STUDENT LOAN COMPANY STEALS MILLIONS FROM AMERICANS

Millions of Americans are reporting a disturbing trend where their student loan balances are increasing despite making regular payments.

According to a landmark consumer protection lawsuit filed by the American Federation of Teachers (AFT) and updated in January 2026, the loan servicer MOHELA is accused of systemic mismanagement impacting approximately 8 million borrowers.

One high profile case involves Cara Black, a medical student who graduated with $300,000 in debt and enrolled in what was intended to be a manageable repayment plan.

Despite her efforts to stay on top of her obligations, Black discovered that her balance had inexplicably jumped by nearly $17,000 in a single year.

After months of calling and emailing to resolve the discrepancy, the erroneous charges continued to mount, eventually exceeding $35,000 in additional debt.

The lawsuit alleges that these issues are not isolated incidents but rather part of a "call deflection" scheme designed to pad corporate profits by making it nearly impossible for borrowers to reach live customer service representatives.

The U.S. Department of Education previously took the rare step of withholding $7.2 million in payments to MOHELA after the company failed to send timely billing statements to 2.5 million people.

This specific failure resulted in over 800,000 borrowers being wrongfully marked as delinquent, severely damaging their credit scores and financial stability.

While MOHELA has consistently denied any wrongdoing and argued that it follows federal guidelines, the sheer volume of complaints has triggered additional investigations by the Consumer Financial Protection Bureau (CFPB) and several state attorneys general.

Borrowers are being urged to meticulously check their monthly statements and keep records of all communications as the legal battle over these alleged overcharges continues to move through the federal court system.