MOHELA is even worse than we thought.

Hi Mike—get ready for a DOOZY about everyone's favorite student loan company...to hate: MOHELA.

We just released findings from a multi-year investigation with our partners at the American Federation of Teachers which shed light on just how bad the Higher Education Loan Authority of the State of Missouri (also known as MOHELA) is. The results are eye-popping. Check it all out here:

The MOHELA Papers

First and foremost: we found clear-cut evidence that MOHELA purposely “deflects” borrowers (its customers) seeking help, information, or guidance from the company. This is bad business in normal times but catastrophic right now: more than four-in-ten student loan borrowers serviced by MOHELA have experienced a servicing failure since loan payments resumed in September 2023. Now we know why borrowers can’t get help when things go wrong.

Among the evidence we found:

A company-wide “playbook” for a “call deflection” scheme to intentionally funnel borrowers away from their call centers and customer service representatives, to “self-service” and defunct or incomplete online resources. The word “deflect” appears 146 times in MOHELA’s return to repayment-related documents obtained through a Sunshine Law request.

Delays and errors in processing applications for President Biden's new Saving on a Valuable Education (SAVE) plan can potentially cost low-income borrowers thousands of dollars a year.

Data indicating the company (which is now the sole servicer responsible for handling the Public Service Loan Forgiveness program) continues to deny relief to public service workers (i.e., public school teachers, first responders, and health care professionals). In 2022, the Consumer Financial Protection Bureau warned that improper denials are an unfair practice under the law.

The company’s failures prevent borrowers from getting critical information and accessing their rights, including the Biden Administration’s SAVE plan, the most affordable repayment option to date. The Consumer Financial Protection Bureau has made clear that when a servicer fails to provide a way for borrowers to resolve issues in a timely manner, that company is engaging in “unfair and abusive acts or practices.” In other words, they are breaking federal law. Keep in mind: MOHELA is now one of the largest federal student loan servicers, servicing the accounts of federal student borrowers across all 50 states.

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As the findings of our investigation reveal, MOHELA’s actions as the three-and-a-half-year student loan payment pause came to an end are cause for alarm. Without immediate intervention and action by federal and state regulators, MOHELA’s actions will have long-standing consequences for millions.

We urge you to click through www.MOHELApapers.org to see for yourself just how bad the company is. The web of evidence reveals backward business incentives and sly company practices behind MOHELA's failing customer service.

We’ll be over here, continuing to hold bad student loan servicers accountable,

Student Borrower Protection Center