This last story is unusual because Kyra is a student loan expert. She is a staff attorney with the National Consumer Law Center who previously worked on the Project on Predatory Student Lending at Harvard Law School. But she also has six-figure student loan debt from her undergrad career at Temple University and her law school days at UC Berkeley.
She was in an income-driven repayment program before the pandemic, and switched it as the payment pause began. Then, because she is enrolled in the Public Service Loan Forgiveness program, her loan was transferred to MOHELA. Like Mitra Niknam, Kyra’s monthly payment suddenly increased tenfold.
As a student loan attorney, Kyra had heard about problems like miscalculated payments or enrollment in the wrong payment plan occurring during the frenzied period before resumption of payments. But this particular student borrower was the least likely in America to allow a servicer to get away with a miscalculation of that magnitude.
I filed a complaint with MOHELA, and they reiterated that the payment amount was correct, but did not explain how they had calculated that amount,” Kyra told me. “I reached out to the Federal Student Loan ombudsman’s office for help, and MOHELA indicated that they would fix the issue.” But MOHELA’s idea of fixing it was asking Kyra to reapply for income-driven repayment. After she contacted the student loan ombudsman, they stepped in again, and the situation was somewhat resolved, “although, I am still enrolled in the wrong plan,” Kyra said.
Kyra conceded that she could navigate the system because she was an expert and an attorney, who knew the proper calculations and who to contact when there was a problem. Many borrowers who receive a high bill aren’t so well situated to respond. “Too often, when servicers make mistakes, borrowers are left paying the price, often with money they couldn’t afford to lose in the first place,” she said.
Putting her expert hat on, Kyra said that any borrower who thinks their servicer miscalculated their payment amount should contact the ombudsman’s office, and file a complaint with the Consumer Financial Protection Bureau.
She added that President Biden’s “on-ramp” that delays consequences for delinquent payments is critical, “so that borrowers are not forced to choose between paying for food or paying their loan bill. However, I am worried that without further auditing and tighter oversight these issues will continue even after the on-ramp expires.