I have a consolidated Dept of Ed loan that has been serviced by Mohela for the past 7 years. Every year I complete and submit the income based repayment plan. Three time including current year based on my submission they notify me that I qualify for $0.00 repayment based on submission. I always tell my wife to continue paying the same amount $123.00. This current year we switch banks about the same time they stated I qualified for the $0.00 and I forgot to remind my wife to set up the auto pay, because they don’t send a statement when they do this. It appears I’m on a forbearance, but I’ve never requested a forbearance. During the years they qualify me for this unrequested forbearance, it appears most of the monthly payment goes to interest.
1. Can they place me on a forbearance as a result of my Income based submission without me requesting it or wanting it?
2. Is there a fee schedule or repayment calculator that can show what should be going to interest and what should be going to principle?
3. Should they be sending me a monthly statement even if they have placed me in a forbearance, since the interest adds monthly?
I know it’s my fault, for not checking sooner. It’s been 6 months since my wife last sent a payment, but I really think Mohela has questionable practices.
Obviously there is no way for me to know specifically why they did this to you but I can offer my opinion. They did it because the representative was damn lazy. It takes less time to check a box for forbearance than to process your income driven repayment option.
If we look at the Navient lawsuit by the Consumer Financial Protection Bureau we get some clues. As the LA Times said, “Specifically, the government alleged that Navient maintained compensation policies that encouraged customer service representatives to push borrowers into forbearance, which allows borrowers to suspend payments without defaulting but does not stop interest from accruing.
However, most federal student-loan borrowers earned the right in 2009 to enroll in the less costly payment options that are based on their income.
Although those plans save borrowers money, forbearance was more lucrative for Navient, the agency alleged because the company could enroll borrowers in forbearance in less time and with less staff.
In all, the servicer slapped borrowers with additional interest charges of up to $4 billion by enrolling them in repeated forbearance plans from January 2010 to March 2015, according to the consumer agency.
“For many of these borrowers, had they been enrolled in an income-driven repayment plan, they would have avoided much or all of their additional charges,” the agency said in its complaint, noting the government would have picked up the tab for unpaid interest on subsidized loans for three years.”
So could a similar situation be going on at Mohela, sure could.
I would absolutely make sure Mohela has you enrolled in the income driven repayment plan and NOT in forbearance. At least in the income driven repayment plan you are getting credit towards potential eventual forgiveness with each monthly payment even if it is $0 per month. As long as you are in forbearance you get no credit towards eventual forgiveness.
And if you qualify for a $0 income driven repayment plan then stop sending payments. But make sure you are actually enrolled in a plan first and not some lazy ass servicer forbearance program.
Finally, you wanted to know to know how they payment should be calculated. I would be very surprised anything is going towards the original balance since forbearance just makes your balances grow with added interest.
As far as them not sending you a statement, it may not be required. Set a calendar reminder to login and check your account once a month.