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Screenshot of obtained emails from MOHELA showcasing the one asking "Are we the bad guys?"

THE

MOHELA

PAPERS

Once a small not-for-profit servicer, the Higher Education Loan Authority of the State of Missouri (MOHELA) is now a servicing giant at the center of the student loan crisis. A years-long investigation by the Student Borrower Protection Center and the American Federation of Teachers reveals:

MOHELA has failed to perform basic servicing functions such as providing borrowers with access to correct information about their loans and options, and processing basic forms, and has instead chosen a complex “call deflection” scheme—a byzantine loop of misinformation and false promises.

In all, more than four in ten student loan borrowers MOHELA services have experienced a servicing failure since loan payments resumed in September 2023. 

MOHELA is recently known for its central role in Biden v. Nebraska in 2023, in which the Supreme Court blocked President Biden’s student debt relief from reaching over 40 million people because of MOHELA’s “potential loss of revenue.” 

 

An internal email between two MOHELA employees asking, “Are we the bad guys?”

Screenshot of obtained emails from MOHELA 
 “just out of curiosity, is MOHELA apart of the lawsuit going on to prevent the loan forgiveness? Are we the bad guys?”
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Screenshot of an internal email between two MOHELA employees asking, “Are we the bad guys?”

Once a small not-for-profit servicer, MOHELA is now one of the largest in the federal student loan system. During the three-and-a-half-year payment pause, MOHELA’s portfolio more than tripled—growing from 2.5 million borrowers in February 2020 to 8.4 million when payments resumed in the fall of 2023.

Graph of MOHELA's financial overview showing 350 billion total assets owned & serviced in FY-2024 (50 billion in FY-2014)
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Graph of MOHELA's financial overview showing 350 billion total assets owned & serviced in FY-2024 (50 billion in FY-2014)

The U.S. Department of Education found “MOHELA failed to meet its basic obligation” when it was unable to send timely bills to 2.5 million borrowers in October 2023, the first month of the return to repayment after the 3+ year payment pause. As a result, the Department withheld $7.2 million in payment to MOHELA. Because MOHELA failed to meet its most basic obligations as a student loan servicer—800,000 borrowers immediately became delinquent on their student loans.

ED's release announcing withholding of payment to MOHELA as part of accountability measures for harmed student loan borrowers
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Graph of MOHELA's financial overview showing 350 billion total assets owned & serviced in FY-2024 (50 billion in FY-2014)

MOHELA denied Public Service Loan Forgiveness (PSLF) to public service workers—but redacted the codes denoting why borrowers were denied relief.

Screenshot of table of PSLF denials, which leaves out denial code (reason for denials), showing California State University has 25 denials as example.
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MOHELA’s internal “communications playbook” instructs employees to "deflect" borrowers away from call centers and customer service representatives to "self-service" and incomplete online resources—despite self-service being impossible for dozens of issues borrowers encounter.

MOHELA’s internal “communications playbook” instructing employees to "deflect" borrowers away from call centers and service.
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MOHELA’s internal “communications playbook” instructing employees to "deflect" borrowers away from call centers and service.
MOHELA’s internal “communications playbook” instructing employees to "deflect" borrowers away from call centers and service.
MOHELA’s internal “communications playbook” instructing employees to "deflect" borrowers away from call centers and service.
MOHELA’s internal “communications playbook” instructing employees to "deflect" borrowers away from call centers and service.
MOHELA’s internal “communications playbook” instructing employees to "deflect" borrowers away from call centers and service.

Borrowers who were “deflected” from call centers to MOHELA’s website during the height of the return to repayment, from mid-November to mid-December 2023, were greeted with a pop-up informing them of website maintenance that resulted in login issues. Borrowers who were unable to log in during that period had effectively no way to resolve loan issues. 

https://web.archive.org/web/20231118105533/https://www.mohela.com/ MOHELA's maintenance popup that caused in login issues.
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https://web.archive.org/web/20231118105533/https://www.mohela.com/ MOHELA's maintenance popup that caused in login issues.

MOHELA’s General Counsel Scott Lause expressed fear over potential backlash should MOHELA’s call deflection scheme become public.

 

The word “deflect” appears 146 times in MOHELA’s return to repayment-related documents.

MOHELA Gen. Counsel Lause email expressing fear over potential backlash should MOHELA’s call deflection scheme become public.
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MOHELA Gen. Counsel Lause email expressing fear over potential backlash should MOHELA’s call deflection scheme become public.

MOHELA advised the Department to “[e]xclude any phone numbers to call into on all communications” and “[a]void phrases such as call or chat with your servicer." MOHELA has also identified 28 topics for which there are no self-service options for borrowers, including refunds, credit concerns including disputes, administrative forbearance, TEACH grant servicing, and PSLF reconsideration. (emphasis added)

Screenshot of part of MOHELA's list of 28 topics that should not allow a self-service option for borrowers (such as refunds)
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Screenshot of part of MOHELA's list of 28 topics that should not allow a self-service option for borrowers (such as refunds)

MOHELA ASKED, "ARE WE THE BAD GUYS?"

YOU BE THE JUDGE.

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