Mohela Is A Pack Of ThievesPosted on January 15th, 2012 3 comments
I graduated from college in 2000, with some student loans courtesy of the Department of Education. I consolidated them in 2004, and have been paying diligently through direct debit for the past eight years. I was fortunate and didn’t have much student debt, and the payment amount was low enough that I rarely thought about it. Month after month, year after year, my payment would be withdrawn from my checking account, marching steadily towards a payoff date sometime in 2013.
Several weeks back, I started receiving letters about my loan. First was a notice from the Department of Education that they had given my loan to a company called Mohela for servicing. Then I received similar letters from Mohela itself. (Stupidly, Mohela has also started sending me monthly paper statements.) But whatever – it’s fine. I don’t really care who collects the money as long as my loan is being paid off and the terms haven’t changed.
Today I opened another letter from Mohela, dated January 10, 2012. It explains inside that my loan terms have changed. The interest rate is the same, but my monthly payment has decreased 74%, and my loan term has been extended until 2019! The only explanation for this change is a cryptic statement at the very end of the letter: “** Your terms have been re-calculated to maintain federal/program guidelines **”.
So let me get this straight, Mohela: You want me to pay the same interest rate on a principal balance that – under the new terms – is now decreasing at a significantly slower rate than before for an additional six years?! I don’t think so. Your little “re-calculation” works out to a significant increase in the total amount of interest I’m paying on that loan, without my consent. Sorry – I didn’t agree to that. You’re trying to steal from me.
I’ll be calling the Department of Education to complain on Tuesday, and I’ll be paying off the loan immediately. They aren’t going to get a single cent of additional interest out of me. I won’t be calling Mohela, however. They can suck it. It’s just not worth my time to try and get the payment terms restored.
1: Comments are back on? Is that on purpose or did wordpress hiccup?
2: So you see no problem with pronouncing judgment on the company without even bothering to check with them if there was some kind of error? Your theory is completely plausible but not yet very well supported. I understand you don’t take more of your time out to chase it further, but hey, there’s always enough time to call them thieves on the internet eh?
This EXACT thing happened to me. Have paid my loan via debit for a decade now without a glitch. I got the note that said MOHELA now managed the loan, but that nothing would change. HA! My payment of over $200/month dropped to $50 with NO NOTICE. My payoff date was moved from 2014 to 2021!!! This is completely illegal!
I phone MOHELA on Friday inquire, and the woman said that “the terms had not changed; there was just a glitch when the loans came into their system.” I asked if this was happening to the thousands of others who had loans bought by MOHELA. She said yes, and that it’s incumbent on people to read their new statements carefully to catch the glitch if it happened to them.
I am outraged, and I’m really not a person prone to outrage. I’ve drafted a letter but am still working out where to send it. Any ideas?
Oh yeah: and I got yet another notice yesterday in the mail (post-convo w/ MOHELA) that listed my interest rate at 3.75 instead of 3.5%. WTF??