Student Loan Sharks: Mohela is shady (but the CSR I talked to was really nice)

UPDATED AGAIN: See bottom for contact information from a reporter.

Read this:

Mohela took over my loan from the Department of Education and claimed it could change the terms?

This happened to me. Mohela bought my student loan, sent me a letter telling me that the terms on my loan had been modified, and then sent me letters telling me that my monthly payments were overdue — even though I had paid.

It turns out that changing the terms of your loan when it is sold is NOT LEGAL.

Here are the details:

I had only about $1000 left on my student loan and I got a flurry of paperwork in the mail (for a loan that I’d gone paperless on YEARS ago).

First, my loan was moved to Mohela.

Then, a note that “I didn’t need to do anything.”

Then, a note that the terms of my loan were recalculated. Which came in the mail while I was out of the country. And, based on the recalculation, I would be paying interest for the next TWO YEARS, instead of being done with my loan in April.

And then a notice that my loan payments were overdue. By two months. Like I said, prior to this paperwork nightmare, I would have had my loan completely paid off by April. I can’t believe my loan was sold so close to my final payment date.

I called Mohela this morning, and after working my way through a truly Kafka-esque phone maze, I got on the phone with a very nice person. Who started to ask me some questions that would require me to get MORE PAPERWORK…. And she diplomatically handled my “O M G NO” rant, and even laughed with me when I said that I was clearly fed up and please could you just help me stop the horrible flood of paperwork and bewildering notices from her company.

That took nearly 30 minutes to get to that point.

She was nice, funny and helped me out. We reset terms of the repayment back to what they were before, and I got off the phone happier. Although still pretty pissed I’d had to call them at all about this.

And then I did some searching about other people’s experiences with Mohela. I got out easy.

So, if you got some notices in the mail, and didn’t read them carefully – go dig those letters out and see if you got screwed. Because if you did, and you’re using direct deposit, you need to fix it NOW, as they have access to your bank account.

UGH.

This guy had the same experience as me.

UPDATE

I contacted Congressman Earl Blumenauer’s office and they emailed me back the next day. I then talked with one of his local reps who said that the case was very interesting, and that they would be contacting the Department of Education to see what is going on with Mohela. I told them that they didn’t need to get back to me — my issue is resolved for now.

I urge anyone who comes here because you’re having problems with your student loans to CONTACT YOUR REPRESENTATIVES. I also sent letters to Senators Wyden and Merkley.

UPDATE 2: A reporter contacted me and requested that folks who are having problems with Mohela get in touch. Her email is eduloanstories@gmail.com.

16 thoughts on Student Loan Sharks: Mohela is shady (but the CSR I talked to was really nice)

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  1. I’ve had similar problems with student loan companies — not Mohela, but ACS and a couple of others. I’ve set up auto-pay, it stopped, and suddenly I was getting nasty phone calls from some new company and bills for collection fees. And it does seem to happen when the end is in sight for a given loan. It seems like they want us to fail to ever finish paying. Which… of course they do.

  2. Selena –

    Thanks for the comments about our staff. We work very hard to make sure that we are providing the best service we possibly can to our customers. We look forward to working with you!

    As noted, the conversion (transfer of your loan account) process is very complicated and in the best of circumstances it can still be difficult. The situation you describe above has been identified and MOHELA is working diligently to ensure that the information we recieved from your prior servicer is loaded to the system correctly.

    As in your case, if anyone sees that the information we have does not match your expectations or if you have absolutely any questions, please contact MOHELA Customer Service at 888-866-4352 x4708. One of our agents will be able to work with you right away to ensure that your information has transferred properly.

    Thanks for your patience throughout this process and we look forward to serving you in the future.

    Will Shaffner, Director
    Business Development and Gov’t Relations
    MOHELA

    • Hey Will,

      I can see that your reply was carefully worded to apply only to my loan, and to seem as though your company hadn’t made illegal changes to the terms of many, many loans. I feel bad for you, if you’re not an executive, that you’re having to put your name on all of these posts that are out there.

      I think your CSRs are probably underpaid and overworked, like most CSRs in call centers are. So, of course I’m nice to them.

      I’m going to be sending this blog post and the research I’ve collected about Mohela’s practices to my Senator Wyden and Congressman Blumenauer, and see if your company can be investigated for fraud and illegally changing the terms of people’s loans.

      -selena

      • I just found out an hour ago (on the phone with Direct Loans) that my loan is now being serviced by Mohela, and that they apparently bought it sometime in Feb 2012. I have received no notification from either Direct Loans (DL) or Mohela that DL is no longer my loan servicer. The reason I contacted DL was because my statement shows that I missed my Feb 2012 payment.

        In speaking with the DL, the rep couldn’t clear up the issue with me. My payment cleared on 02/08//12, the DL statement was mailed on 02/21/12. She said, “oh, your loan was transferred so Mohela probably doesn’t have it on their account. But sorry, I can’t help you.” What? So the payment is floating? I said, “Transferred? To what company?” “Mohela, so you will have to deal with them.” Me, “Do you have contact information for them? Wouldn’t it have been better business practice to notify me in advance of the transfer?” Blah, blah, and so on.

        Now I am researching Mohela and finding all of these issues. What the hell? Who am I dealing with? Or should I say who will I be dealing with since Mohela has “convenently”? not contacted me to inform me of any payment due date changes, where to send the payment, etc.. I should have had paperwork mailed to me immediately upon Mohela obtaining my loan. This is extremely bad business.

        Selena, thank you for the tips on dealing with Mohela. It sounds as of I will need to use them.

  3. MOHELA has been clearly doing this to many people, including my husband. Changing the terms of a consolidation loan is not OK. My husband was under the 10 year standard repayment plan and had only 1 year left. When MOHELA took over, they increased the payments. My husband called, they said they would fix it, and yet he just received a form that forces him to agree to forbearance in order to get the original payments back. If we are aksing that the original loans terms be reinstituted, that is not forbearance. This is unacceptable. MOHELA is practicing fraudulently.

    • Kim -

      What state are you in? I contacted my congressman and his staff was very interested in the issue, and they are pursuing it with the Department of Education. I recommend sending a short letter via your representative’s website, and using whatever “I need help with a federal agency” or “Education” category on their website to get some help. I sent mine to both of my senators and my area’s representative.

      The state DAs office may also be of some help, but you probably can get a relatively quick reaction from a member of the House.

      Also, I’m happy to send you a copy of the letter that I wrote if that would help you.

      -selena

  4. I just got off the phone for the third time with Mohela, and once again was told a completely different story about my loans terms being changed. My payments are more a month and cannot get a legit reason why. My payoff day didn’t change and my interest rate didn’t change either….so why the extra 610 a year in payments?

    The CSR I spoke with was not very nice, and a little snappy about it….pretty much accusing me of not reading the paperwork they claimed to send me a month ago which I haven’t received.

    Utterly helpless feeling of having no control over your loans.

  5. About two months ago, I noticed that my next payment due date was not until 14 MAR 2015. I’ve been paying more than the minimum payment for a few years now and was basically almost done paying the loan off. Never once had the payment due date been projected into the future since I never requested that option. Then this last week I went to make another payment, and the myedaccount website showed a $0 balance even though I know I still had a few hundred dollars left to pay. In the payment source column under the my payments section, it just said “other”. I received no notification of this and just received a statement in the mail today, from Direct Loans, still showing the balance that I had assumed I owed. I had emailed DL and never got a response so I decided to call and the automated DL phone system told me that my loan was now serviced by MOHELA. I have not yet tried to get on the MOHELA website because it asks for ALL of your personal details relevant to your credit profile and, thus far, I do not trust this entity. This involuntary transition of my loan has been done with anything but integrity. Were they not going to inform me of the transfer in order to rack up interest and fees and then send me a letter two years later saying I owe them 15 times the original amount? Equally disturbing and questionable is this Will Shaffner who has posted slick/greasy replies on most of the blogs/posts that I’ve come across. Does a legitimate agency need to employ somebody to scour the internet for dissatisfied clients and console them on people’s personal blogs, etc. Hmmm…In a bigger picture, the value of our money largely depends on the integrity of the credit/debt system since this is how new money is generated within our economic system. If one cannot trust this system what do we have left? Monopoly money? Is not the unregulated and un-policed sale/trading of “financial instruments” one of the reasons our system is in the state it is in now? I say again; Hmmm…

  6. I’ve also recently had serious problems with Mohela. After being a (relatively) happy customer for over ten years, I’m now ready to make a BBB complaint and contact anyone else (congressmen, etc.) who need to be made aware of their dealings. It really seems like they can’t find their way out of a paper bag these days…

    My husband and I recently combined our finances (we had been using separate checking accounts and now only use his), so I went on the website and changed all of my payment accounts. The next month, my closed account was auto-debited. I contacted Mohela, who explained I needed to complete an “Auto Debit Change Form” found on their website. I did so in mid-December. I received a notice saying the first auto debit would be taken out in February, so I’d have to make January’s payment manually. (Honestly, I don’t know why it takes two months to change an account number…) Okay, no problem.

    In February we noticed the auto-debit didn’t go through on the 12th like it should, and we eventually got a notice from Mohela that our bank returned a message saying the account number provided didn’t exist. After no less than four 30-45 minute phonecalls to Mohela (and several to our bank) some blessed soul at Mohela finally discovered that our bank account number was entered incorrectly into Mohela’s system. She said it’d be fixed in a week, but we’d need to make our February payment manually so we’re not charged a late fee. Okay, fine. We made that payment.

    Yesterday I got another notification saying Mohela tried to do another auto-debit (the next payment isn’t due for a week?) and received the same “can’t find your account” message from the bank. I just called in again, and was told I needed to contact my bank. I explained that I’ve contacted Mohela no less than four times over the last three weeks about this issue, and the representative again said I had to contact my bank. I asked to speak with a supervisor. She transferred me, and I left a message for a Joseph Petree.

    I’m so frustrated because almost every person I spoke to doesn’t have the decency to dig just a little deeper to figure out what the actual issue is. We were told several times that someone would call us back, but it just never happened. I’m trying to pay my damn loan, people, and you’re not making it very easy for me. Just DO YOUR JOB so I can get back to doing mine! /rant

    It’s nice that Mr. Shaffner is on top of things and responded to this blog post. If only the rest of the organization worked that way…

  7. I have had the same problems. Upped my payment by $1,000 per month. They keep telling me the previous servicer made a mistake and that I should not have been offered “extended” repayment terms in the 1st place. They also will not let me stop the auto debit or change repayment schedule. CSR told me I was just SOL. Are they trying to make people default?

    • Definitely contact your representative or senator. Seriously!

      It took 1 day for my rep to get back to me and three days for my senator to get back to me.

      -selena

  8. Oh no, I just received my letter from MOHELA today, and my first inital reaction was “What is going on?” then thought it does not matter who is the servercing it and almost set up auto pay with MOHELA.

    Selen, what should I do? Should I still sign up and pay MOHELA? I just log on to my Edaccount, but technical difficulties at the moment so can’t try to delete my bank account info…or it is too late that MOHELA already has it? Isn’t that illegal for Direct Loan Servicing to provide my bank account to a third party? I am currently in California, please email me the letter that you sent to the congressman, I would like to contact them as well. Thanks!!

    Liwen

  9. Sorry, I meant senator. Also I forgot to mentioned that due date with direct loan servercing is on the 14th, and I just received a letter from MOHELA today the 12th…Okay, it is passed midnight, so it was yesterday that I received my letter from MOHELA. I am for sure going to be late for this payment, if they acquired my loan in Feb. 23m 2012, why did they just sent me the letter dated 03/08/12?!