Consumer complaint received 2025-05-31 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA
State: CA

Complaint narrative:
To Whom It May Concern : My name is XXXX XXXX, and I am a borrower of federal student loans currently managed by Mohela. My student loans are currently under SAVE forbearance. I am writing to you with a grievance related to Mohelas allowance of excess interest accruing on my loans even after I spoke to a Mohela customer service representative in an effort to resolve this matter. 

I. U.S. Department of Education Provisions - 1. As updated on XX/XX/XXXX, the Department of Education Updates on Saving on Valuable Education ( SAVE ) Plan provides the following : 1.a. Student Loan Borrower Q & A states, Under this general forbearance, you do not have to make your monthly payments on your student loans, interest is not accruing, and, time spend does not provide credit toward Public Service Loan Forgiveness ( PSLF ) or IDR.

1.b. How does forbearance affect me states, As described above, the Department has placed borrowers currently enrolled in SAVE ( previously known as REPAYE ) into a general forbearance because their servicers are not currently able to bill them at the amount required by a recent court order. Under this forbearance, which will last until servicer are able to send bills to borrowers at the appropriate monthly amount, interest will not accrue. Furthermore, time spent in this general forbearance will not provide PSLF or IDR credit.

2. As updated on XX/XX/XXXX, the IDR Plan Court Actions : Impact on Borrowerss, provides the following : Student Loan Borrower Q & A I am enrolled in the SAVE Plan. What does the courts injunction mean for me? states, You are in a general forbearance unless you obtained a different status ( for example, deferment ), because your loan servicer is not currently able to bill you at an amount required by the court injunction. You will be in this forbearance until servicers are able to accurately calculate monthly payment amounts or the court reaches a decision on the availability of the SAVE Plan. This timeline will give borrowers the opportunity to make another choice for repayment, based on which of the updated options is best for them. Borrowers will be informed of any further changes to this litigation-related forbearance. Under this general forbearance, you do not have to make monthly payments on your student loans, interest is not accruing, and time spent does not provide credit toward Public Service Loan Forgiveness ( PSLF ) or IDR.

It is clear from the above provisions that while my loans are under the SAVE forbearance, no interest shall accrue on my balance.

II. Timeline 1.On XX/XX/XXXX, I received a letter from Mohela notifying me that my student loans are in forbearance. In this letter, Mohela reported, While you are in this forbearance no payment is required on your account and your interest rate will be set to 0 %. This means no interest will accrue while you are in the forbearance..

2.On XX/XX/XXXX, I received a letter from Mohela notifying me that on XX/XX/XXXX, a federal court issued a stay preventing the U.S. Department of Education ( ED ) from operating the Saving on a Valuable Education ( SAVE ) repayment plan. In this letter Mohela reported, While you are in this forbearance no payment is required on your account and your interest rate will be set to 0 %. This means no interest will accrue while you are in the forbearance.

III. Excess Interest Accrual Grievance 1. Mohela has failed to eliminate excess interest during this SAVE forbearance, and ( 2 ) failed to properly apply my loan payments to my loan principal amount.

1.a. I made payments to my balance on XX/XX/XXXX of {$510.00} ; XX/XX/XXXX of {$500.00} ; and XX/XX/XXXX of {$500.00} ( second payment on same day ). 
2. To date, Mohela has allowed interest to continue accruing during the SAVE forbearance. 


IV. Remediation Efforts On XX/XX/XXXX, I called the Mohela customer service telephone number. At XXXXXXXX XXXX PST ( same day ), I spoke with Mohela representative, XXXX XXXXXXXX. During this call, I reported that ( 1 ) my balance reflects excess interest on my balance while I am on administrative forbearance, which is in contradiction to the provisions under XXXX, and ( 2 ) that my previous payments were not applied to the principal of my loan balance. 

However, XXXX XXXXXXXX asserted that there is no interest on my loans. I reported that if she reviews the information that is clearly reflected on my balance, there is accrued interest. She maintained that there is no interest and, from there, our phone call ended.

Company response to consumer: Closed with explanation