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The Department of Education is penalizing one of its student loan servicers for failing to send billing statements on time to 2.5 million borrowers.
The Education Department says Mohela has failed to process borrower applications for key repayment plans. The department isn't assigning new accounts to the student-loan company until it corrects ...
In response, the department announced it is withholding a $7.2 million payment to student loan servicer MOHELA for not providing student loan bills on time. The Education Department said 2.5 ...
Additionally, a group of student-loan borrowers in California filed a lawsuit on September 5 that accused MOHELA of failing to deliver debt discharges to borrowers who have faced school misconduct ...
The Washington Post noted that student borrower complaints against MOHELA spiked from 2021 to 2022: The Consumer Financial Protection Bureau (CFPB) went from receiving seven official complaints regarding MOHELA in the last quarter of 2021, to receiving over 500 complaints in the last three months of 2022 over MOHELA's loan servicing practices. [13]
For example, Federal Student Aid announced in April that over 1 million student-loan borrowers were being transferred from Mohela to new servicers upon Mohela request to allow borrowers to receive ...
In October 2023, the Department of Education announced that it would withhold $7.2 million in payment to the Missouri Higher Education Loan Authority (MOHELA) for failing to send billing statements on a timely basis to 2.5 million borrowers that caused 800,000 borrowers to fall into delinquency and the Department directed MOHELA to place all ...
Pew Charitable Trusts research highlights the increasing number of student loan borrowers who encounter repayment problems or interruptions. As of October 2018, the number of student loan borrowers in default in the United States was more than 8 million, which equates to about 1 in 5 federal student loan borrowers. [20]