Warren calls hearing to put spotlight on student loan servicer MOHELA

Sen. Elizabeth Warren (D-Mass.) invited the head of student loan servicer MOHELA to testify before the Senate in April regarding the difficulties with the return to student loan payments last fall that left borrowers with inaccurate bills and trouble getting responses on how to fix them.  

In a letter sent Monday, Warren announced a Senate hearing for the Subcommittee on Economic Policy titled “MOHELA’s Performance as a Student Loan Servicer” on April 10.  

“This hearing will examine the performance of the Higher Education Loan Authority of the State of Missouri (MOHELA) as a student loan servicer, with a focus on student loan borrowers’ experience with return to repayment and the Public Service Loan Forgiveness (PSLF) program,” the letter to MOHELA CEO Scott Giles said.  

PSLF, or the Public Service Loan Forgiveness Program, provides student debt relief for those who work for the government or some nonprofits after they make 120 consecutive payments on their student loans. MOHELA is now the sole student loan provider handling PSLF. 

“Your company has contributed to student loan borrowers’ difficulties by mishandling borrowers’ return to repayment following the COVID-19 pandemic-related pause on payments, interest, and collections and by impeding public servants’ access to PSLF relief,” Warren said in the letter.  

MOHELA was fined $7.2 million by the Department of Education in October, during the student loan payment restart, because the company sent out the wrong balances to 2.5 million borrowers, causing many to miss their payments.  

“Your testimony will provide you with an opportunity to offer context on MOHELA’s role as a student loan servicer at a time of significant transition for the federal student loan program,” Warren said, also asking the CEO to provide the committee an assessment student borrowers’ experiences during the student loan restart.  

Warren, along with other top Democrats, called for an investigation into MOHELA at the end of February.  

The investigation and Senate hearing is a win for the Student Borrower Protection Center and the American Federation of Teachers, which released a report accusing MOHELA of purposely deflecting borrowers’ questions and not helping those on PSLF.  

“We urge the Consumer Financial Protection Bureau and states Attorneys General to investigate MOHELA and pursue action to the fullest extent possible under the law.  Our nation’s public servants, members of the military, and first responders deserve far, far better,” the Democrats said.  

The Hill has reached out to MOHELA for comment.