Things have gotten so bad that the federal government took the unprecedented step of withholding payments to MOHELA.

The Department of Education recognizing the issue, and taking steps to fix things is a step forward. However, it is too little too late for the many borrowers who are overwhelmed and frustrated.

In light of these challenging circumstances, borrowers should consider taking additional measures to safeguard their interests and avoid unnecessary spending.

Call MOHELA First Thing in the Morning

Contacting MOHELA’s customer service first thing in the morning, when representatives are just starting their shift, may prove advantageous.

At the beginning of the day, customer service agents are less likely to be fatigued or frustrated, increasing the likelihood of receiving more focused and helpful assistance. Furthermore, calling during the early hours may result in shorter hold times, allowing borrowers to address their concerns more efficiently.

Borrowers with Direct Loans or federally-held FFEL loans should call MOHELA at (888)866-4352. The call center opens for business at 7 AM Eastern, Monday through Friday. Weekend hours are not offered.

Keep Detailed Records of Everything

Maintaining meticulous records of interactions with MOHELA is crucial for borrowers navigating the current mess. Taking thorough notes during phone conversations is a prudent practice, capturing key details such as the date, time, names of representatives spoken to, and a summary of the discussion. These notes can serve as valuable reference points in case of future discrepancies.

In addition to documenting phone conversations, borrowers should make copies of all documents submitted to MOHELA. This includes any forms or applications, such as an IDR application or PSLF employer certification. Creating a comprehensive file of these documents provides proof of a borrower’s actions if things go missing in the future.

The devil is often in the details, and the more comprehensive these records are, the better.

Email MOHELA When Possible

Many borrowers need to have a discussion, or they need an instant answer. For these borrowers, calls are often unavoidable.

Additionally, MOHELA’s track record of responding to email communications at this time is spotty.

However, when possible, an email is preferable. Going this route ensures that borrowers have proof of exactly what they were told.

MOHELA doesn’t make it easy to send an email, but it is possible.

On MOHELA’s Contact Us page, there are a couple of dropdown menus in the middle column. Borrowers must pick a state and a topic. For some topics, the option to send a secure message appears in the third column.

Sherpa Tip: Be creative about the topic that you select.

“Repayment Options” doesn’t allow users to send a secure message, but “Payments or Bills” allows it. Likewise, if you select “Forgiveness and Discharge Options” a secure message is unavailable, but there is one for “Public Service Loan Forgiveness.”

The Value of Detailed Records of MOHELA Communications

Maintaining detailed records becomes especially crucial when correcting mistakes made by loan servicers like MOHELA.

The Department of Education recently declared that borrowers will be charged 0% interest and receive credit toward programs such as Public Service Loan Forgiveness and income-driven repayment forgiveness when errors are identified. However, without clear documentation, proving the existence of a mistake becomes challenging, potentially hindering borrowers from obtaining the benefits they are entitled to.

In cases where discrepancies arise, having meticulous records of interactions, submitted documents, and any written communication becomes a powerful tool. These records prove the borrower’s efforts and can significantly streamline the resolution process.

Without any proof, things become much more difficult.

Consider Filing a Complaint with the Consumer Financial Protection Bureau

Filing a complaint with the Consumer Financial Protection Bureau (CFPB) serves as a powerful tool for borrowers to protect themselves from servicer mistakes. CFPB complaints carry significant weight, as both servicers like MOHELA and the Department of Education take them seriously. This formalized process ensures that borrowers’ concerns are thoroughly examined, providing an additional layer of accountability.

One notable advantage of submitting a complaint to the CFPB is the potential for immediate relief. Typically, CFPB complaints trigger a review of the borrower’s account by the loan servicer, which can prompt a correction.

Additionally, the cumulative impact of individual complaints also makes a big difference. These complaints help the Department of Education identify major issues and can lead to policy changes.

In short, by filing a CFPB complaint, you help yourself and other borrowers.

Doing Your Homework is Critical

At a time when loan servicers, including MOHELA, are prone to making mistakes, it becomes essential for borrowers to protect themselves.

Before calling MOHELA, borrowers should research the questions or concerns they have. Utilizing online resources and tools, such as estimating payments on SAVE, can provide valuable insights. This proactive approach makes it much easier to identify servicer mistakes if they happen.

Finally, when you are given information, verifying things is always a good idea.

Final Tip: Kindness Matters

Borrowers have every reason to be upset with MOHELA.

However, yelling at the customer service representatives won’t help. It will probably make things worse.

The human being on the other end of the phone isn’t out to get you and isn’t trying to make your life difficult. Many customer service representatives are underpaid, undertrained, and deal with abuse from both their bosses and borrowers. They too, are victims of a broken system.

If you try collaborating with the person you are talking to, the outcome will usually be much better.

The post How to Protect Yourself from MOHELA Mistakes as Restart Gets Ugly appeared first on The Student Loan Sherpa.

Predictably, hold times at Mohela, Nelnet, and other services have been long. Many borrowers are reporting waits of multiple hours.

The big disappointment has been the mistakes and bad guidance that some borrowers have received. The Department of Education makes it clear that borrowers shouldn’t have to pay for help to manage their student loans, but the companies tasked with helping borrowers haven’t done their job.

What went wrong?

Can it be fixed?

And who is to blame?

Mohela, Nelnet, Aidvantage, and Edfinancial All Deserve Some Blame

In the winter of 2020, the servicer trade organization warned that they would receive more calls in the first month of repayment than what they normally receive in a year.

Making matters worse, these companies all cut staff during the pandemic.

However, they had plenty of notice on the restart date. Even though the date had been a moving target, this time around, there was legislation spelling out when the restart would happen.

To help servicers, the Department of Education started charging interest an entire month before payments were due. This move should have spread out demand for assistance over the course of a couple of months.

Sadly, servicers were still not ready. Long hold times are a clear sign that staffing levels are too low. The processing mistakes and inaccurate guidance indicate that the staff wasn’t properly trained.

Congress Dropped the Ball

Our student loan system is frustratingly complicated at times. Between Perkins Loans, FFEL Loans, Parent PLUS Loans, Spousal Loans, and Direct Loans, we have a long list of loan types, each with different eligibility rules.

Further complicating things is the long list of repayment plans. Each new repayment plan has helped make things more affordable for borrowers, but each weighs down the system. More options mean more complications.

Congress could create one repayment plan and make all loans eligible. Congress could automate the entire process. Congress could offer debt relief. Instead, Congress hasn’t made any comprehensive reforms in years, and borrowers are stuck in this mess.

The Department of Education’s Big Mistake

Over the past few years, the Department of Education has made numerous efforts to help borrowers and correct past issues. For example, the Limited Waiver on PSLF was created to help borrowers who received inaccurate guidance about the Public Service Loan Forgiveness Program.

Unfortunately, the Department of Education repeatedly makes the same fundamental servicer error.

Contracts with loan servicers specify minimum standards of performance. There is almost no incentive for Mohela, Nelnet, or Aidvantage to innovate or improve things. The less money they spend meeting that minimum standard, the more profit they generate.

A Simple Fix to Servicing Nightmares

There should be more servicers to choose from, and borrowers should be able to pick their servicers.

Currently, borrowers are assigned to a servicer and have almost no control over who services their loans.

If borrowers could move to a different servicer, servicers would have an incentive to keep hold times low and to be helpful. Servicers would have to compete to keep borrowers on their books. Servicers would have an incentive to innovate and to provide excellent service.

This change wouldn’t be very expensive, but it could dramatically change the quality of service that borrowers receive.

Two Parties Who Don’t Deserve Any Blame: Borrowers and Customer Service Representatives

I’m intentionally putting borrowers and low-level servicer employees in the same bucket.

Both groups are victims of the same broken system.

From the borrower’s perspective, the hours-long hold times are a recipe for anger and frustration. By the time they talk to an actual human being, they get rushed and, at times, get inaccurate information. It becomes a challenge to keep your composure.

From the customer service representative’s perspective, things are likewise ugly. All day long, you are tasked with helping angry and frustrated borrowers. They ask questions you haven’t been trained to answer and blame you for things you have no control over. Worse yet, it never stops. There is one angry caller after another.

In many ways, we have been pitted against each other.

My advice to both groups is simple. Your anger and frustration are justified, but please direct it to the parties who actually deserve the blame.

The post Who is to Blame for the Servicing Mess at Mohela, Nelnet, and Others? appeared first on The Student Loan Sherpa.

One common source of confusion for borrowers is that Mohela services both federal and private student loans. For example, Mohela prominently displays information about loan forgiveness and income-driven repayment plans. However, it’s important to note that these options are exclusively available to those with federal loans.

Fortunately for borrowers, identifying whether your loans with Mohela are federal or private is straightforward. Additionally, there are resources available to assist in the repayment of both types of loans.

How do I know if my Mohela loans are federal?

The Department of Education keeps detailed records on all federal student loans.

Borrowers can access these records at studentaid.gov. If your Mohela loans are listed, they are federal. If the loans do not appear, they are private.

A phone call to Mohela can also clarify any confusion about loan status. The Mohela contact information is available here.

Digging Deeper: If your loans are more than ten years old, you may have federal loans that are privately or commercially held.

Loans that are federal but not federally held, such as some FFELP loans, may have limited repayment and forgiveness options.

Repayment Options and Forgiveness for Mohela Federal Loans

If you have federal student loans, the rules and options for the loan are the same, regardless of who services the loans.

Mohela should assist borrowers in determining program eligibility and enrollment. However, borrowers are ultimately responsible for decisions made. If a borrower makes a mistake because the loan servicer provided bad advice or inaccurate information, there usually isn’t a remedy for the borrower.

The following guides may be helpful for borrowers trying to figure out what to do with their federal loans:

Sherpa Tip: Think of Mohela as a helpful resource instead of the final authority on student loan questions.

In many cases, loan servicers are an excellent source of information. However, many borrowers may regret not double-checking the information they receive.

Options and Strategy for Mohela Private Loans

Private loans managed by Mohela don’t follow a standard set of rules.

The specific terms and conditions of your private loan are outlined in your original student loan agreement. Mohela’s job is to collect payments and answer questions about the loan.

If you’re facing difficulties with your private loan, reaching out to Mohela could lead to possibilities like loan modification or hardship assistance. While assistance from lenders isn’t always a sure thing, many are open to receiving some payment rather than none at all.

For those seeking to lower their monthly payments or reduce interest rates, refinancing private loans might be a viable solution. This option typically requires a good credit score and stable income, though having a qualified cosigner can also be beneficial.

Contacting Mohela Customer Service

Borrowers have several options for contacting Mohela.

By Phone:

888.866.4352 (Toll Free)
636.532.0600 (International)

By Mail:

MOHELA
633 Spirit Drive
Chesterfield, MO 63005-1243

Finally, borrowers can receive assistance by sending a secure message through the Mohela website.

The post Are Mohela Loans Federal or Private? appeared first on The Student Loan Sherpa.