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Conn Law, PC is investigating potential claims by California residents with student loans serviced by MOHELA who were enrolled in the Saving on a Valuable Education Plan, commonly known as the SAVE Plan, and later saw interest added to their accounts, inflated balances, or inaccurate information on their credit reports.

This investigation includes California borrowers whose MOHELA-serviced student loans showed interest or balance increases during any of the following periods:

1. October 2023 to July 2024, when the borrower was enrolled in SAVE and made the required monthly payments;
2. August 2024 to July 2025, when SAVE borrowers were generally placed into a litigation-related forbearance with a 0% interest rate; and
3. August 2025 to the present, if MOHELA continued to display, collect, calculate interest on, or credit report balances that included interest that should not have been assessed earlier. 

MOHELA SAVE Plan Interest Problems

The SAVE Plan was designed to help federal student loan borrowers avoid runaway interest. Under SAVE, borrowers’ monthly payments were based on income. One of the most important features of the plan was that borrowers’ balances generally should not grow from unpaid monthly interest so long as they made their required SAVE payments.

But some borrowers have reported that MOHELA showed interest accruing anyway.

After courts blocked implementation of SAVE in 2024, SAVE borrowers were generally placed into a special forbearance. During that forbearance, borrowers were told that no monthly payments were required and that their loans would be in a 0% interest status. In other words, during that period, interest generally should not have accrued regardless of whether the borrower made payments.

Conn Law, PC is investigating reports that MOHELA nevertheless showed, added, collected, or credit reported interest during these periods.

What May Have Gone Wrong?

California borrowers may have been affected if MOHELA:

• Added interest while the borrower was enrolled in SAVE and making required payments;
• Showed interest accruing during the SAVE litigation forbearance;
• Sent statements showing a 0% interest rate but also showing accrued interest;
• Failed to remove interest that should not have been added;
• Reported an inflated student loan balance to Equifax, Experian, or TransUnion;
• Verified or updated an inaccurate balance after the borrower disputed the reporting;
• Continued to claim pre-August 2025 interest after interest restarted prospectively; or
• Used an inflated balance to calculate additional interest after August 1, 2025.

These problems can matter even if interest is now accruing again. If MOHELA failed to remove interest that should never have been assessed, then later balances may still be wrong. In some cases, an earlier interest error may also cause later interest calculations to be inflated if the wrongful amount became part of the balance used to calculate new interest.

Three Time Periods We Are Investigating 

1. SAVE Plan Payments: October 2023 to July 2024

This period covers borrowers who were enrolled in SAVE after federal student loan payments resumed.

You may have a claim if:

• You were enrolled in SAVE;
• You made the required monthly payments;
• Your MOHELA balance still increased because of interest;
• MOHELA told you the interest would be corrected, but did not fix it; or
• MOHELA reported the inflated balance on your credit report.

2, SAVE Litigation Forbearance: August 2024 to July 2025

This period covers borrowers who were placed into the SAVE-related forbearance after courts blocked implementation of the SAVE Plan.

You may have a claim if:

• MOHELA placed your loans in SAVE forbearance;
• Your account showed a 0% interest rate;
• MOHELA nevertheless showed accrued interest;
• MOHELA told you your account was being updated to reflect 0% interest;
• MOHELA said you were in the wrong forbearance;
• MOHELA failed to remove interest from the forbearance period; or
• MOHELA reported a balance that included interest from this period to the credit bureaus.

This period is especially important because borrowers in the SAVE litigation forbearance generally were not required to make payments and were supposed to be in a 0% interest status.

3. After August 1, 2025

Beginning August 1, 2025, interest could begin accruing prospectively for SAVE borrowers. But that does not mean MOHELA could retroactively charge interest from earlier periods when interest should not have accrued.

You may still have a claim if, after August 1, 2025:

• MOHELA continued to include earlier wrongful interest in your balance;
• MOHELA tried to collect interest that should have been removed;
• MOHELA reported an inflated balance to the credit bureaus;
• MOHELA verified an inaccurate balance after a credit dispute;
• Your balance increased by more than ordinary prospective interest would explain; or
• MOHELA calculated new interest using a balance inflated by earlier wrongful interest. 

Credit Reporting Problems

Incorrect student loan credit reporting can cause serious harm. An inflated student loan balance can affect your credit score, debt-to-income ratio, ability to qualify for a mortgage or car loan, interest rates, rental applications, and overall financial security.

If MOHELA reported a balance that included interest you did not owe, and then failed to correct the reporting after a dispute, you may have claims under California and federal credit reporting and consumer protection laws.

Conn Law is particularly interested in hearing from borrowers who disputed MOHELA’s reporting with:

• Equifax;
• Experian;
• TransUnion;
• MOHELA;
• Federal Student Aid;
• The CFPB;
• The California Department of Financial Protection and Innovation; or
• Another state or federal regulator.

Signs You May Be Affected

You may have a potential case if you live in California and:

• Your student loans were serviced by MOHELA;
• You were enrolled in the SAVE Plan;
• Your MOHELA account showed interest accruing while you were in SAVE;
• Your MOHELA account showed interest accruing during SAVE forbearance;
• Your account showed a 0% interest rate but also showed accrued interest;
• Your balance increased even though you were told interest should not accrue;
• MOHELA told you it was correcting or reviewing your interest;
• MOHELA said your account was in the wrong forbearance;
• MOHELA removed your account history or communications from its online portal;
• MOHELA reported an inflated balance to the credit bureaus;
• You disputed the balance and MOHELA failed to fix it; or
• Your credit, mortgage application, car loan, rental application, or other financial situation was affected.

California Borrowers Have Rights

Student loan servicers must provide accurate information, maintain accurate account records, respond to borrower requests, and correct certain errors. Companies that furnish information to credit reporting agencies must also report accurately and reasonably investigate disputes.

Potential claims may include violations of:

• The California Student Borrower Bill of Rights;
• The California Consumer Credit Reporting Agencies Act;
• The Rosenthal Fair Debt Collection Practices Act; and
• The federal Fair Credit Reporting Act.

Every case is different. But if MOHELA added interest that should not have been added, failed to correct your balance, or reported an inflated balance on your credit, you may be entitled to compensation.

What You Should Save

If you believe MOHELA incorrectly added interest to your student loans, save copies of:

• MOHELA billing statements;
• MOHELA account screenshots;
• Notices showing your interest rate;
• Notices showing accrued interest;
• SAVE Plan enrollment records;
• Forbearance notices;
• Letters or emails from MOHELA;
• Communications saying your account would be updated to reflect 0% interest;
• Credit reports from Equifax, Experian, and TransUnion;
• Credit disputes you submitted;
• Responses from MOHELA or the credit bureaus;
• Complaints to Federal Student Aid, the CFPB, or DFPI;
• Records showing credit-score changes, denials, higher interest rates, or other harm.

Did MOHELA Add Interest to Your SAVE Plan Loans?

Conn Law, PC is investigating potential claims by California borrowers whose MOHELA-serviced student loans showed interest, inflated balances, or inaccurate credit reporting while they were enrolled in the SAVE Plan or placed in a SAVE-related 0% interest forbearance.

If this happened to you, contact Conn Law, PC for a free consultation.

Call us at 877-421-9759 or fill out the intake form below.