- Student-loan company MOHELA said on its website that it’s transitioning borrowers to a new platform.
- The switch could mean up to 30-day delays in posting new payments.
- Borrowers being put on the new platform will be notified in the coming months.
More changes are coming for student-loan borrowers under one of the largest federal servicers.
Student-loan company MOHELA updated its website with a notice that it’s transitioning to a new online servicing platform, and that in the coming months, it will reach out to all borrowers it services to inform them of this transition.
According to a web page with information on the change, it “will not impact the existing terms, conditions, interest rates, loan discharge or forgiveness programs, or available repayment plans on your loans.”
MOHELA borrowers will have to establish a new account on the platform, and its mobile app will no longer be available once the transition is complete. Additionally, if a borrower makes a payment to MOHELA that was not yet posted on their account prior to the transition, the payments “may be delayed by up to 30 business days,” the guidance said.
“However, we will post the payment to your loan(s) with the effective date that the payment was made,” it said. “Please immediately begin using MOHELA’s new contact information to make payments to avoid payment posting delays.” The company affirmed in its guidance that aside from possible delays, borrowers should not suffer any other adverse effects from this transition.
The announcement of this change comes less than a month after federal student-loan payments resumed following an over three-year pause. To ease the transition back into repayment, President Joe Biden’s Education Department announced a 12-month “on-ramp” period during which it will not report any missed payments to credit agencies, but interest will still accrue.
However, the on-ramp hasn’t been enough for some borrowers. There have been a host of issues with repayment, including incorrect billing statements and hours-long customer service hold times, and it’s unclear how MOHELA’s transition to a new platform will impact the already rocky operations.
Scott Buchanan, executive director of the Student Loan Servicing Alliance — a group representing federal servicers — told Insider via email that this switch “is just about MOHELA investing where they can given limited resources from the government in improving borrower experience and their system capabilities,” he said.
“Other servicers use different platforms and are enhancing them or looking for new technologies as part of day to day business operations,” he added.
The Education Department did not immediately respond to Insider’s request for comment.
For borrowers on auto debit with their payments, MOHELA also said it’ll have a new name on its new platform: auto pay. Borrowers on auto pay prior to the transition will remain on automatic payments, and they should allow three to four business days from the date listed on the letter notifying them of the transition for billing and auto pay information to be available.
Across all federal servicers, many borrowers have been plagued with technical issues, and MOHELA said this transition will allow it “to explore new options with your customer service experience.” For example, another servicer — Nelnet — faced website outages in the months leading up to repayment, and one borrower previously told Insider he paid off his remaining balance in June, but Nelnet has yet to process his payment.
“I’m starting to be worried because I was told this would be taken care of, but it still hasn’t been dissolved and I want to know what’s going on,” he said.