The Education Department announced it would penalize student loan servicer Mohela for its failure to send timely billing statements to 2.5 million borrowers.

The U.S. Department of Education will penalize student loan servicer Mohela, or the Missouri Higher Education Loan Authority, for its failure to send timely billing statements to 2.5 million borrowers.

As a result of Mohela’s errors, more than 800,000 borrowers were delinquent on their loans, the Education Department said in a statement Monday.

The department is withholding $7.2 million in payment to Mohela for October and has directed the servicer to place all affected borrowers in forbearance until the issue is fully resolved, it said.