top of page

THE BORROWER COST

Borrowers bear the brunt of the choices made by MOHELA and its servicing failures. From its PSLF backlog, to hours-long call wait times, to improper PSLF denials and lost records, to its “call deflection” scheme, the company has harmed those who depend on it at every turn. In all, four in ten student loan borrowers serviced by MOHELA have experienced a servicing failure since loan payments resumed in September 2023 after a three-and-a-half year long pause on bills and interest charges.

Here are the stories of just a handful of the millions of borrowers harmed by MOHELA.

STATE:

California

ISSUE:

Improper PSLF denial & incorrect payment count

“Consolidated from FedLoan to MOHELA. Had 119 qualifying payments on one loan before consolidation. Should be eligible for PSLF forgiveness at this for all loans time based on new regulations. MOHELA has reviewed my PSLF information and has now determined none of my employers were eligible for PSLF even though all of them have been. MOHELA now states I have 0 qualifying payments made. Been on hold on the phone with them for hours multiple times without being able to speak with anyone to help. I see many other stories online similar to mine. Would like to support the efforts to ensure MOHELA is upholding their end of the PSLF promise as they are clearly, either willfully or negligently, making it more difficult than it should be to have student loans forgiven under the PSLF.”

STATE:

Illinois

ISSUE:

PSLF denial without explanation

“My loans were transferred to Mohela around Aug 2022 of this year. I qualify for the PSLF and finished my 10 years of service. They have refused to process my paperwork. They have not sent me any documentation in writing acknowledging my documents, they refuse to take my recent calls. I've been on hold today alone for almost 7-8 hours combined. I spoke with a representative earlier and he said my application was denied, but could not provide me with any explanation as to why they were denied. He stated everything looked fine, and the system did not state why it was denied. It just stated that it was denied. He was confused. I explained I have not received a letter, or email about my status. I've received nothing from Mohela, just a letter stating they are servicing my loans. However they are not properly processing my paperwork for the PSLF. They will be looking to collect payment on the loan illegally because of their failure to discharge loans that are dischargeable.” 

STATE:

Washington, D.C.

ISSUE:

Lost payment history

“I started repaying Federal student loans in 2001. In 2009, MOHELA took over my account from another service provider, which was outside of my control. Apparently they never imported any records of my payments between 2001-2008. I am on an income-based repayment program and required to submit a certain number of payments before my loans are forgiven. MOHELA lost 8 years of my repayment history. I've spent over a year trying to get account info. from them before they finally admitted they couldn't find my information. I then reached out to the Consumer Finance Protection Bureau but they couldn't help. I then reached out to the Federal Student Aid Information Center and it's been months and I haven't received a resolution to my inquiry about my payment history. I don't know where to go or who to turn to for help. I've been trying to get this information for over a year now.” 

STATE:

Missouri

ISSUE:

Failed to issue refund

“Requested a refund and was told by a MOHELA rep it would auto credit to my checking acct that was used for monthly auto payments. Should be 30- 60 days. Emailed MOHELA for status update. Did not reply for months and when they did they did not address the issue but used canned language "hope your issue has been resolved.'' Was told by MOHELA rep that MOHELA erred and sent the overpayment to [another loan servicer]. I did not have an account with [that servicer]. MOHELA would not resolve and said I would have to get the funds from [that servicer] I have not heard from MOHELA.”

STATE:

Missouri

ISSUE:

No refund and incorrect loan balance

“Mohela became the servicer for my loans at the end of XXXX… I had paid a substantial amount during covid, over XXXX dollars. After debt relief was announced I requested a refund. Still no refund, but my loan balance has returned to the original amount. Mohelas website provides XXXX information about the transactions/refund. I didn't request a refund for the full amount. I only requested a refund for a certain transaction made during that time. I've not received a check or a deposit.”

STATE:

Missouri

ISSUE:

Received incorrect information about PSLF from MOHELA

“I have a Parent Plus Loan in the amount of $125,000 for my daughter's education at Skidmore College. I work in a non-profit organization serving XXXXXXXXXXX Clients in a Halfway House for Men in XXXXXXX, NJ.  I am in my 60s and face paying this Parent Plus Loan until I'm in my 80s!  the interest it accrued while I had it in forbearance is astronomical amounting to $25,000 on a $100,000 loan! I have applied for Public Service Loan Forgiveness but have been informed I don't qualify because the loan was for my daughter's education not mine.  Needless to say, for the valuable work I do, I don't make a lot of money. Qualifying for PSLF would be life changing for me...I really don't want to work in my 80s!”

bottom of page