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MOHELA Statement on Congressional Hearing

St. Louis, MO - April 8, 2024 - MOHELA, a governmental non-profit organization dedicated to helping the student loan borrowers it serves on behalf of the U.S. Department of Education's Office of Federal Student Aid (FSA), issued the following statement today ahead of the April 10, 2024, Banking, Housing, and Urban Affairs' Subcommittee on Economic Policy congressional hearing regarding federal student loan servicing:

While MOHELA's Executive Director cannot attend a hearing on April 10, the organization is actively engaged in conversations with the Subcommittee and has offered its cooperation in addressing any questions and concerns by participating in a series of bipartisan briefings on the identified areas of interest about student loan servicing. MOHELA has respectfully requested that the Chair temporarily suspend the April 10 hearing to provide MOHELA the opportunity to conduct its bipartisan briefings, while balancing MOHELA's need to continue focusing on its primary mission of serving student borrowers who are at the center of all its work. After those bipartisan briefings are complete and the Subcommittee has had an opportunity to review MOHELA's briefings and perspective, we are prepared to address the possible need for a hearing.

The Subcommittee's request for MOHELA's Executive Director to attend the hearing is based largely on a so-called 'investigative report'. On March 25, MOHELA sent a letter to the Student Borrower Protection Center calling on the organization to disband its PR campaign that is irresponsibly promoting false, misleading, and sensationalized claims about MOHELA's work as a federal contractor for FSA. 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. The campaign also promotes false information about the 20-month period that MOHELA has worked on behalf of FSA as its sole interim Public Service Loan Forgiveness (PSLF) contractor.

MOHELA remains focused on its primary mission of serving student borrowers throughout the return to repayment on-ramp period and continues to work diligently as the interim PSLF servicer to process loan forgiveness for borrowers on behalf of FSA. Beginning July 2022, only 20 months ago, MOHELA began its work as the interim PSLF servicer on behalf of the government. During the history of the program, approximately 857,000 borrowers have received PSLF forgiveness. Of those who received PSLF forgiveness under the program, MOHELA processed nearly $50 billion in PSLF forgiveness for nearly 700,000 borrowers (80%) at the direction of FSA – the highest number of forgiveness processed in the 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 agreed to operate as the government's interim PSLF servicer beginning June 1, 2022, while FSA transitioned to its new loan servicing environment through StudentAid.gov – a long-term vision strategy that was announced by the Education Department back in May 2022. The organization is dedicated to concluding its service as the interim PSLF processor as planned on April 30, 2024.

*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. Additionally, PSLF counters of eligible payments and PSLF forgiveness are processed from data contained in files from FSA.

On April 1, 2024, MOHELA began its contract with FSA for the Unified Servicing and Data Solution in alignment with FSA's vision for the Next Generation of Federal Student Loan Servicing, which does not include servicing of specialty programs (TEACH Grants, PSLF, or Total and Permanent Disability), which will be serviced under StudentAid.gov moving forward.

MOHELA is a governmental not-for-profit federal contractor for FSA. The organization 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 requirements that dictate 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.

During the massive and unprecedented return to repayment event, MOHELA worked with FSA to prepare to help the six million federal in-repayment 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 at the time. In 2023, MOHELA helped the six million federal borrowers enter repayment and facilitated 3.1 million customer service calls.