Consumer complaint received 2024-12-29 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: PA

Complaint narrative:
First, my account has been improperly placed into a forbearance and/or deferment, when it should have been in the SAVE plan so that all months count toward my student loan forgiveness. I had originally been on the REPAYE and then switched to the SAVE repayment plan for the rest of my repayment period since it was first offered. When my loans were transferred to MOHELA, Mohela improperly removed my loans from SAVE and put them into a standard repayment plan - more than doubling my monthly payment amount. Prior to that, my loans were all on the SAVE plan. Accordingly, all of the loans should have been automatically moved onto the SAVE plan since they were originally on the REPAYE plan before. This was not done. Inexplicably, without my consent or request, MOHELA placed all of my loans onto the Standard/Level repayment plan. To fix these issues that MOHELA themselves caused, MOHELA placed me on administrative forbearance and/or deferment and told me to reapply for the SAVE plan that I had already been on prior to my loans being transferred to MOHELA. Their actions appear fraudulent. I never, ever asked to be placed on a standard or level repayment which is what MOHELA unilaterally did to my loans. MOHELA illegally capitalized my interest. MOHELA illegally charged me interest even after my account was placed onto the SAVE repayment plan. The SAVE plan is supposed to PREVENT the accrual of interest so long as all payments are made. As of the most recent injunction in XX/XX/year>, my monthly payment under the SAVE plan is supposed to be {$0.00} until the injunction is lifted. Instead of listing my payment as {$0.00} dollars, MOHELA still has my account listed as in forbearance and/or deferment, which is only after I was put on hold for 3 hours to argue a {$700.00} bill that MOHELA sent me in the mail. I need the account to be immediately placed into the SAVE plan. MOHELA coerced me into submitting a new IDR plan request under the false pretense that I needed to submit a new IDR application. In fact, there was no need to submit ANY new IDR applications. MOHELA was supposed to simply convert my REPAYE plan to the SAVE plan pursuant to the direction of the Biden administration. This was not done. Instead, MOHELA made me submit numerous applications each time I called in and then placed me on forbearance and deferment that set me back on my repayment schedule. Under the federal regulations, my IDR application, should have been the only IDR plan in effect on my account. As a result - All past due amounts ( and interest ) that has accrued on the account is the WRONG amount. MOHELA is willingly and openly committing fraud and taking advantage of financially vulnerable people. Action must be taken against the company as they are blatantly and knowingly defrauding Americans and misrepresenting the Department of Education and its values. There must be accountability for their crimes and American citizens like myself must be protected from predatory corporations like MOHELA.

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