University of Miami Student Says $55,000 Were Mysteriously Added to Her Student Loan

Ana Jones*, a 50-year-old student attending the University of Miami and carrying student loan debt, decided to return to school to complete the degree she had previously left unfinished. But, she now finds herself in a stressful situation, facing challenges with her university and loan provider.

She took her first student loan in 2004, then another one of $20,000 in 2006 with Navient, which was one of the largest federal student loan servicers, and received a forbearance in 2012.

In 2017, she decided to return to school but had to make payments for about nine months because her loan was defaulted. A year later, when she was finally able to enroll at Miami Dade College, her loan had ballooned to $80,000.

Jones told Erudera News that amid the COVID-19 pandemic, Navient did not pause the accrual of interest at the time, and by June 2023, her student loan reached $95,000.

Her loan is now serviced by Mohela, a servicer to Federal Student Aid, and she claims the company recently added an extra $55,000 to her previous balance, bringing the total balance to $155,000. She states the loan was issued without her permission, and the servicer has not delivered the funds to her.

She desperately insists the amount of $55,000 should have at least been applied to her classes. That did not happen, and now she says she is at the maximum limit for federally subsidized and unsubsidized loans.

While trying to speak to responsible people at both the University of Miami, where she enrolled in late August, and her servicer to learn why the $55,000 was not applied to her school expenses, such as tuition, given that she will have to pay it back, she says that a woman staff member from the university, told her $5,000 from Mohela was added twice.

Jones learned that only $2,500 was added for fall 2023 and $2,500 for fall 2024 and that she has reached the limit for federal student loans.

“Mohela robbed me of 55,000, and they only dispersed $5,000 in funds to my school. They ripped me off $50,000,” Jones states, highlighting she holds a partial scholarship and her aunt helps her with $2,500 for two classes she has been taking.

Due to these circumstances, she is now behind in school as the University of Miami keeps blocking her from registered classes, meaning she is now unable to submit her assignments until she makes the payment.

‘I caught up on my homework, and now they are inventing more charges for me, or I get blocked from my homework. They charged me thousands for parking but still gave me parking tickets. It is evil.”

According to her, the reason behind this is the university’s intention to make her take out private loans.

“They are trying to get me to take out private student loans, but I will just take two classes at a time and pay cash and scholarships. I wish I hadn’t gone back to school. It is difficult to focus on my homework now that they are constantly beating me down like a punching bag to take my money,” she said.

Commenting on the issue, Lisa Ansell, lecturer and associate director at the University of Southern California, said that the unique removal of the constitutional bankruptcy rights has played a role in creating an environment where the student loan lenders, including the US Department of Education, are free to involve in exploitative lending practices and “act in the worst of bad faith.”

“The fact that the Department of Education actually makes a profit off defaulted student loans has led to the all too common occurrence where borrowers continue to pay for decades and wind up owing tens of thousands more than they had originally borrowed.

This is a result of the highly predatory nature of compounded interest, negative amortization, and lack of truth in lending laws that are illegal for all other types of consumer debt,” Ansell said in a statement to Erudera.

Like Ansell, Christina Winton, 48, a public servant in Arizona, believes lender abuse will become quite common if the constitutional rights to uniform bankruptcy are not protected. According to her, there seems to be a lack of visible regulation or oversight.

“Now, like in this case, colleges are using and abusing the fact that these loans continue to exist without rights to further inflate their earnings and demand extra fees from students?” Winton said.

Winton said that scholarships and grants should ideally be issued prior to any loans or cash payments, but it seems there might be a problem in this particular situation that demands further investigation.

Sources say countless other students have been unable to access Blackboard for 20 days due to circumstances similar to Jones’s.

Erudera has tried to reach out to Mohela and the University of Miami for a statement concerning the matter, but they did not respond to our request for comment.

In August 2021, US President Joe Biden announced his student loan forgiveness plan, which would forgive as much as $20,000 in debt for many borrowers. Nonetheless, the program was not able to proceed due to several lawsuits filed by Republicans, who insisted the president had no authority to cancel 400 billion in student debt.

The case was sent to the Supreme Court, which rejected the plan on June 30, ruling the president had overstepped his authority.

According to data from the US Department of Education, there are more student loan borrowers over the age of 50 than people under 25, with their debt standing at 8.5 million and 7.8 million, respectively.

On average, borrowers over the age of 50 own more than $41,000, whereas those under 25 years old have $14,807 in total debt.

To date, the collective student loan debt owned by 44 million US borrowers reached $1.7 trillion.

Note: In response to her concerns about the impact on her studies, the student has requested that her name be replaced with Ana Jones.

Image source: official Twitter account of the University of Miami