Consumer complaint received 2026-06-12 00:00:00
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: MOHELA
State: OR

Complaint narrative:
Subject : Complaint Regarding Final Denial of School Misconduct Discharge for XXXX XXXX XXXX Associated with XXXX XXXX XXXX XXXX XXXXXXXX I am submitting this complaint regarding the handling and final denial of my XXXX Misconduct Discharge application for private student loans originally issued by XXXX XXXX and XXXX serviced by MOHELA. This complaint concerns a final denial issued XX/XX/year>, after exhaustion of the appeal process and includes information that was not available at the time of my prior CFPB complaint. This complaint concerns a final denial issued on XX/XX/year>, following exhaustion of the available appeal process under XXXX XXXX XXXX XXXX program. Background I attended XXXX XXXX XXXX XXXX XXXXXXXX. The U.S. Department of Education later determined that XXXX XXXX XXXX engaged in widespread misconduct, including misrepresentations concerning employment outcomes, graduate success, and career prospects. As a result of those findings, my federal student loans associated with attendance at XXXX XXXX XXXX XXXX XXXXXXXX were XXXX. My XXXX XXXX XXXX were used to finance tuition, fees, and educational living expenses associated with attendance at the same institution. School Misconduct Discharge Application After learning that a School Misconduct Discharge program existed for certain private student loans, I submitted an application seeking relief. Throughout the application and appeal process, I provided extensive documentation and evidence regarding : The misconduct findings relating to XXXX XXXX XXXXXXXX. The impact of that misconduct on my educational and career outcomes. Evidence of financial harm. Evidence of career-related harm. Evidence connecting the misconduct to the harm I experienced. Evidence addressing the timing issues raised during the review process. I also submitted information addressing why my application could not reasonably have been filed earlier, including evidence that the XXXX Misconduct Discharge program was not available to borrowers for many years after the alleged misconduct occurred. Final Denial My application was ultimately denied under denial reason codes : 5 Insufficient evidence that alleged misconduct caused alleged harm. 6 Length of time since the alleged misconduct occurred. 7 Length of time since I became aware of the alleged misconduct. Following multiple appeals, I received a final denial dated XX/XX/year>. Concerns Regarding the Review Process My concern is not simply that my application was denied. My concern is that the review process lacked transparency and did not provide a meaningful explanation of the decision. Specifically : 1. The denial letter did not explain why the evidence I submitted was considered insufficient. 2. The denial letter did not identify what evidence was missing or what additional information would have been required. 3. The denial letter did not explain how the lender evaluated causation between the schools misconduct and the harm I experienced. 4. During a telephone conversation on XX/XX/year>, with XXXX XXXX of MOHELAs Customer Advocate Office regarding my appeal, I requested clarification concerning the standards used to evaluate whether the evidence submitted satisfied the causation requirement for School Misconduct Discharge. During that conversation, I was informed that the criteria used to evaluate causation were proprietary. 5. As a result, I was unable to determine what specific evidence was required, how my evidence was being evaluated, or what additional information would be necessary to satisfy the lenders requirements. 6. To my knowledge, I was never provided any written explanation identifying the specific deficiencies in my evidence or the standards used to evaluate causation. 7. The final denial relied in part on the passage of time despite the fact that the School Misconduct Discharge program was not available for many years after the alleged misconduct occurred. 8. The denial consisted primarily of generalized denial codes rather than an individualized explanation addressing the evidence submitted. Federal Findings The Department of Education determined that The Art Institutes engaged in widespread misconduct and XXXX my XXXX XXXX XXXX XXXX that basis. While I understand that federal discharge does not automatically require discharge of private loans, I believe it is reasonable to expect a transparent explanation when a private loan misconduct discharge application is denied despite federal findings regarding the same institution. I am attaching supporting documentation, including my federal discharge documentation, denial letter, denial code explanations, and supporting evidence previously submitted during the application and appeal process. My appeal packet specifically addressed denial codes 5, 6, and 7 and included exhibits addressing misconduct, causation, borrower harm, and timeliness. The final denial did not explain why those responses were rejected Additional Concern Regarding Responsibility for the Decision During my communications with MOHELA regarding the denial and appeal process, I was advised that MOHELAs role was limited because it services the loans and that the discharge determination was made by XXXX, as lender, or on behalf of the lender. I was encouraged to manage my expectations regarding MOHELAs ability to influence the outcome of the review. As a borrower, this created confusion regarding who was responsible for evaluating the evidence, applying the discharge criteria, responding to requests for clarification, and ultimately making the denial decision. Throughout the process, I was directed to MOHELA for servicing-related matters while being informed that the substantive discharge decision rested with XXXX. I respectfully request clarification regarding which entity was responsible for evaluating my evidence, applying the causation standards, and issuing the final determination, as well as which entity is accountable for responding to concerns regarding the fairness and transparency of the review process. Thank you for your review.

Company response to consumer: Closed with explanation