Consumer complaint received 2024-04-26 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: PA

Complaint narrative:
MOHELA has been repeatedly placing my loans into forbearance without my consent and fraudulently concealing information about my loans. I have contacted MOHELA on multiple occasions to request that they stop placing my loans into forbearance without my permission, but MOHELA has repeatedly ignored my requests. Because of MOHELAs deceptive practice of ignoring my explicit refusals and denial of consent to enter into forbearance, my Auto Debit payments are not being processed as they should be, causing my loans to remain unpaid, and interest to improperly accrue. This appears to be a deceptive practice to ensure that my loans continue to accrue monthly interest and remain outstanding for the maximum duration, and it should not be tolerated. 

On XX/XX/XXXX, I received a letter from MOHELA, dated XX/XX/XXXX, indicating that my loans were switched over to the Saving on a Valuable Education ( SAVE ), income-driven repayment ( IDR ) repayment plan because that program replaced the Revised Pay As You Earn ( REPAYE ) IDR plan. The letter stated that my new monthly payment amount would be {$310.00}. However, the interest rates for my loans were not reported on either the letter or on the MOHELA website. The letter provided information about how I could complete the annual recertification, however, it did not state that I needed to take any action to switch to the standard repayment plan. 

On XX/XX/XXXX, I sent MOHELA a message through their website requesting information about the interest rates for my loans upon the expiration of the forbearance period, in order to ( a ) prepare for the lifting of the COVID-19 related forbearance/deferments of my loans ; ( b ) reconcile inconsistencies regarding the loan balances and payment histories reflected on the MOHELA website with my own records ; and ( c ) estimate my monthly payment under the standard repayment plan. MOHELA did not respond to that request. 

On XX/XX/XXXX, I again contacted MOHELA requesting information regarding the interest rates of my loans for when the COVID-19 forbearance period expired. MOHELA did not respond to that request. 

Prior to receiving any responses to my prior inquiries, on or about XX/XX/XXXX, I applied for an Auto Debit in order to, inter alia, ensure that my monthly student loan payments would be timely received as they come due. Specifically, I requested that my Auto Debit pay all monthly installment amounts on my loans on or about the XXXX of each month. It was my understanding that once approved the Auto Debit payments would begin in XX/XX/XXXX. 

On XX/XX/XXXX, I received a letter from MOHELA, dated XX/XX/XXXX, indicating that my Auto Debit would begin on XX/XX/XXXX. The monthly payment amount to be withdrawn was {$310.00} and an additional payment amount of {$50.00} would be withdrawn, for a total of {$360.00}. This letter did not indicate what, if any, repayment plan my loans were currently placed in. Changes to my Auto Debit account and amounts were subsequently processed or approved, none of which are relevant to this complaint. 

On XX/XX/XXXX, I received a message from MOHELA via the secure messaging system on the MOHELA website. However, the response from MOHELA failed to address any of my prior inquiries. In fact, the response provided no information whatsoever regarding my loans and instructed me to contact them by phone during regular business hours. It was entirely unclear which of my inquiries this message was intended to address. That same day, I submitted a complaint to MOHELA via the online messaging system on the MOHELA website, asserting that waiting over a month to receive a response to my inquiries and then failing to provide the requested information was unacceptable and infuriating. 

On XX/XX/XXXX, I received a letter from MOHELA, dated XX/XX/XXXX, indicating that my Auto Debit was scheduled to be withdrawn on XX/XX/XXXX, in the amount of {$310.00}. No information about my repayment plan was included in that message. 

On XX/XX/XXXX, I received a letter from MOHELA notifying me that my application for Auto Debit was approved and that my Auto Debit payments would begin on or after XX/XX/XXXX. The letter included a statement of account for XX/XX/XXXX, indicating a monthly payment of {$230.00}. 

On XX/XX/XXXX, I contacted MOHELA by phone to clarify the current Auto Debit amount and account. During that call, I reported that I had no intention of renewing my IDR plan and wanted to switch to the standard repayment plan whenever my IDR recertification expires. I was told at that time that I did not need to do anything to switch over to the standard repayment plan because my repayment plan would automatically change to the standard plan on or about XX/XX/XXXX and that my Auto Debit would automatically adjust to the new payment amount of {$510.00}. 

On XX/XX/XXXX, I received a letter from MOHELA, dated XX/XX/XXXX, confirming that my Auto Debit payment of {$510.00} was scheduled to be withdrawn from my bank account, on or about XX/XX/XXXX. No information regarding my repayment plan was enclosed with that letter. 

On XX/XX/XXXX, I received a letter from MOHELA, dated XX/XX/XXXX, indicating that my Auto Debit was approved and would begin remitting payments on or about XX/XX/XXXX. Enclosed with that letter was an invoice for {$230.00} and an indication that my loans were placed in the REPAYE plan. Since this letter was dated prior to the letters I received on XX/XX/XXXX, and was in contradiction to what I was told over the phone on XX/XX/XXXX, and what was included in the letter dated XX/XX/XXXX, I disregarded the information in the letter dated XX/XX/XXXX. 

On XX/XX/XXXX, I received two letters from MOHELA, dated XX/XX/XXXX. Both letters stated that an administrative forbearance was placed on my account because I was enrolled in an IDR plan. Further, the letters advised me that I could decline or request that the forbearance be removed. 

On XX/XX/XXXX, I contacted MOHELA by phone to ( 1 ) request that the administrative forbearance be immediately removed from my account ; ( 2 ) inform MOHELA that I have no intention of recertifying my income for an IDR plan because my current income level is above the eligibility requirements for any plans that I would consider applying for ; and ( 3 ) request that my loans remain on the standard repayment plan. Specifically, I was told that the forbearance would be removed before the next billing cycle but that my XXXX payment would not process as intended. At that time, I initiated a payment by phone for the standard repayment amount of {$510.00}. Additionally, I was assured that ( a ) I need not take any further action to have my repayment plan switch over to the standard repayment plan, because it would automatically switch because the recertification deadline had passed on XX/XX/XXXX ; and ( b ) that my Auto Debit would resume as planned beginning in XXXX. 

I have requested repeatedly to be placed on the standard repayment plan and to have my payments processed through Auto Debit. MOHELA has apparently refused this request repeatedly and unilaterally placed my loans into forbearance. So long as MOHELA refuses to permit me to ( 1 ) make payments on my loans through Auto Debit, which provides benefits of interest rate discounts and ensure prompt payment, and ( 2 ) switch my repayment plan to the standard plan, I am experiencing an undue burden and the victim of a deceptive practice aimed toward ensuring the maximum interest accrual and reduce the likelihood of timely repayment of my loan obligations. This deception MUST end.

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