Sen. Elizabeth Warren (D-Mass.) asked the leader of student loan servicer MOHELA to appear before the Senate in April to discuss the problems with the resumption of student loan payments last autumn, which resulted in borrowers receiving incorrect bills and facing challenges in obtaining assistance to resolve them.
Announcing a Senate hearing for the Subcommittee on Economic Policy called “MOHELA’s Performance as a Student Loan Servicer” on April 10, Warren stated this in a letter sent on Monday.
In the letter to MOHELA CEO Scott Giles, Warren mentioned that the hearing would focus on evaluating the performance of the Higher Education Loan Authority of the State of Missouri (MOHELA) as a student loan servicer, particularly regarding student loan borrowers’ experiences with returning to repayment and the Public Service Loan Forgiveness (PSLF) program.
Public Service Loan Forgiveness Program (PSLF) offers relief for student debts to those working for the government or certain nonprofits after making 120 consecutive payments on their student loans. MOHELA is now the only provider handling PSLF.
Expressing her dissatisfaction in the letter, Warren stated that MOHELA had exacerbated the difficulties faced by student loan borrowers by mishandling the return to repayment following the COVID-19 pandemic-related payment pause, as well as impeding public servants’ access to PSLF relief.
During the restart of student loan payments, MOHELA was fined $7.2 million by the Department of Education in October for sending incorrect balances to 2.5 million borrowers, causing many to miss their payments.
Moreover, Warren asked the CEO to offer insights into MOHELA’s role as a student loan servicer during a significant transition period for the federal student loan program, while also inquiring about the experiences of student borrowers during the student loan restart.
At the end of February, Warren and other prominent Democrats demanded an investigation into MOHELA.
The investigation and Senate hearing represent a victory for the Student Borrower Protection Center and the American Federation of Teachers, who released a report accusing MOHELA of deliberately dodging borrowers’ queries and not assisting those on PSLF.
Democrats stated, “We call on the Consumer Financial Protection Bureau and state Attorneys General to scrutinize MOHELA and take appropriate legal action. Our nation’s public servants, members of the military, and first responders deserve much better.”
The Hill has contacted MOHELA for a comment.
