Student Loan Payment Problems What You Need to Know

Student Loan Payment Problems: What You Need to Know

Get the latest on MOHELA’s billing issues and how the Education Department’s forbearance measures can affect your student loans.

Trouble with a Loan Company

The government is acting against a company named MOHELA because it made mistakes with bills for people who borrowed money for school. 

This company did not send out bills on time to 2.5 million people, and that caused a big problem—800,000 of these people now look like they have not paid their loans back on time.

What is Being Done About It

The Education Department, which is in charge of making sure companies like MOHELA do their job right, has decided to hold back some money that they usually pay MOHELA. 

They are doing this to ensure these mistakes do not hurt borrowers.

Good News for Those Affected

If you were one of the people who got a late bill or no bill at all, you do not have to pay anything right now. 

The government has told MOHELA to give you a break (called forbearance) until they fix the problem. 

During this break, you will not have to pay, and you will not be charged any extra interest.

Promises from the Education Department

The Education Secretary, Miguel Cardona, said they are serious about ensuring borrowers are treated fairly. 

He said they are working on making the student loan system better and will keep a close eye on these loan companies.

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What This Means for You

  • No Payments Right Now: If MOHELA made a mistake with your bill, you can wait to pay until things are sorted out.
  • No Extra Charges: You will not be charged any more interest during this break.
  • Forgiveness Counts: If you are working towards forgiving your loan because you work in public service or have a certain payment plan, this time will still count.

Could Customer Service Get Worse?

Since the government is holding back some money, there are worries that MOHELA might need more time to help customers. 

They said before that they might be slow to answer questions until 2024 because they need more money to hire more help.

Looking Ahead

The government will keep watching these loan companies to make sure they are doing their job right. 

If they find more problems, they might take away more money or punish the companies in other ways.

If You Need Help

If you think you should get a break from payments but you are still being asked to pay, talk to MOHELA. 

You can also complain to a group called Federal Student Aid if you need to.

Stay alert and keep an eye on your loan account to make sure you are getting the help you should.

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