Mohela Accused of Deliberately Delaying Customer Service Calls, Mishandling Student Loans


A recent report from the Daily Mail has shed light on troubling practices at student loan servicer Mohela. According to an anonymous former employee, call center workers were trained to keep customers on hold for at least 15 minutes before transferring them to someone who could assist with issues other than paying their loan or changing a repayment plan. This revelation raises serious questions about Mohela's customer service practices and its treatment of borrowers.

Mohela Accused of Deliberately Delaying Customer Service Calls, Mishandling Student Loans

(Photo : WIKIMEDIA COMMONS / Gage Skidmore)

Call Center Scripting and Training

The former Mohela employee described a frustrating work environment where adherence to strict scripts was mandatory. Workers were prohibited from admitting if they couldn't find information or were unsure, and were instead instructed to sound confident and knowledgeable. This approach, while common in call center settings, raises concerns about transparency and the quality of assistance provided to borrowers.

In addition to scripting, the employee also highlighted the pressure to keep customers on hold for a minimum of 15 minutes before transferring them to another representative. This tactic, according to the employee, was designed to reduce the number of direct interactions with customers, particularly for issues beyond basic loan payments or repayment plan changes. Such practices could contribute to borrower frustration and hinder timely resolution of complex issues.

READ MORE: Former MOHELA Call Center Agent Alleges 'Abysmal' Training And 'Atrocious' Work Environment, Faces Criticism Over Handling Of Student Loans 

Allegations of Overwork and Threats

The former employee also alleged that workers at Mohela were overworked and frequently faced threats from customers. The combination of stringent scripting requirements, long hold times, and the high volume of calls could create a stressful environment for employees, potentially impacting the quality of customer service provided.
Furthermore, the employee suggested that there was "incompetency" within the higher-ups at Mohela and the U.S. Department of Education. This allegation raises concerns about the management practices within Mohela and its ability to effectively oversee the servicing of student loans.

Senator Elizabeth Warren's Involvement

The revelations about Mohela's call center practices have caught the attention of U.S. Senator Elizabeth Warren. In a letter to Mohela CEO Scott Giles, Senator Warren invited him to testify before Congress at a hearing titled "MOHELA's Performance as a Student Loan Servicer." The hearing aimed to address concerns about Mohela's handling of student loan repayment processes.

Senator Warren accused Mohela of mishandling borrowers' return to repayment following the COVID-19 pandemic-related pause on payments, interest, and collections. She also highlighted a report alleging that Mohela used a "call deflection" scheme to redirect borrowers to its website instead of speaking to a customer service representative directly. These actions, according to Senator Warren, contributed to delays in over 800,000 public service workers receiving federal Public Service Loan Forgiveness.

Defense and Response

Despite the accusations leveled against Mohela, Scott Buchanan, executive director of the Student Loan Servicing Alliance, defended Mohela's actions during the congressional hearing. Buchanan denied that Mohela used a "call deflection" scheme to harm borrowers, stating that it was a strategy mandated by the Federal Student Aid office.
Buchanan also shifted blame onto the Federal Student Aid office, suggesting that the backlog of Public Service Loan Forgiveness applications was due to FSA's mishandling. This response raises questions about the relationship between student loan servicers like Mohela and the oversight provided by government agencies.

Consequences and Legal Action

Mohela's actions have not gone unnoticed, as the U.S. Department of Education penalized the company in October for failing to issue timely billing statements to 2.5 million borrowers. This failure resulted in 800,000 borrowers becoming delinquent on their loans, leading the department to withhold $7.2 million in payments to Mohela.
Additionally, Mohela is currently facing two class-action lawsuits over its alleged failure to timely process and render decisions for student loan borrowers enrolled in the Public Service Loan Forgiveness program. These legal challenges highlight the potential consequences of mishandling student loans and call into question Mohela's practices and oversight mechanisms.

The revelations from a former Mohela employee regarding the company's call center tactics raise serious concerns about transparency, customer service, and management practices within the student loan servicer. As the situation continues to unfold, it is clear that more oversight and accountability are needed to ensure that student loan borrowers receive the assistance and support they need.

RELATED ARTICLE: Student Loan-Servicing Operations, 900 Employees To Be Outsourced To Mohela By Navient Unit 

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