Higher Education Loan Authority of the State of Missouri

PLUS loans, which are part of the Federal Direct Student Loan Program

Federal GradPLUS loans

Federal student loan consolidation

Number of student loans serviced

In a letter to members of the U.S. Senate, MOHELA stated that it serviced 2,464,028 student loan borrowers on February 1, 2020. This number increased to 7,773,939 by August 3, 2023.

Increased payment amounts

Lengthened estimated repayment-dates

Applied or capitalized interest

Criticism surrounding administration of Public Student Loan Forgiveness program

In December 2022, The Washington Post reported that "thousands of borrowers have lodged complaints with the Education Department" in the previous three months over MOHELA's administration of the Public Service Loan Forgiveness (PSLF) program. Under the program, eligible public servants, including social workers and teachers, are able to have their debt cancelled after 10 years of service and 120 loan payments made on-time. Student loan borrowers eligible for PSLF relief have filed suit against MOHELA, accusing the servicer of delaying the cancellation of their debt and forcing them to make additional payments.

Role in student loan forgiveness lawsuit

Whether the state of Missouri could sue on behalf of MOHELA, which itself declined to get involved in the lawsuit, to block U.S. President Biden's student loan forgiveness executive order was one of the main issues in the Supreme Court case on the matter.

MOHELA was accused of being involved in six state attorneys' general lawsuit against the loan forgiveness program, which MOHELA executives denied. The Supreme Court ultimately decided that it could sue on behalf of MOHELA in Biden v. Nebraska, citing Arkansas v. Texas (1953) and Lebron v. National Railroad Passenger Corp. (1995)

Legal issues

October 2023 $7.2 million Fine by U.S. Department of Education

In October 2023, the Department of Education announced it would penalize MOHELA for failing to send billing statements on time to 2.5 million student borrowers, whose payments resumed that month following a forbearance period that begun in 2020. As a result, ED announced it would withhold over $7.2 million from MOHELA's October payment, and ordered MOHELA to give all impacted student borrowers forbearance.

January 2024 Public Service Loan Forgiveness (PSLF) Class Action Lawsuit

In December 2023, a pair of student borrowers filed suit against MOHELA for its alleged mismanagement of the Public Service Loan Forgiveness (PSLF) program. The plaintiffs claimed that after becoming candidates for the program in August 2022, MOHELA did not respond to their requests, leading them to submit the request a year later. According to the plaintiffs, MOHELA nonetheless requested that the borrowers resume payments to their PSLF-eligible loans.

In January 2023, Sauder Schelkopf filed a class action lawsuit against the Department of Education and MOHELA. Plaintiffs Spencer Morgan, Francis Novak and Rowena Koenig claim that, despite servicing the PSLF program for more than a year before student loan payments resumed on Sept. 1, 2023, MOHELA has failed to process and render decisions on pending PSLF applications in a timely manner.

2024 American Federation of Teachers (AFT) lawsuit

In July 2024, the American Federation of Teachers (AFT) filed a lawsuit against MOHELA. The lawsuit accusing the company of mismanaging eight million student borrowers' accounts and preventing borrowers from making their payments and receiving debt relief. Following the suit, Senate Majority Leader Chuck Schumer and Senators Bernie Sanders and Elizabeth Warren called for ED to scrutinize MOHELA's practices.