Anyone having problems with Mohela, it's taking MONTHS to update what we have paid to my D's loans

Paying for College FAFSA & CSS Profile
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In recent News there is a Lawsuit again Mohela the way they are handling/ have handled the Student loan forgiveness program… also if you look them up on the BBB, there are over 2,402 complaints in the last 3 yrs, and their ratings is a 1.08 out of 5 stars.

I paid over $1,000 on D’s Unsubsidized loan in Feb (2 months ago- online using Checking account), it’s still not updated, I paid her Unsubsidized off, but the website has it accuriing interst still… the Rep could not tell me why it wasn’t updated, she was baffled.

Then in addition to this, D got a Credit from her college, and stupidly, I suggested to put it back into her loans, so the College wrote out a form to MOHELA, sent the check in the mail , this was in Feb ((over 2 months ago)… Mohela can not even confirm if this was received . I sent a message to the College about this if they can help me find out if it was even received yet.

And their website shows ZERO history of payments. They did just change Websites, and in addition changed all the account numbers, this seems the worst time in the world to do this , with all the FAFSA changes right now.

Most of the complaints on the BBB is about Student Forgivness loans not being handled right, but I also seen those with our issue, taking months to update what we have Paid, calling and waiting on line for hours, keep getting the same run around, give it another 2 weeks, it “should” be updated by then, but no answers.

I want to hear if others are having these sort of issues with Mohela?

Thank you

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I read about similar problems on bankrate.

“ If you have questions for MOHELA and you haven’t found an answer to them online, you may need to reach out to the company directly. You can contact MOHELA via secure message on its contact page or by phone at 888-866-4352. International borrowers may call 636-532-0600. MOHELA’s customer service hours for Direct Loan, PSLF, and FFEL loan borrowers are 7 a.m. to 8 p.m. CT Mondays, 7 a.m. to 7 p.m. CT Tuesdays through Wednesdays and 7 a.m. to 5 p.m. CT on Fridays.

If you’d like to send correspondence, you can do so by writing MOHELA at 633 Spirit Drive, Chesterfield, Missouri, 63005.

How to file a dispute with MOHELA

The first step toward filing a dispute with MOHELA is contacting the servicer directly, using one of the methods listed in the section above. Be sure to keep detailed notes about when and how you reached out, with whom you spoke, and any details or specifics discussed in the conversation. If corresponding by mail or email, keep comprehensive records of your exchange.

If you are unable to settle matters with MOHELA directly, you may reach out to the U.S. Department of Education to submit a complaint. A step further, if your dispute or complaint is still not resolved, is to contact the Federal Student Aid Ombudsman Group for additional assistance.”

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Hmmm. I need to ask my DD to check who does her loan. She is making very large monthly payments, and won’t be happy if the are not being done!

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My older two had no problems with different servicers.

My D20 has Mohela and is planning her loan repayments. :crossed_fingers:will go smoothly.

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Thank you Hippobirdy for all those details… I did call them using the correct number, was on hold an hour + before getting through

I then emailed them after they said they would call back the next day, never did, it’s been 6 days now… No call, no email response. I then sent a letter , thankfully to the address you said in your reply… as when I was looking for an address, they had like 6 different addresses to confuse us all !

MOHELA really ought to make it more clear -if this is JUST A DELAY (hoping), to tell us this and have an explanation on their website in addition… what gets me is back in Feb I was told it would surely be updated & shown by April 1st… that $733 check sent to them… so I marked my calendar to check… it wasn’t true. So now I get another date, call back in mid May now - it “SHOULD” be updated by then. And when you call, it takes over an hour just to get through, then put on hold countless times taking to Supervisors who couldn’t give a clear answer either.

We’ll see. I advise everyone here to keep a close EYE on how their loans are being handled by them.

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Maybe let caseworker of your Senators or Representative know.

Senator Warren wants MOHELA CEO to testify.

https://www.msn.com/en-ae/money/careersandeducation/elizabeth-warren-says-millions-of-borrowers-deserve-answers-after-the-ceo-of-a-major-student-loan-company-turned-down-her-invitation-to-appear-before-congress/ar-BB1lgJzM

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Did you request the return of loan funds within 120 days of disbursement? If so, the college should not have sent a check in the mail to Mohela. Instead, they should have returned that portion of the loan to the federal loan processor. The servicer just services loans - if you want to cancel a loan or portion of a loan, it’s done directly through Direct Loans. When a loan is returned within 120 days of disbursement, it is treated as a cancellation. The funds are returned to the government, the origination fee and any accrued interest are canceled. While Mohela may take forever to update their records, there should be a confirmation of return of funds available from the school directly to Direct Loans (the government). Ask the school to provide you with this confirmation in case you need it (if Mohela doesn’t apply it to her account).

When loans moved from FFELP to Direct Loans in 2008, it took a long time for some servicers to update their records. Each time a servicer left the market and loans got transferred, there was a lag in updating records. It usually all caught up, but I did run across a few students whose records didn’t. I had to try to help, but I remember one case in particular that I couldn’t get anywhere with. This is your contact for assistance: Federal Student Aid.

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Honestly I don’t know when Disbursement was, we just look at her account every now & then and IF I see a balance in the “UNsubsidized” – I want to pay it off and get it to ZERO. We wanted the CREDIT check she got from her college to be applied to her loans, for all we knew, THAT check was going to HER COLLEGE (it gets very confusing where all these loans are , the school uses something called NELNET) but a form was used and sent to MOHELA. (for the $733 check). Who is the Federal Loan processor, not Mohela? too many entities/ 3rd parties to understand how all this works, for me. I didn’t go to College myself so I don’t understand all this, why I use these forums for help!

Below is the response I got from her College’s Financial Aid office…

…“Hello and thank you for reaching out. I just reviewed _____'s file and loans. We did make the update to the COD (Common Origination and Disbursement) site where schools make the updates to any loans, at the start of March. I can see on our end that the reconciliation file came in for the end of March showing the update on the loan. Our reconciliation file just came in today, for this loan, so it may be the same for the loan servicers, I am not sure the schedule on which they receive the information. My guess is it is just a timing thing with the reconciliation information COD sends out. I would check again at the end of this week to see if it is reflected on her Mohela account. I do not have access to the servicer’s information, I can just see when it was submitted on COD by us. If it is not there by the end of the week, please let me know and I can see what else we can do from our end.”

From this response, I can’t even say for sure if the $733 check was Received, how would you read this ?? Thank you.

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The response confirms that the school “canceled” the loan, sending it directly back to the government (Direct Loans). Save that email, just in case you need it down the road. But I agree with the school that it’s probably just a timing thing & it should show up in Mohela soon. The loan money was definitely returned to the federal government. You just need to watch to make sure her account is correctly updated to reflect that fact.

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Can someone confirm HOW LONG Mohela takes to UPDATE these loans ?

I just got another letter from them dated April 1, neither of these 2 payments have been applied/ updated. I saved the Confirmation payment when I paid the $1,007.37 towards her Unsubsidized, payment date was 2-22-2024 … I have a confirmation #.

WHEN should I be concerned and take action if this doesn’t update, show they were applied - its one thing the page is not updated but when calling them they can’t even confirm the check was received, nor WHY the $1,007.37 payment wasn’t applied. It’s very concerning.

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There is no way to know. If you feel that it’s been long enough & you aren’t getting answers from Mohela, contact the Federal Aid Ombudsman.

As an FYI: The payment is actually going to be different from the amount you returned. If you returned it within the 120 days, the amount returned would include the origination fee that was retained by Direct Loans when the loan was disbursed. If it was a subsidized loan, the amount returned should be $1,018.02 (or $1,018 if they round ). If it was unsubsidized, you should also see a slight reduction in interest owed (the interest that has accumulated on the portion returned is also canceled).

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So I called a 3rd time to Mohela, this Representative was more informative, and didn’t leave me hanging or saying It SHOULD update next week or she didn’t know why it wasn’t applied, like the last. She called it an “IPAC payment” (both of them , the $733 check and the $1,007.37 online payment) and due to the transferring , these will take UP TO 90 DAYS to post on the new Platform. So I guess everything is good, I just need to wait to see it deducted in another month.
Thank you all.

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Yes. I was originally with Wells Faro. They sold the loan to ACS. Then my loan went over to Navient. Now I am with Mohela. I was always on an income based repayment plan. However, I have also made payments over many years. NONE of these lenders have given me credit for any payments made. I borrowed under $50k and it has spiraled into close to $ 197k. Mohela has me starting all over again and paying for another 30 years, None of these students want anything for free, They just want what they signed up for. Also under the incom based repayment plan, these loan services are not supposed to capitalize the interest. Most of what I owe is interest. It is not right.

Edited by moderator to be in compliance with forum rules.

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@kelsmom any words of wisdom for this current poster?

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I’m sorry that this has happened to you.

First of all, it’s possible for you to have only paid interest depending on your loan balance and your payments. In addition, there actually are instances where interest capitalizes - for example, end of any period of deferment or forbearance, or if you don’t recertify income for income based repayment by the due date. Interest can accumulate like crazy.

I’m concerned by your statement that you can’t see any payments. Do you only see your loans plus the accumulated interest? Absolutely no record of any payments? If that is the case, I won’t dispute that - I’m just checking. I have seen some big mistakes when servicing was moved. Do you have, or can you get, records of your payments (either from your own records or from your bank)? You will want to get your documentation together. Then contact the Student Loan Ombudsman: Office of the Ombudsman FSA | Help Center. Please let us know what happens.

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Hi There,
I have recently run into this problem on an unsubsidized loan through Mohela as well. It’s been a month today. Did you ever get it worked out? I’m wondering how long I should go…or if I should run a stop payment with my bank and try all over again.
Thanks a million!

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Original poster here. Honestly it seemed to get worked out but geeze it took like 8 months or so. The way their website it set up , then them changing it all to new. It’s very difficult to even see what was paid.

I haven’t even went back to visit but it seemed the amount owed went down to the right amount after waiting like 8 months.

I should have taken the time to figure it out for sure but been terribly busy with other things and after all that time, you tend to forget the details.

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