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For Immediate Release
04/01/2024
Media Contact: media@mohela.com


MOHELA Sends Cease and Desist to Organization Promoting False Information

St. Louis, MO - April 1, 2024 - MOHELA, a non-profit organization dedicated to helping the student loan borrowers it serves, sent a cease and desist letter to the Student Borrower Protection Center on March 25. The cease and desist, which can be viewed here, calls on the organization to immediately disband their disingenuous PR campaign that is irresponsibly promoting false, misleading, and sensationalized claims about MOHELA's work as a federal contractor for the U.S. Department of Education's Office of Federal Student Aid (FSA).

As detailed in the cease and desist, the organization has been promoting a false narrative about MOHELA's work as an FSA contractor through their disingenuously branded 'investigative report.' The organization's PR campaign attempts to create a false narrative about MOHELA's role in the return to repayment event that was led and managed by FSA after the three-year federally mandated loan payment pause was lifted in October 2023. As a federal contractor, MOHELA worked with FSA to prepare to help the six million federal borrowers that it serves, despite operating under the reduced funding and limited resources that were provided by FSA to its contractors during the massive return to repayment event.

The campaign also promotes false information about the 20-month period that MOHELA has worked on behalf of FSA as its interim sole Public Service Loan Forgiveness contractor. As of February 2024, MOHELA has processed nearly $48 billion in PSLF loan forgiveness at the direction of FSA for over 660,000 borrowers since becoming the interim PSLF servicer just 20 months ago – the highest number of forgiveness processed in history of the program. Despite the organization's false claims otherwise, MOHELA does not have authority to process loan forgiveness for eligible borrowers until authorization is provided by FSA as the owner of the loan.

"It is irresponsible that this organization continues to promote false and misleading claims about MOHELA's work and they must stop," said a MOHELA spokesperson. "Any claims that MOHELA does not act in the best interest of the borrowers we serve as a federal contractor is simply not true. Intentionally spreading false information and narratives about MOHELA's work on behalf of Federal Student Aid does nothing to improve the experience for students and borrowers navigating the federal student loan program and the repayment of their federally owned loans. MOHELA's priority has always been on helping the student borrowers that we are here to serve while they navigate the often complex and overwhelming federal repayment process, and that is what we remain proudly committed to doing."

MOHELA is a not-for-profit federal contractor for FSA. The company was selected as an FSA contractor because of its 40 years of experience and successful track record in helping student loan borrowers navigate their repayment. As a federal contractor for FSA, MOHELA is required to adhere to FSA guidance that dictates the overall process of repayment for borrowers within the federal student loan programs, as well as the service and assistance that is provided to FSA borrowers.

Here are some of the facts in response to the false and misleading claims being promoted through the Student Borrower Protection Center's PR campaign:

Return to Repayment

  • In 2023, MOHELA helped six million federal borrowers enter repayment and facilitated 3.1 million customer service calls during the massive and unprecedented return to repayment event.

  • Despite anticipated high demand during the massive and unprecedented return to repayment event of millions of borrowers resuming payment on the same date in October 2023, FSA changed MOHELA's contract to reduce funding and limit its customer service hours. As a federal contractor, MOHELA worked with FSA to prepare to help the six million in-repayment federal borrowers (of the total eight million borrowers that it serves) while operating under the reduced funding and limited resources that were provided by FSA to its contractors during this time.

  • On July 3, 2023, FSA provided its contractors with their 'Return to Repayment Playbook' which outlined guidelines for all contractors to adhere to as they dealt with the millions of borrowers returning to repayment. Per these guidelines, federal contractors were directed by FSA to implement "call deflection strategies" and encourage borrowers to use self-service options whenever possible to manage the anticipated high demand.

Public Service Loan Forgiveness

  • MOHELA does not have authority to process loan forgiveness for eligible borrowers until authorization is provided by FSA; the final decision to discharge loans is made by FSA as the owner of the loan, not MOHELA. It can take several months for borrowers to receive the final authorization for forgiveness from FSA.

  • Despite claims falsely made to the contrary, it is in MOHELA's best interest that the borrowers we serve receive forgiveness when they are eligible.

  • As of February 2024, MOHELA has processed nearly $48 billion in PSLF loan forgiveness at the direction of FSA for over 660,000 borrowers since becoming the interim PSLF servicer 20 months ago – the highest number of forgiveness processed in history of the program. In contrast, directly prior to MOHELA becoming the sole PSLF servicer, only about 165,000 borrowers had received $10.5 billion in loan forgiveness during the previous five-year period from 2017 through June 2022.

  • MOHELA's contract as the interim sole PSLF servicer for FSA concludes on May 1, 2024. MOHELA was operating as the interim PSLF servicer while FSA transitioned to its new loan servicing environment through StudentAid.gov.