Mohela Students Loan Servicer: Advantages and Disadvantages Reviewed
Mohela Students Loan Servicer: It can be an exciting experience to graduate from college–before your first student loan payment is due. If your goal is to repay student loans, you’re not alone.
According to the College Board, the average annual cost of tuition and fees for the 2016-2017 academic year was $33,480 for four-year private non-profit colleges.
With such a heavy price tag, you’re likely to get some support to fund your education in the form of loans. There are a variety of loan service providers who provide loans to college students under the Federal Family Education Loan (FFEL) Program of the Department of Education.
What is MOHELA?
Based in St. Louis, Missouri, with branches in Columbia, Missouri, and Washington, DC, MOHELA has over 30 years of student loan service industry experience.
MOHELA partners with students and graduates who have faced several different kinds of financial situations and offers a number of solutions designed to facilitate recovery, helping to move students on the path to debt-free.
If you have MOHELA student loans, it’s important to know how the company operates and how to make good on your debt. Read on for more information on how to repay your student loans and take charge of your financial life.
What Kind of Loan is MOHELA?
MOHELA provides direct loan to federal students and Federal Family Education Loan (FFEL) programs. The Department of Education assigns federal student loan servicers to lenders after disbursement of their loan payment. Borrowers have no say they are allocated to the loan servicer.
Based on customer satisfaction scores, the Department of Education allocates new federal loans to loan servicers. As of December 2018, more than any other loan service provider, Mohela was granted 20 percent of all federal student loans.
Mohela also services private student loans.
Student Loan Repayment Options Through MOHELA
As a federal loan servicer, MOHELA gives borrowers access to all federal loan repayment options. There are three repayment methods available based on the length of repayment:
Standard Repayment Plan
Your MOHELA student loans will be placed on this repayment plan by default. Standard plans can last up to ten years and have a fixed monthly payment ($50 minimum). Monthly loan payments are based on your total loan amount.
Graduated Repayment Plan
Graduated plans start with lower monthly payments and increase every two years over the life of the loan, which is typically ten years.
Extended Repayment Plan
Similar to Graduated plans, Extended plans have 25-year terms. MOHELA Borrowers will end up paying the most with this option because of interest.
Income-Driven Repayment Plan
Besides the length of time, you can also choose a federal repayment plan based on your income. These plans are referred to as Income-Driven Repayment (IDR) Plans. Each IDR plan has its own requirements, terms, and conditions.
There are four IDR plans to choose from:
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
IDR plans have set monthly payments based on the borrower’s income. Monthly payments may increase as your income increases. It’s also possible to reduce your monthly payments to $0 under IDR plans.
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Advantages of MOHELA
- Register for online access to your account. Once you have access you can contact MOHELA, access your monthly billing statements and pay bills.
- Enroll in autopay. MOHELA can deduct your payments automatically from your bank account. Signing up for autopay will reduce your interest by 0.25%.
- Sign up for income-driven repayment. You can request income-driven repayment, which limits your student loan payments to a percentage of your income, by completing a paper form with MOHELA. (You can apply online on studentloans.gov and then recertify your income each year online as well.)
- Process deferment and forbearance requests. MOHELA can help you temporarily stop making payments or reduce your payment amount if you qualify. This helps you stay in good standing to avoid default. But during any periods of deferment or forbearance, interest can continue to build.
- Process monthly payments and extra payments. MOHELA will track and collect your payments. If you want to make additional payments, you can instruct MOHELA (online, by phone or by mail) to apply extra payments to your current balance. Otherwise, it may apply the additional amount to next month’s payment instead.
4 Top MOHELA complaints from borrowers
Despite its being good, there are hundreds of MOHELA borrower complaints online, most of which fall under the four following situations.
1. PSLF issues
Many borrowers with loans serviced by MOHELA pursued Public Service Loan Forgiveness (PSLF). The PSLF program is confusing for borrowers because of its stipulations. You need to stay on top of your progress to make sure you’re making qualifying payments properly.
Many concerns from MOHELA deal with their lack of understanding of PSLF. Borrowers get bad information. One borrower expressed that she had contacted MOHELA to set up to apply for PSLF. Years later, she found that she did not qualify for any of her loan payments and she did not turn in the right paperwork.
Each time she spoke to a MOHELA customer service rep, she received different details. Another borrower made multiple phone calls to MOHELA, specifically asking for a PSLF-qualified loan payment plan. Finally, the loan was passed to another agent of the bank.
The creditor discovered that MOHELA incorrectly set up the payments. None of the payments counted towards PSLF. The borrower estimated that MOHELA’s mistake cost them over $3,500 in extra payments.
2. Too many phone calls
Another common complaint about MOHELA is the number of borrowers receiving telephone calls. Most of these grievances related to the payment of unpaid student loans.
A loan borrower serviced by MOHELA said, “My loan was overdue for about 9 days. I owed them a bill of $10, and they called me many times, every hour of the day. I charged it, but with their auto calling robot trash, interrupting my working day, etc., they always called for almost a week later. It’s insane.
Another reader said that when the loan was overdue by 21 days, MOHELA began calling the house of their in-laws.
3. Issues with MOHELA student loan transfers
There are periods when loans to and from various loan service providers are passed to students. Loan information may get lost or mixed up when this happens. For some MOHELA lenders, this is the case.
One borrower, for example, had their student loans transferred from another servant to MOHELA. We stated that during the transition, a number of errors occurred.
The biggest mistake was the total amount from $100,000 to $200,000 that they owed doubled. All had improved at the time of their complaint, following many calls to MOHELA to resolve this.
4. Customer service
Our customer service is a common thread with most concerns about MOHELA. Common complaints include information that is bad or misleading. We often fail to follow through on demands from the creditor.
A consumer said the customer service of MOHELA was good, but an interest rate discount was not initially provided by the servicer. It had to be brought to the attention of MOHELA by the creditor.
To lenders, these forms of customer service problems can be irritating. People are planning their entire repayment plan for the advice they receive. Doing your homework is important. Don’t rely on customer service department information from your loan service provider.