Consumer complaint received 2025-03-21 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Need information about your loan balance or loan terms
Company: MOHELA
State: CA

Complaint narrative:
Mohela is my loan service provider. I received the email below from the Department of Education. The Department of Education informed me that Mohela is aware that my loans have been discharged. Mohela alleges they have not been informed. It takes 3+ hours on the phone to speak with a Mohela representative. Mohela is intentionally or negligently refusing to process my Borrower Defense Discharge.

XX/XX/XXXX Borrower Defense Application # : XXXX XXXX XXXX XXXX XXXX : XXXX XXXX Dear XXXX XXXX : You are receiving this letter because you are a member of the class of Federal student loan borrowers covered by the recent settlement of the XXXX XXXX XXXXXXXX ( XXXX  ) lawsuit. You submitted a Borrower Defense to Repayment discharge application relating to your Federal student loan ( s ) on or before XX/XX/XXXX. The Department of Education, applying a special review process agreed to in the XXXX settlement agreement, has approved your claim for settlement relief. For more information on the terms of the settlement agreement please see the Departments website at Studentaid.govXXXX 

The Department has determined that you are entitled to settlement relief for the loans taken out on or after XX/XX/XXXX associated with your enrollment at XXXX XXXX ( Relevant Federal Student Loan ( s ) ) based on your allegations regarding the schools misconduct. Pursuant to the XXXX settlement, the Department of Education will do the following : discharge your Relevant Federal Student Loan ( s ) ; provide a refund for any payments made to the Department of Education on your Relevant Federal Student Loans including Relevant Federal Student Loan debt that you previously paid off ; and delete the credit report tradeline associated with the discharged loan ( s ). 
The benefits described in this communication apply to your Relevant Federal Student Loan ( s ). The benefits do not apply to private loans. Discharging your Relevant Federal Student Loan ( s ) means that you will no longer owe the debt. You also may receive a refund for prior payments made to the Department on your discharged Relevant Federal Student Loan ( s ) related to XXXX XXXX. Your loan servicer will let you know if you are eligible for a payment refund, which would be mailed to you. Please check your online account with your loan servicer to ensure your address is correct so you can receive any refund. 

Other than confirming your address, you do not have to take any further action to receive your discharge. Your servicer will send you more details about the discharge, including which loans have been forgiven. Your Relevant Federal Student Loan debt will remain in forbearance and collections will be stopped until you receive relief. Your credit report will also be updated to reflect this discharge when it is complete. 

If you have any additional questions, you may contact the Borrower Defense hotline at XXXX. You may visit StudentAid.gov/XXXX  for our hours of operation. 

Sincerely, U.S. Department of Education Federal Student Aid

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