Consumer complaint received 2024-09-27 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: MOHELA
State: LA

Complaint narrative:
On XX/XX/XXXX, I received an email ( copy attached ) from MOHELA notifying me that I my account was being placed in an Administrative Forbearance. As I understood, this was due to MOHELA transitioning to a new system. 

On XX/XX/XXXX, I received a letter from MOHELA ( copy attached ) that stated The deferment or forbearance to postpone payments on the loan ( XXXX ) listed below will end on XX/XX/XXXX. If you are on a deferment, outstanding unpaid interest that accrued may be added to the current principal balance ( capitalized ) at the end of the deferment. This letter did NOT state that interest would be capitalized due to forbearance it only referenced deferment, which I was not on. 

On XX/XX/XXXX, I received a second letter ( copy attached ) from MOHELA with a Repayment Scheduled Change. It showed a principal balance of {$120000.00} and accrued unpaid interest of {$21000.00}. It showed {$0.00} in capitalized interest. The schedule showed my next payment as being XX/XX/XXXX. It did not indicate nor had I received any other prior notice at that point of any past due payment ( XXXX ). 

On XX/XX/XXXX, I received a letter ( copy attached ) from MOHELA advising that my loans were transferred to the new system effective XX/XX/XXXX. It also stated : Our records indicate that your account was past due from XXXX days during the transfer process. MOHELA has applied a non-interest capping forbearance on your loan ( XXXX ) from the date of delinquency through XX/XX/XXXX. Payments will resume following this date. 

I was and at all times have been enrolled in AutoPay, so the last payment that came out of my checking account was on XX/XX/XXXX. None of the correspondence indicated to me that I could make any payment during the Administrative Forbearance. I assumed any payment needed would have been AutoPay applied either during or after the Administrative Forbearance that I was not given any choice in entering or an option to opt out of. 

On XX/XX/XXXX, I received a letter ( copy attached ) from MOHELA entitled Repayment Schedule Change, and it showed a capitalized interest amount of {$21000.00} that had been added to my principal amount. There was no explanation for this capitalization. In fact, the letter notes : Beginning XX/XX/XXXX, interest will no longer capitalize after certain account activities including when ending a forbearance, grace period, and certain income-driven repayment plans. The previous XX/XX/XXXX letter expressly referred to this administrative forbearance as a non-interest capping forbearance. 

When I was unable to find any explanation for this capitalization through my own research, I finally called MOHELA on XX/XX/XXXX. I was told that the capitalization was due to entering the latest forbearance due to the court injunction related to the XXXX plan. When I explained that I did not think that was the case as I received notice of that forbearance by letter dated XX/XX/XXXX ( copy attached ) and this capitalization happened on or about XX/XX/XXXX, the MOHELA representative disconnected the call. 

I then received an online message in my MOHELA account ( copy attached ) on XX/XX/XXXX in response to a written complaint I submitted through my account portal. This message advised : " Our records indicate that you have already called and spoken to XXXX of our Customer Service Representatives regarding this inquiry. We will assume the inquiry has been handled. '' But again, this was not " handled '' because I still have not been given any explanation for the capitalization of over $ XXXX in interest. 

On XX/XX/XXXX, I submitted a complaint to the Department of Educations Office of Federal Student Aid ( Case No. XXXX ). I have not received any response or resolution of same at the time of this submission to CFPB

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