Education Department Cracks Down on Student Loan Servicers for Billing Errors
TL;DR
The Education Department revealed that a contracted loan servicing company, MOHELA, failed to send timely billing statements to 2.5 million borrowers, causing hundreds of thousands to miss their payments. As a result, the department will withhold $7.2 million of compensation due to MOHELA. Approximately 800,000 borrowers became delinquent on their loans due to the late billing notices. The department has directed MOHELA to place these borrowers in temporary forbearance with 0% interest rates until the billing issues are resolved. The errors are the latest in a series of problems faced by the Biden administration in restarting student loan payments.
Topics:top-newseducation#borrower-assistance#education#education-department#loan-servicing-errors#mohela#student-loans
- 2.5M student loan borrowers hit with billing mistakes, Education Department says POLITICO
- Education Department penalizes Missouri lender for error that made 800,000 student loan borrowers delinquent CNBC
- MOHELA punished by Education Dept. for student loan servicing errors USA TODAY
- Biden administration begins punishing servicers for student loan errors The Washington Post
- Student loan servicer MOHELA penalized for sending late bills CNN
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