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Under a new servicer my student loan has been horribly mismanaged. I'm really at a loss as to how to fix the mess which continually gets worse :(

This is a loan which has been in perfect standing for over 10 years and I had random thoughts of paying it off but never did because it is the only trade line on my credit report other than a credit card.

With no notice it turns out that the servicer changed in Mar of last year. They still took all of the regular payments out until in Aug no payment was removed from my account. I also received what 99.9999% would consider spam email from a company stating they were my loan servicer requesting personal information. Of course it was ignored.

Due to really bad experiences with 1-800 customer service personnel lying and hearing difficulties I sent a letter informing them of their breach of contract. The DOE and I have a contract in place for the payments to be taken out electronically. One of the loans was started back up again in Sept but continues to be "late" because they never took out the Aug payment. The second loan they are refusing to follow the contract. The money is there, waiting for them to follow the contract.

The letter I received back from the new servicer ignored my request for an email contact and gave very confusing information as to why they've stopped taking the payment electronically. Taking it for one and not the other shows they are clearly ignoring the contract in place. The same contract was filled out for both loans.

The electronic payment contract provides an extra .25% discount for my loan so I believe that if I make a check payment I'll be the one in breach of contract and lose my .25% discount.

About 2 weeks ago I contacted the DOE Ombudsman but I have been disappointed so far. My initial contact was limited to 2000 words, took over a week for a weak response which ignored the fact that I stated had more facts to provide. It's been almost a week since my second email to them.

Has anyone had any success working through the DOE Ombudsman program?
Should I get a lawyer to help me through this? It isn't that much money, I have it to pay. It's the damage to what little credit I have which is the problem.

Sorry this is so long, hopefully those here will be able to help me resolve this.
dhiana
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No. of Recommendations: 2
You may want to contact your Congress's. those staffers love this stuff.

Fuskie
Who expects all this is being handled by third parties rather than the DOE, but you never know what a call from a senator or comgressman's office can do...
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No. of Recommendations: 7
Before I bought a house, I only had 2 credit cards and a student loan on my credit card, since I'd paid off my car loan about 9 years ago - and my credit score was still in the low 800's. So if you have a low score, it's not because you don't have enough credit, if you've had timely payments for 10 years on a student loan.

If you've got the money and it's not that much - pay it off. No longer having an installment student loan certainly isn't going to ding your credit score greater than a company mismanaging electronic payments has the potential for. You can't control who services your student loan - so if they've already shown you they suck, why think it will get better? Pay if off and be done with them.
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Sadly I have no idea what my credit scores are. The last time I requested the reporting agencies send my reports and scores about 8 or 9 years ago it was a major battle in which I gave up after about 6 months. Their responses where basically requesting more information to prove I was at that address and I would send it then they would send another letter for more info and then they started sending letters they already had sent and received a response to, etc, etc and in the end I rec'd 2 of the 3 reports but one has never, ever sent one to me. I have proof of deliver of each letter to this day.
I know I'm legally entitled to receive this information but it is all such an exhausting battle.

Even though I have no need to borrow money I know the credit scores are used in other stupid ways such as insurance pricing. This is where I'm concerned that having these late marks on my credit report because of the servicer's error and NOT because I was late.

This makes me so frustrated. Is it really better to just pay it off and not get the black marks removed from my credit report?
I feel like then Mohela, the servicing company has won and will then just continue to prey on the next person and the next.

Going to a congressperson would be a last resort, something I hadn't thought about doing. Living overseas makes that all a bit difficult.
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No. of Recommendations: 2
If you want to get a reasonable feel for your credit score, go to http://creditkarma.com. It's free, safe and Clark Howard approved. Your reports you can get for free from http://www.annualcreditreport.com. Hopefully the system now won't be as aggravating. If they are, that's another thing to take to the Congressman - failure of the CRAs to follow the law.

You are absolutely correct that your credit history can impact your insurance rates, even your ability to get a job in some cases. If you have made each of your monthly payments, you shouldn't have to pay them twice. And if you were never provided information on the switch and where to send new payments, you should not be responsible.

But sometimes, you have to fight for your rights in a financial society that doesn't see people, only accounts. And going to your Congressman should be as simple as emailing their office, the address of which can be found on their web site.

Fuskie
Who notes if you have a mark on your credit report from this creditor, you have the right to challenge it...
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No. of Recommendations: 8
I had random thoughts of paying it off but never did because it is the only trade line on my credit report other than a credit card.

A paid off tradeline will stay on your credit report for 10 years after the payoff if there are no derogatory marks, and for 7 years if there are derogatory marks.

With no notice it turns out that the servicer changed in Mar of last year. They still took all of the regular payments out until in Aug no payment was removed from my account. I also received what 99.9999% would consider spam email from a company stating they were my loan servicer requesting personal information. Of course it was ignored.

Unfortunately, by ignoring that e-mail, you may have breached the contract yourself. However, it looks like you are not alone in having issues..... http://www.propublica.org/article/student-loan-borrowers-daz...

The switch, which has been going on for months and will ultimately include millions of loans, is mandated by a little-known provision tucked into the 2010 healthcare overhaul. Pushed by a consortium of nonprofit student loan companies, the provision forces the DOE to use nonprofit loan servicers. But at least in the short run, the switch has caused problems.
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Ultimately, borrowers having their loans moved over to these new servicers have Congress to thank for it. Coupled with the passage of the health care reconciliation bill was an overhaul of federal student lending, which shifted the government away from backing loans by private lenders — what were known as federally guaranteed student loans — and toward loaning directly to students.


Given that Congress created the problem, I agree that Fuskie's suggestion of having them help solve it might be a good idea. Or here's the name of someone at Mohela that you can contact:

"Anytime you change a servicing relationship, it can cause concern,” said Will Shaffner, Mohela's director of business development and government relations. "They need to pick up the phone and call us. If they're not satisfied with our service or aren't getting answers, they should ask to speak with a supervisor. They can even get in touch with our CEO if they need to.”

Address a registered letter with verification of receipt or an overnight delivery with delivery signature (i.e. proof of delivery) to him.

AJ
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No. of Recommendations: 3
I second MetroChick. If you've got the ability, just pay it off. If they are not applying payments correctly, and are reporting you as delinquent, this loan is hurting your score, not helping it.
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Yes AJ! I am one of those stuck in the Student Loan/Mohela mess that was prompted by the health care reconciliation bill. So I'm not alone in this mess.

My first step was to send a letter to the CEO and I still have the green postcard proof of delivery. The response was less than stellar. My request for an email in which to communicate was completely ignored and the letter wasn't even signed by a human being. There was absolutely no name anywhere on the letter! I didn't expect a personal response from the CEO but I did expect some professionalism.

The letter to the CEO was my response to the suspicious email I was originally sent. The personal information requested was my address. I've had the same address for 9 years and DOE already had that information and has had it for years.

But there is sort of good news. At least it had me laughing. One of the late notice emails I rec'd this week actually had an email address on it so I could just hit reply and reach a human being. No other email sent had an option to reply other than a po box and a 1-800 number.

I hit reply and stated my case as briefly as possible. The guy said he couldn't look up my account by name and said to call the 1-800 number. Seriously? HE emailed me!
About an hour later he sent another reply stating that 'there appear to be more moving parts to this...' and please contact my office.
You can't access my account by my name nor email that you sent me yet you suddenly realize there are 'more moving parts' Oh, and emailing you IS contacting your office. LOL!!

At least this mess is starting to return some entertainment value.

This is clearly a mismanagement issue on Mohela's part so I want to continue to pursue it and ensure my credit report accurately reflects my actions and not the mistakes of creditors.
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No. of Recommendations: 1
Thank you Fuskie for your support and information :)

I'm so glad to see they've greatly improved the annualcreditreport website. The first couple of years it was active we couldn't access it due to being stationed overseas.

It looks like we can now access it from our FPO location and it's on the top of my list to get our reports!

Thank You!
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My first step was to send a letter to the CEO and I still have the green postcard proof of delivery. The response was less than stellar. My request for an email in which to communicate was completely ignored and the letter wasn't even signed by a human being. There was absolutely no name anywhere on the letter! I didn't expect a personal response from the CEO but I did expect some professionalism.

I have found that sending a letter to someone at a lower level than the CEO often gets a better response than sending directly to the CEO. After all, it's usually pretty easy to find out who the CEO of a particular company is. If you go to the effort to find the name and title of someone who is less easy to find out about than the CEO, but who still has a title that should have some pull, it shows the company that you are putting time into getting this resolved, and will continue to do so, so they better get it fixed. Plus, the lower level people probably have a bit more time to deal with things like annoyed customers. If you can also copy someone else, like the FTC, the CFPB, the Dept of Education, a Congressperson, an attorney general, or your own attorney, you will also often get a better response.

AJ
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Here's another option for you:

http://www.clarkhoward.com/s/cac/

Clark Howard founded and funds a Consumer Action Center of dedicated advocates to service the overflow of concerns beyond what he can address on his decades long nationally syndicated radio show.

Also, I used Get Human to find a phone # that reaches a human. Can't say it's a human who can help with anything, but it's not an email.

http://gethuman.com/phone-number/MOHELA/

Fuskie
Who notes that Googling Mohela reveals tons of complaints and if you read through the links, maybe some suggestions for solutions...
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No. of Recommendations: 2
Ultimately, borrowers having their loans moved over to these new servicers have Congress to thank for it.

Interesting. So, a very good reason to call your congressperson! It's their fault and they should hear about it.
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No. of Recommendations: 1
Can't you make a one time electronic payment for the missed month?

I would also suggest checking the terms of the .25% rate discount. I know these things change from time to time, but my Stafford loans had that as well but the discount became permanent after making a certain number of electronic payments (it was not a long period of time).
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No. of Recommendations: 6
The Next Chapter - Received the written line by line accounting of what Mohela has done since March 2012 with my Student Loan which was consolidated with the Dept of Education almost 10 years ago.

My consolidated loan is subdivided into 4 different loans labeled Sequence One, Sequence Two, etc. This wasn't a problem for 9 years and each sequence received a bit of the single payment as per Standard Repayment Plan with the DOE.

Mohela decided to "Resequence" my loans. So they have chosen to Electronically withdraw the amount due for Loan Sequence Three and Four but completely stopped for Loan Sequence One.
Loan Seq Two's required payment withdrawal amount was stopped in November.
What a mess.
The only information I could find regarding financial resequenceing is about banks resequenceing checks to maximize insufficient fund fees.
http://smallbiztrends.com/2012/03/checking-account-big-bank-...

This resequenceing of my DOE consolidated loan really shows how far this scummy servicer will go to maximize interest payments and fees.

I had less than a year to go to pay off my loan at the contracted Standard Payment Plan. The DoE website specifically states, "Monthly payments..a fixed amount of at least $50 each month and made for up to 10 years."
http://studentaid.ed.gov/repay-loans/understand/plans/standa...

Their request for a payment outside of the Electronic withdrawal contract is also a violation:
"Direct Consolidation Loan
A federal loan made by the U.S. Department of Education that allows you to combine one or more federal student loans into one new loan. As a result of consolidation, you will only have to make one monthly payment on your federal loans and the amount of time you have to repay your loan will be extended." http://studentaid.ed.gov/glossary#Direct_Consolidation_Loan

Progress. Ugly. But progress nonetheless.

Will be working on my response to Mohela this afternoon. I would like to make an offer to pay the loan off with the written condition that no additional interest, no additional fees will be attached and absolutely no negative information will be sent regarding any of these loans to any of the credit reporting agencies.

Wish me luck :)
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