Consumer complaint received 2025-11-16 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: CA

Complaint narrative:
Good Day - I am submitting this complaint because MOHELA, servicing my private Signature loan on behalf of XXXX, has improperly denied my School Misconduct Discharge request twice, even though the U.S. Department of Education has already discharged my federal loans due to documented systemic misconduct by XXXX  XXXX XXXX XXXX ( XXXX ). MOHELA/XXXX  is now claiming that I waited too long to report the misconduct, which is not a valid legal or ethical basis for continuing to collect on a loan tied to a fraudulent institution. 

Background I attended XXXX XXXX XXXX XXXX from approximately XXXX to XXXX. Before enrolling, I was told the school was accredited and that my earned credits would transfer to a XXXX XXXX XXXX XXXXXXXX or similar public institution. This was false. Years later, when I attempted to transfer my credits to XXXX XXXX XXXX XXXX XXXX ( XXXX ), I discovered that none of my XXXX credits transferred. These misrepresentations caused serious academic, financial, and career harm. 

The Department of Education has since found that The Art Institutes engaged in widespread, systemic misconduct, and as a result, my federal student loans totaling approximately {$45000.00} were discharged in full under Borrower Defense. I submitted my private loan misconduct discharge application to MOHELA with this federal discharge decision as evidence. 

What Happened MOHELA/XXXX  denied my School Misconduct Discharge request twice : First denial : cited vague codes such as insufficient evidence, time since events, and time since discovery. 

Second denial : repeated the same claims, including that I waited too long to report the issue, despite the fact that for-profit school fraud is often uncovered years later and the Department of Education itself acknowledged systemic misconduct only recently. 

This reasoning is improper, irrelevant, and contradicts federal findings. Time does not erase fraud, nor does it negate the harm caused by predatory schools.

Current Problem My forbearance is expiring again, and MOHELA has sent payment due notices even though my application is under dispute. If payments resume : - My credit will be harmed further. 

- My elderly aunt, who was required as a cosigner, will also be harmed. 

- I will be forced to pay on a loan tied directly to proven misconduct. 


Why I Need CFPB Intervention MOHELA/XXXX  is : - Dismissing federal findings of misconduct - Applying improper denial criteria- Punishing me for not recognizing fraud earlier, even though the school intentionally hid information - Restarting billing without resolving or fairly evaluating my claim - Ignoring the Department of Educations precedent that the school engaged in fraud This is unfair, deceptive, and abusive conduct, especially toward someone who has already been acknowledged as a victim of school misconduct by the federal government. 

What I Am Requesting : I am requesting that the CFPB : - Review MOHELA/XXXX  denial of my private Signature loan discharge ; - Require MOHELA to pause all billing and collections during the evaluation ; - Require a fair reevaluation of my discharge application based on the federal Borrower Defense findings ; - Require MOHELA/XXXX  to explain why they are applying time since discovery as a basis to deny a fraudrelated discharge ; and - Assist in securing full discharge of this private loan due to proven school misconduct. 

This situation is causing severe and ongoing harm. I have attached my federal discharge letter, both denial letters from MOHELA, copies of my application, and all supporting documents. 

Thank you for reviewing this matter.

Company response to consumer: Closed with explanation