Consumer complaint received 2026-02-20 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: PA

Complaint narrative:
I am filing a formal complaint against MOHELA, my federal student loan servicer, regarding repeated improper placement into non-qualifying forbearance, processing delays, misinformation, and lack of communication that have materially harmed my progress toward Public Service Loan Forgiveness ( PSLF ). 
I am approximately eight years into PSLF and have consistently met all program requirements. I have met every deadline required of me. However, MOHELA has repeatedly failed to properly process my applications and has placed me into incorrect forbearances that jeopardize qualifying payment credit. 

Timeline of Events XX/XX/XXXX I was placed into SAVE forbearance. I was advised that if I wanted to continue making progress toward PSLF, I should switch to a qualifying repayment plan. 

XX/XX/XXXX I applied to change to the PAYE plan and was approved in XX/XX/XXXX. Both XXXX and XX/XX/XXXX qualified for PSLF. 

XX/XX/XXXX XX/XX/XXXX Despite approval into PAYE, MOHELA placed me into an incorrect, non-qualifying forbearance from XXXX. 

The reasons provided were either : I was still on SAVE, or 60 days had passed since my application and it was still processing. 

Neither explanation was accurate. 

I immediately contacted MOHELA in XX/XX/XXXX requesting to be returned to repayment under PAYE. It took until XX/XX/XXXX after numerous phone calls and 34 escalated claims to be placed back into repayment. 

As a result, XXXX through XX/XX/XXXX were deemed non-qualifying months for PSLF. 

This error was not caused by me. 

I was not advised to continue making payments during the improper forbearance so that the months could later be retroactively credited. I was later told that if they retroactively placed me into repayment, the months would be delinquent due to nonpayment which is precisely why I should have been advised to make payments when I first called in XXXX. 

Escalation and Communication Failures After escalation, I was told I had been removed from non-qualifying forbearance on XX/XX/XXXX with backdated corrections. However, I was later informed that the system again placed me back into a non-qualifying forbearance for XXXX. 

I am had review from MOHELAs ombudsman. Once a claim is escalated, there is no communication or ability to check status. There are no callbacks to inform borrowers of resolution. Wait times are routinely 4+ hours, and resolution departments require 48-hour callback windows during which borrowers must remain available. 

I have now had to go through this process multiple times and am completely exhausted by the lack of accountability and transparency. 

Ultimately after 6 months of phone calls this specific issue was resolved and XXXX were placed in a forbearance that qualified for PSLF progress. 

Second Processing Failure Income Recertification ( XXXX ) I submitted income recertification to Federal Student Aid on XX/XX/XXXX with a due date of XX/XX/XXXX. 

MOHELA confirmed receipt on XX/XX/XXXX. 

On XX/XX/XXXX, I was notified of a processing delay and was not placed into processing forbearance. 

I made my regular payments for XX/XX/XXXX and XX/XX/XXXX. 

I was then notified my next payment would increase to over {$1700.00} because I did not recertify income, defaulting me to a 10-year standard payment amount. 

I contacted MOHELA and was placed into a 60-day processing forbearance ( XXXX ), which they stated would count toward PSLF. However, by XX/XX/XXXX, it will have been 105 days since submission of my recertification. 

If my application is not processed by that date, I believe I will again need to be placed into forbearance which does not protect PSLF credit. I firmly believe these extended months should count toward PSLF progress as again I have met every deadline. The delay is entirely on the servicer. 

Impact These repeated errors are not minor administrative issues. They directly affect my PSLF qualifying payment count and delay my eligibility for forgiveness.

PSLF buyback has been suggested as a solution ; however, there is a reported backlog of approximately 60,000 applications and wait times exceeding one year. It is not reasonable to require borrowers to use buyback to correct servicer errors. 

I have complied with all program requirements and have acted promptly each time an issue arose. MOHELAs repeated improper placement into non-qualifying forbearances, inaccurate explanations, processing delays, and lack of communication have materially harmed my progress and created unnecessary financial and emotional strain.

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