A transfer of student loan accounts from Nelnet to Mohela in 2023 resulted in millions of credit reporting errors, according to lawmakers. Nearly 2 million duplicate student loan records appeared on borrowers' credit reports, and hundreds of thousands of borrowers experienced incorrect credit scores for up to a year and a half. Lawmakers are urging the Consumer Financial Protection Bureau and the U.S. Department of Education to investigate the issue.
A “faulty” transfer of student loan accounts from Nelnet to Mohela in 2023 led to “millions of consumer credit reporting errors,” lawmakers say in a new letter to government agencies reviewed by CNBC. The change in loan servicers caused nearly 2 million duplicate student loan records to appear on borrowers’ credit reports, while hundreds of thousands of borrowers’ credit scores were reported incorrectly for up to a year and a half, according to the letter. Sen. Elizabeth Warren, D-Mass.
Duplicate student loan balances on a borrowers’ credit report can reduce their credit scores and make it more difficult for them to obtain mortgages, car loans and other credit, the lawmakers note in the letter. Nelnet spokesperson Ben Kiser said the issues “arose out of an ED-directed change in servicing requirements,” which “are entirely outside servicers’ control.” Mohela did not immediately respond to a request for comment.
Student Loans Credit Reporting Mohela Nelnet Consumer Protection
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