OneDrive is the default save location, so someone must have changed it to the local drive (or wherever it is now). To revert back:
1. Open Word (or any Office application will do, I just always use Word).
2. Click OPTIONS>SAVE.
3. In the resulting menu, look for a check box by “Save to computer by default” and uncheck it.
Office 365 should revert back to saving to OneDrive.