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The Student Loan Shuffle
Posted on Apr 24, 2012
By Marian Wang, ProPublica
“I wanted to continue making payments regardless of what their problem was,” Mahnk explained. But she’s still concerned about how things will shake out. “I’m only taking their word on it that my payment is fine, and that EdFinancial is going to do everything they’re supposed to do.”
EdFinancial did not respond to a request for comment.
Some borrowers were notified of the switch only after the fact. “There was really no prior warning,” said Scott Trudeau, a borrower whose loans were transferred to Mohela in late January. Trudeau, who said he’s never fallen behind on his loans, has had recurring problems since the switchover trying to correct his bank account information with Mohela.
“I get delinquency notices regularly, I get letters in the mail, but every time I try to give them money, the system breaks down,” he said. “I’ve had no trouble with the Department of Education all these years, but it’s been nothing but confusion with Mohela.”
“Anytime you change a servicing relationship, it can cause concern,” said Will Shaffner, Mohela’s director of business development and government relations. “They need to pick up the phone and call us. If they’re not satisfied with our service or aren’t getting answers, they should ask to speak with a supervisor. They can even get in touch with our CEO if they need to.”
The Department of Education’s own implementation schedule shows that the transition is still a work in progress and the phasing in of new servicers is being pushed back.
“FSA has been working aggressively to implement the new not-for-profit servicers,” the document reads. “Our original schedule did not fully accommodate the level of effort required to bring up servicers in a way that minimizes risks for borrowers, FSA, and the not-for-profits themselves.”
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