Consumer complaint received 2024-10-04 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Problem with customer service
Company: MOHELA
State: WA

Complaint narrative:
I am writing to formally lodge a complaint against MOHELA regarding their failure to process my Income-Driven Repayment ( IDR ) application in a timely manner. My application for consolidation of my federal loans and for the IDR plan was submitted on XX/XX/XXXX. The consolidation was processed by XXXX within a few weeks and the loans disbursed to Mohela on XX/XX/XXXX in the amount of {$410000.00}. They placed me on a standard level 30 year repayment plan without communicating this to me. I never received any email, standard mail, or account message documentation about this decision. My IDR plan application remains unprocessed to this day, and I have never received any email, standard mail, or account messages about the processing of this application and why there is a delay. 

Due to MOHELAs delay, my application was not processed by XX/XX/XXXX, when the courts put a pause on the SAVE plan. As a result, I am now accruing interest on my student loan balance, which I would not have incurred had my application been processed in a reasonable fashion. The initial balance on the application was {$410000.00}. The balance as of XX/XX/XXXX at the time of this complaint is {$420000.00}. This interest accrual amounts to over {$2500.00} per month and is compounding on the balance, causing extreme financial hardship for my family and me. 

I have called and spoken to Mohela customer service several times, and during one call was specifically told that I should have been on the SAVE IDR plan by the time of the federal pause and should have been placed in the 0 % interest forbearance that all SAVE plan enrollees were placed in at the time of the pause. I specifically requested to be sent documentation of this, which was never done. In several further conversations with Mohela service representatives I have requested forbearance due to the financial hardship of the stand level repayment plan and they continue to fail to send me communication about these processes. I often have to call them again a few days later when I notice that the forbearance was not processed, which takes significant time out of my day when I am supposed to be working as a physician. 

Additionally, this delay is making it unclear whether the time while my application is being processed will count towards my Public Service Loan Forgiveness ( PSLF ) eligibility. This uncertainty further exacerbates our financial hardship. Recordings played over the phone while on hold for customer service with Mohela specifically reports a PSLF buy-back option for SAVE plan members who are currently in forbearance due to the federal court pause on the SAVE plan. This would have also been an option for me if Mohela had processed my IDR application in a timely manner, but they failed to do so. 

The delay in processing my IDR application is unacceptable and has placed an undue financial burden on us. I request that the CFPB investigate this matter and take appropriate action to ensure that MOHELA processes my application immediately and rectifies the financial damage caused by their delay. 

Thank you for your attention to this urgent matter.

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