Consumer complaint received 2025-05-27 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: NY

Complaint narrative:
In XX/XX/XXXX, I was awarded a {$7400.00} loan for the fall semester of XXXX XXXXXXXX XXXX XXXX XXXX XXXX XXXXXXXX  in North Carolina. During this time, I worked full-time as a nurse in XXXX XXXX XXXX XXXX off the loan throughout the semester. As of XXXX, this loan had a remaining balance of {$450.00}. I submitted a form to XXXX XXXX  to reduce the financial aid I would have received for the XXXX XXXX semester. In this process, XXXXXXXX XXXX  inadvertently distributed an additional {$7400.00} loan to my account. I spoke to the head of financial aid at my university and was informed that this is a duplicate loan. It can take the Department of Education and federal student aid up to 90 days to recognize this and remove it from their system. 

Upon reviewing my financial aid for the XXXX XXXX  semester, I noticed that the original loan, distributed to me in XX/XX/XXXX with a remaining balance of {$450.00}, had been removed from my account. The loan that was accidentally distributed to me in XX/XX/XXXX, with a balance of {$7400.00}, remained on my account. This is displayed on my account, in addition to the {$7000.00} that I have already paid off. I will now be responsible for an additional {$7400.00} that I had never requested in the first place. 

I contacted the Department of Education, which advised me to reach out to MOHELA. If I did not receive a resolution from them, I was instructed to submit a complaint, as an investigation would need to be opened. When I spoke to MOHELA 's supervisor, they informed me that there's nothing they can do on their end because all it shows is that the original loan, dated XX/XX/XXXX, was canceled. I've spoken to XXXXXXXX XXXX which has also informed me that they can not take any action because they only distribute the financial aid to me. I submitted a claim to the Department of Education on XX/XX/XXXX, and was informed that it can take up to 90 business days to receive a response. A customer service representative told me not to make any payments towards this duplicate loan until I receive more information. At this point, I called both MOHELA and Federal Student Aid at least once a month from XXXX to XXXX to ensure that this was being followed, and I was endlessly assured it was being reviewed. I contacted Federal Student Aid on XX/XX/XXXX, more than 90 days after the original claim was submitted, and was just then notified that it was submitted to the wrong area. It can take an additional 15 business days for me to receive a response. I contacted them again on XX/XX/XXXX, and was told they are unsure why I was provided with timelines, as they can not give me a definite deadline for when I can expect to hear back. At this time, the best advice they could offer me was to call back once a month and check on the case 's progress. 

This loan is accruing interest at an 8 % rate, with a balance of {$7800.00} at this point, and I am almost 7 months into this without any resolution in sight. Since XXXX, I have been dealing with this and am being sent in circles. I have now graduated from my master 's program and will be expected to start making payments towards this mis-distributed loan in 6 months. I have bank statements that prove I made over {$8000.00} worth of payments to MOHELA from XX/XX/XXXX to XX/XX/XXXX. I have documents showing the remaining balance on the original loan that was distributed to me in XX/XX/XXXX, including billing statements from the university that depict refunds related to the federal loans. I am simply at a loss for what to do. 

Complaints have been submitted to the Department XXXX XXXX XXXX and Federal Student Aid at this point.

Company response to consumer: Closed with explanation