Consumer complaint received 2026-04-13 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: AZ

Complaint narrative:
I am writing to formally rebut MOHELAs most recent explanation regarding the approximately {$27000.00} increase in my federal student loan balance during the XXXX XXXX administrative forbearance period. After XXXX months of continuous attempts to obtain a clear and accurate accounting, MOHELA has now provided an explanation that is not only unsupported by documentation but also inconsistent with the fundamental mechanics of federal student loan interest accrual and servicing practices. I. Core Issue This correspondence focuses exclusively on one issue : The unexplained addition of approximately {$27000.00} to my loan balance between XX/XX/XXXX and XX/XX/XXXX during a period in which my loans were subject to 0.0 % interest administrative forbearance under the XXXX XXXX. There were : No new loan disbursements, and No valid mechanism for interest accrual Under these conditions, the loan balance should have remained static, as it did during the XXXX administrative forbearance period. II. Summary of MOHELAs Explanation MOHELA now asserts that : Interest was incorrectly capitalized ( ~ {$25000.00} ) ; Their system calculates hypothetical interest and reduces it during 0 % periods ; Overlapping forbearance periods caused negative accrued interest ; This negative interest was later corrected, resulting in balance adjustments. III. Technical Rebuttal This explanation is not credible for the following reasons : 1. Negative Interest Can not Exist in Federal Student Loan Accounting Under federal loan servicing rules : Interest may accrue ( positive ), or Be waived/subsidized ( effectively zero ) It can not become negative. If an internal system over-applies an interest reduction, the correct outcome is : Interest = {$0.00} not the creation of a borrower liability. There is no statutory or regulatory authority permitting a servicer to : Generate a negative interest condition, and Retroactively charge the borrower to correct it 2. 0.0 % Interest Means No AccrualNot Reversible Accrual MOHELAs claim that their system : calculates interest that would have accrued and reduces it is inconsistent with how 0 % interest is applied. Under a valid 0.0 % interest forbearance : Interest does not accrue at all It is not : o Accrued and then reversed o Simulated and adjusted This distinction is critical. Their explanation reflects a hypothetical accounting construct, not actual loan behavior. 3. Overlapping Forbearance Periods Can not Generate Debt Even if administrative overlaps occurred : The maximum impact would be over-suppression of interest to zero It can not : Produce a deficit Justify a retroactive charge Generate a {$27000.00} balance increase 4. Timing of the Alleged Correction Is Not Credible MOHELA claims this issue resulted in : A capitalization event on XX/XX/XXXX However : The relevant forbearance periods occurred in XXXX The adjustment occurred nearly XXXX XXXX later This delay is inconsistent with legitimate servicing corrections and raises serious concerns regarding : Retroactive account reconstruction Post hoc justification of balance changes 5. Admission of Servicing Error Without Proper Remediation MOHELA explicitly states : interest was incorrectly capitalized This is an admission of a servicing error. However, instead of restoring the account to its correct pre-error state, MOHELA : Introduces an unverified negative interest correction mechanism Fails to reconcile the resulting balance This does not constitute remediationit represents replacement of one unsupported adjustment with another. 6. Absence of Required Supporting Documentation Despite repeated requests, MOHELA has failed to provide : A complete, itemized loan transaction history Daily interest accrual logs Any record showing a negative interest condition Calculation methodology supporting the {$27000.00} adjustment Audit logs or system-generated correction records Without this documentation, their explanation is non-verifiable and insufficient. IV. Formal Position Based on the above, MOHELAs explanation : Does not align with federal loan servicing principles Is unsupported by auditable financial records Fails to justify the {$27000.00} balance increase Accordingly, the balance adjustment remains formally disputed in full.

Company response to consumer: Closed with explanation