A major student-loan company is being punished for preventing over 460,000 borrowers from accessing cheaper monthly payments [Video]

The Education Department notified student-loan company MOHELA on Tuesday that it would be facing penalties for failing to perform the servicing obligations required in its contract.

According to a document from the Education Department reviewed by Business Insider, MOHELA has failed to process over 460,000 applications for borrowers on income-driven repayment plans, preventing those borrowers from accessing more affordable monthly payments.

The department also said that MOHELA has failed to stop capitalizing interest on borrowers’ accounts, incorrectly marked some borrowers for negative credit reporting, and processed forgiveness for borrowers who met the threshold in a timely manner.

“The Department continues to take swift action in response to errors that cause confusion or unnecessary difficulty for borrowers,” Education Secretary Miguel Cardona told BI in a statement. “Federal Student Aid has determined, through its oversight of federal student loan servicers, that MOHELA has not consistently met the Department’s standards for serving borrowers. MOHELA’s continued challenges have resulted in less-than-satisfactory …