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Mohela, Mo Problems

Thanks again, Congress:

For-profit and nonprofit student loan companies alike lobbied over the change and shifted their business models accordingly. In particular, the nonprofit student loan companies won a carve-out to ensure they’d get in on the business of servicing the direct federal loans. The carve-out was crafted and lobbied for by the Education Finance Council, a trade group representing nonprofit student loan companies that spent more than $200,000 on lobbying that year. (The Education Finance Council did not respond to a request for comment.)

Now, two years later, borrowers are experiencing the effect of the law.

Borrower Karen Mahnk said she logged into the Department of Education’s student loan website in October and saw that her loan balance — which typically hovered around $100,000 — was suddenly zero. When she called around, her servicer told her that she had been put in an administrative forbearance.

If, like me, you went to college on a direct student loan from the US government; and recently your loan was mysteriously transferred to a company you’ve never heard of, you need to read this article on ProPublica: Student Loan Borrowers Dazed and Confused by Servicer Shuffle. My monthly payment went up when my payments were transferred to Mohela, and since I switched banks a few months ago they have been chronically unable to correctly process my “automated” monthly payments. If you’re having problems with Mohela, you’re not alone. If you haven’t had problems with them yet, brace yourself.

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17 thoughts on “Mohela, Mo Problems

  1. Mr. Thomas:
    My name is Ray Bayer and I am the Executive Director of MOHELA. My cell phone number is 314-568-8457. Please call me at your convenience. MOHELA takes great pride in offering excellent service and I regret that you have been inconvenienced. Please feel free to contact me anytime day or evening, including weekends. I will make sure we resolve your concerns promptly.
    Thank you.
    Ray Bayer

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    • Appreciate it. After a few failed attempts with secure message system uploading PDFs which were “empty” according to the representative on the other end of the line, I think I’ve managed to get my auto debit account set up. I’ll let you know if I have problems with it when it debits next month.

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    • Nope, unfortunately today I was informed that my request for auto-debit was “denied” because the form I uploaded was “blank.” Again, this is entirely incorrect — I am downloading PDFs from mohela.com, filling them out in Acrobat, and re-uploading them via your secure message system. This process is arcane. I am used to dealing with Direct Loans, where I could manage all of this entirely online.

      There is no part of this process that has not made me feel screwed over as a concession to the private student loan market, as a punishment for my wise decision to avoid your industry in the first place.

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  2. Heather Kanago says:

    I HATE MOHELA!!! What a NIGHTMARE they have made the past 6 months of my life! They are holding my account and credit score hostage at this point over $22.80 (or $22.47 or $47.20 depending on which screen the customer rep looks at) that they claim my new consolidated student loan provider has underpaid them…after 3 months insisting the new provider had not paid them at all only to find they/mohela had misapplied the paid funds into an UNAPPLIED ACCOUNT! What on earth is an unapplied account? Then they pretended like the consolidated payment had always been there…erasing payment history since the august 2012 consolidation payment and deleting nearly $1000 payments they had auto withdrawn from my bank account over the months when they insisted they had not received the consolidated payment. They also have no record of the OVERPAYMENT check they sent to my new provider in september 2012 for overpaying the same loan sequence they claim the new provider has underpaid. They wont allow me to pay the $22.80 just to get out of MOHELA and insist they cannot physically call my new provider to inquire about the underpayment but must rely on faxed correspondence in order to resolve the issue. Bottom line: AVOID MOHELA to begin with, and if not WATCH OUT if you try to consolidate away from them.

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  3. Sandra says:

    So frustrated at going from Direct Loans, where I could easily see payment history, and make updates to my autodebit amount at any time…to this very very old school system where everything is manual and not easily available.

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  4. Tanya Baetje says:

    I am also having an issue with a payment that was made in November, and my bank sent it to the old address. I contacted Mohela, and had a 3 way conversation with my bank, an agent from Mohela, and myself. I was told it could take up to 60 days to post. I waited the 60 days…nothing. I contacted them again and they said it could take over 60 days to post and to keep checking back. I checked back several times, then finally in February they put a payment inquiry in, and told me to check back. I checked back and was told they found my payment and it could take up to 30 days to post. Well, 30 days has gone by, and my payment still hasn’t posted. I got a hold of them again and they said the payment was posted to my account, so I checked my payment history, and of course, the payment has not been posted to my account. I emailed them again and have no response, so I filed a complaint with the BBB. This is ridiculous!!

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  5. Dee says:

    Dee Harris
    Because of a change in my work status, I called Mohela to get paperwork for an Income Based Repayment plan. I was told in order for your paper work to be processed quickly, you should fax the paperwork back. I did just that; faxed my paperwork. After five days I called to find out the status of the paperwork. I was told fax was never received even though I got a confirmation on my end that the fax went through just fine. I asked for a different fax number to try again. Same thing with new fax number, did not receive it, but yet I got another confirmation on my end that the fax went through. Is anyone else having problems with lost paperwork? or is this company conveniently losing paperwork that can help people lower their payments?

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    • It’s no better if you use their website. I tried to submit the forms as PDFs about 10 times before they correctly scheduled my automatic payments. But as they say, “never attribute to malice that which is adequately explained by stupidity.”

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  6. c obrien says:

    yes i agree.
    the website is archaic, unhelpful, and dont even bother calling them(neverending hold)
    I have been trying for over a month to pay-off the remaining balance on my loan, which for the original 20-24k i borrowed, ended up making 50-60k in payments.
    I could never get a response from them, and when a few months ago i told them i had a large amount of money and wanted to see if they could give me a deal, of course then they responded right away.
    I have tried to get a email copy, or paper copy of my bill, and now today, the day it is paid off(which still hasnt happened), i get an email with my bill.
    Mohela is the worst companies i have ever dealt with, and it upsets me when they manage so much money…..if their service and website is so bad, what is their personnel/staff like working there? Not a good thought at all.
    Hopefully my payment goes thru today…fingers crossed.

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  7. Stephanie says:

    Their customer service is terrible, I feel taken advantage of every single time I call. I am desperate to consolidate away from them. I despise this company so much.

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  8. March says:

    Yes, yes and yes! Today I took out a loan against my paid-off car to get out of Mohela. It sucks because the loan interest will no longer be deductible as “student loan” interest, but it is WORTH IT to escape Mohela. Now I just have to wait the 2 or 3 or 6 or 8 days for them to “process” it. Holding my breath…

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  9. Manna says:

    I’ve never had an issue with Mohela that wasn’t my own fault. It sounds like a lot of these issues could be due to the transfer (mine was originally through Mohela from the start). They were quick to help me when I was having difficulties making my payments and today I had a question about interest which they were quick to explain in an easy way to understand. I was hoping to find articles that were helpful about consolidating but I hadn’t considered the loss of the tax dedection so I think I’ll stick with Mohela until it’s paid off. :)

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  10. Shea says:

    My loans were consolidated when they were with Direct Loans and my loan transferred to Mohela some time ago. I was still making one payment so I didnt think to look. Well I’m trying to pay some more of it off and I looked up the balance and lo behold, I now have two loans! WTF? I had one loan, all this time my payment was being split between two loans?? So I’ve either got to consolidate within Mohela or try to consolidate out of the loan. It looks like my nightmare with Mohela is just beginning.

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  11. Cheryl Starrett says:

    This company is the absolute WORST that I have EVER dealt with. I so cannot wait for my settlement so I can cut these losers loose! I am sure they’ll find a way to lose my total payment so they can charge me more money. I’m seriously thinking of giving it to my congressman and having him walk it over there so they have no excuse. What a bunch of lying cheats!

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  12. Warren says:

    Writing my congressman. A straight, simple loan repayment should be calculated as a normal straight amortization schedule. Unfortunately, my wife’s loan has interest payments from month to month which spike for no explainable reason. I may be rusty from my MBA degree but, I know how to calculate and generate an amortization schedule. Unless I mis-understood calculation of present value/future value/discount rate … I’m pretty confident that over time … on a simple repayment of a loan WITH a default auto-debit amount … the monthly principal amount of the payment applied to the loan should increase month to month whereas the monthly interest amount applied to the loan should decrease. Not the case ever since my wife’s loan was switched to Mohela from Direct Loan Servicing. If this goes on any longer one could theorize Mohela will have a major legal headache. It’s simple math I would think.

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