Borrowers Get False Notices That Their Student Loans Are Delinquent

MOHELA Allegedly Erroneously Telling Borrowers Their Student Loans Are Delinquent

The false delinquency notices appear to have begun over the weekend, with borrowers receiving sudden emails from MOHELA telling them that their student loans are past due, even though they have been in a forbearance with no required payments, according to The College Investor in a report on Sunday. One unverified screenshot the report linked to appeared to show a borrower’s Education Department dashboard at StudentAid.gov with a loan status that said “No payment is currently due,” while their MOHELA dashboard indicated the borrower was 12 months behind on payments with a $6,226.92 past due balance owed.

The allegations have been corroborated by other student loan borrower advocates.

“We’re hearing and seeing the reports that MOHELA is sending notices to student debtors about their balance and deadlines in error,” said the Debt Collective, a national debtor’s union advocating for student loan borrowers, in a statement on X on Monday. “If that is you, please reach out to us.”

Many of the affected borrowers appear to be in the SAVE plan, which the Education Department is working to phase out. Loan servicers, including MOHELA, have been sending notices to SAVE plan borrowers giving them 90 days to move their student loans to a different repayment plan. If they don’t, the department has said that borrowers will be placed automatically into a Standard plan. But these official 90-day notices only started to go out in early July. That means no SAVE plan borrower has missed the deadline to change repayment plans yet, and so no SAVE plan borrower should suddenly be delinquent on their student loans if they have otherwise been in an administrative forbearance.

Some borrowers have taken to public forums to voice their confusion and frustration.

“Was supposed to be in forbearance and got a letter from Mohela saying by payments are ‘Critically Past Due,’” wrote one user on Reddit on Saturday. “I’ve been in forbearance since I tried entering the SAVE plan, which RIP. I’ve checked Mohela monthly, and it kept saying ‘no payment due.’ I even got a letter in June from them explaining interest accrual during forbearance and my studentaid.gov site says I’m in forbearance since it was last updated on July 7. I saved all of this for my records, but now Mohela is saying I owe over 9 payments.”

“I just woke up to the same email from them,” replied another Reddit user. “Makes zero sense because the month before it said I was in ‘forbearance’ dated 06/03/2025.”

“I AM NOT DELINQUEN!! I AM IN FORBEARANCE!! FOR CRYING OUT LOUD!! OMG!!” posted another frustrated student loan borrower.

MOHELA Has Been Accused Of Erroneous Notices For Student Loans In The Past

MOHELA acknowledged the issues in a statement via email on Monday.

“MOHELA is aware that some borrowers have raised concerns indicating they received inappropriate delinquency notifications. Any such matters are thoroughly reviewed and addressed by MOHELA. We encourage borrowers to monitor their account and related correspondence over the coming days for the latest information.”

Notably, MOHELA’s website has numerous messages discouraging borrowers from calling the servicer if they are experiencing problems with their student loans.

“Please expect longer hold times due to high call volume,” reads a pop-up message that appears as soon as MOHELA’s website loads.

“Borrowers who enrolled in or applied for the Saving on a Valuable Education (SAVE) Plan and have loans in forbearance must select a new repayment plan after receiving a notice from MOHELA,” says a separate banner message on MOHELA’s main landing page on its website. “No need to call!”

But MOHELA has a history of allegations that it mishandles student loans or issues borrowers late, false, or misleading correspondence. The servicer was hit with a major financial penalty by the Biden administration in 2023 for allegedly sending untimely billing statements, resulting in up to 800,000 borrowers falling behind on their student loans. The servicer disputed the allegations at the time.

And the American Federation of Teachers has a pending lawsuit against MOHELA, arguing in an amended complaint filed in January that the servicer unlawfully “misleads and misinforms borrowers, fails to process applications for PSLF and income-driven repayment (“IDR”) plans in a timely manner or entirely, fails to provide refunds, miscalculates balances, overcharges borrowers, fails to respond to borrower inquiries, and denies borrowers information to which they are entitled.” That lawsuit is ongoing.

MOHELA has vigorously denied such allegations in the past.

“MOHELA is a non-profit government contractor that acts in the best interest of the borrowers we serve,” said the agency in a statement in 2024 following congressional hearings on student loan servicing problems. “The organization was selected as a federal contractor because of its 40 years of experience and successful track record in helping student loan borrowers navigate repayment of their federal loans. MOHELA remains focused on its primary mission of serving student borrowers.”

Borrowers Struggle To Navigate Hurdles As Changes To Student Loans Take Effort

The latest allegations against MOHELA come as the Education Department rushes to implement major changes to federal student loans. In addition to ongoing efforts to phase out the SAVE plan, the department also launched a new income-driven repayment plan, the Repayment Assistance Plan (or RAP), last month. The department is also implementing new rules for borrowing, making changes to the repayment plan options for federal Parent PLUS loans, and has updated online application systems.

The department’s efforts have already hit a number of bumps. Borrowers have been reporting major problems when trying to enroll their student loans in a new income-driven repayment plan, such as receiving incorrect information on eligibility in the online IDR application system, or getting incorrect monthly payment estimates. The department recently notified an unknown number of student loan borrowers that they had to reapply for their repayment plan due to payment calculation errors. And federal student loan default rates continue to increase, with more than nine million borrowers now estimated to be in default.

Borrowers whose student loans who may be impacted by the latest problems should log into their online student loan accounts, both with the Education Department and their loan servicer. It is important to routinely verify your loan status and review any important correspondence or notifications to catch any errors before they become bigger problems.