all assignments from XXXX XXXX to XXXX to any securitization trusts 3 Order Navient to provide the name of any trust holding my loans, the XXXX XXXX, and XXXX numbers for any securitized tranches 4 Order all three entities to immediately cease all collection and credit reporting activities until full validation is provided 5 Order all three entities to delete all trade lines associated with this account from my credit reports if validation is not provided within 15 days 6 Order financial restitution for years of credit harm caused by reporting on unvalidated debt 7 Impose civil penalties for willful violations of the FDCPA and FCRA, consistent with the penalties imposed on the XXXX XXXX XXXX and PHEAA NOTICE OF INTENT TO PURSUE ARBITRATION AND LITIGATION As previously noticed, if this matter is not resolved through the CFPB, I will : Proceed with arbitration against XXXX under the arbitration clause in my promissory note. Case law establishes that XXXX 's arbitration clauses are enforceable and cover FCRA and FDCPA claims. File complaints with the FTC and Nevada Attorney General. Pursue a private right of action under the FDCPA and FCRA for damages, including emotional distress. The XXXX v. Educational Credit Management Corporation case demonstrates that borrowers can and do pursue claims against student loan entities for improper reporting and collection activities. SUPPORTING DOCUMENTATION ATTACHED CERTIFICATION I certify that the information in this complaint is true and correct to the best of my knowledge. Sincerely, XXXX XXXX Without Prejudice | UCC 1-308

Company response to consumer: Closed with explanation