Consumer complaint received 2024-11-25 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem with your payment plan
Company: MOHELA
State: GA

Complaint narrative:
I am filing this complaint with the CFPB regarding my federal student loan servicer, MOHELA. My complaint addresses two critical points : 1 ) MOHELA is lawfully able to process my application to enroll in the federal governments Saving on a Valuable Education ( SAVE ) Plan, yet they have failed to do so by the time allowed by law ( 60 days ) ; and 2 ) MOHELA must move my loans from processing forbearance ( where interest accrues ) to general forbearance ( where no interest accrues ) because it has taken MOHELA more than 60 days to process my SAVE application, yet they have refused to take this action in violation of the relevant federal guidelines.

I. MOHELAs Continued Ability to Process My SAVE Application : The federal student aid website unambiguously states : [ N ] o new enrollments are being accepted for the Pay As Your Earn ( PAYE ) or Income-Contingent Repayment ( ICR ) Plans, with two exceptions : Exception 1 - Borrowers who applied for the PAYE or ICR Plans before July 1, 2024, but havent had their applications processed yet will still be placed on the plan that they applied for, if approved for that plan. '' See " https : //studentaid.gov/manage-loans/repayment/plans/income-driven '', Eligibility.

I submitted my SAVE Plan application on XX/XX/2024. According to the Federal Student Aid website ( My Account ), my application was received by MOHELA on XX/XX/2024. Since my SAVE Plan application was submitted before the XX/XX/2024 cutoff established by the government due to the pending court case as to the legality of SAVE, my application unequivocally qualifies under the governments first exception quoted above. Therefore, I am still eligible for enrollment in the SAVE Plan, and MOHELA is legally allowed to process my application.

II. Failure to Move My Loans to General Forbearance After 60 Days : The more egregious issue, however, is MOHELAs outright violation of the forbearance guidelines laid out by the U.S. Department of Education : If servicers need time to process a borrowers IDR application, servicers will move the borrower into a processing forbearance for up to 60 days. Interest accrues during this short-term processing forbearance If the borrowers application is not processed within 60 days, the borrower will be moved into a general forbearance... Interest will not accrue in this general forbearance. See https : //studentaid.gov/announcements-events/save-court-actions, Student Loan Borrower Q & A, I want to enroll in the SAVE Plan or another income-driven repayment ( IDR ) plan or consolidate my loans. What do the recent court rulings mean for me?, Paragraph 6.

Once again, MOHELA received my SAVE Plan application on XX/XX/2024, and as of the date of this complaintXXXX XXXX XXXX 180 days have passed. MOHELAs failure to transfer my loans to general forbearance after the allowed-for 60 day processing period has resulted in unlawful interest accrual for 120 excess days. Despite repeated calls, MOHELA representatives continue to insist that they are powerless to do anything about this issue, contrary to both the federal policy on studentaid.gov and the assurances of Federal Student Aid representatives that it is the servicer, MOHELA, that is responsible for moving my loans to general forbearance.

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