Consumer complaint received 2024-12-20 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: IL

Complaint narrative:
I am one of many public servants seeking loan forgiveness through the PSLF program. My loans are currently held by MOHELA. Last year, MOHELA erroneously asked its borrowers to recertify their income for IDR prior to XX/XX/year>. This mistake ignored guidance from the Department of Education and misled many borrowers, including myself. Out of duress and confusion, I recertified my income earlier than necessary in XX/XX/year> which caused my student loan payment to significantly increase from {$22.00} to {$1000.00}. The Department of Education then sent out a notice that the deadline to recertify IDR plans had been pushed to XX/XX/year> and that, if you recertified early and your payment went up, " We will return you to your previous monthly payment amount until your new recertification deadline. '' Once I learned this information, I immediately contacted MOHELA on XX/XX/year>XXXX  and was placed into an administrative forbearance by MOHELA while they corrected the issue. I called again on XX/XX/year> to confirm that I was in forbearance due to this issue and to inquire if my payment had been corrected yet, which it had not. Unfortunately, I wrongly assumed that I would be in forbearance until the correction was made. My assumption was incorrect, and I was taken out of forbearance in XX/XX/year> and automatically charged the incorrect, higher student loan payment of {$1000.00} on XX/XX/year>. I called again on XX/XX/year> to request a refund for this accidental payment and to request another administrative forbearance while my payment was corrected and returned to the previous amount. On XX/XX/year>, I called to inquire the status of this refund which, at the time, was still processing. On XX/XX/year>, I called again to request forbearance as my student loan monthly payment had still not been returned to the previous monthly amount of {$22.00}. During this call, I was told my refund for overpayment was still processing. On XX/XX/year>, I called again to request forbearance as my student loan monthly payment had still not been returned to the previous monthly amount. During this call, I was told that my previous refund request for overpayment had been cancelled because according to their records " no payment had been made. '' This was an error. The agent was able to view my payment history and confirmed that there was indeed an overpayment of {$1000.00} made on XX/XX/year>. She reinstated my request for a refund, and I was told that my request had been escalated to a supervisor due to the error. On XX/XX/year>, I called and spoke to an agent to ensure I was in the correct forbearance as I had heard stories of borrowers being incorrectly placed into a hardship forbearance. The agent reassured me that I was in the correct " processing '' forbearance while MOHELA and the Department of Education worked to return me to my previous monthly payment amount. She also confirmed that my refund was still being processed. On XX/XX/year>, I called again to request forbearance as my student loan monthly payment had still not been returned to the previous monthly amount of {$22.00}. I was also told my refund request was still pending and that this refund can take up to 90 days after submission to be processed by the Department of Treasury. 

In summary, in XX/XX/year>, I was misled into recertifying my income too early by MOHELA which caused my payment to increase significantly. The Department of Education stated that anyone who recertified their income early would be returned to their previous monthly payment amount. I have since had to call every 2 months to be placed into a processing forbearance while I await being returned to my previous monthly payment. Due to my confusion about this forbearance and the delay of correcting this error by MOHELA and the Department of Education, I made one accidental overpayment of {$1000.00} in XX/XX/year> for which I requested a refund. I am still awaiting being returned to my previous monthly payment amount of {$22.00}, and I am still awaiting my refund of {$1000.00} as of today, XX/XX/year>. I have spent countless hours on the phone with MOHELA over the past 9 months trying to correct these issues but no progress has been made.

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