MOHELA (Missouri Higher Education Loan Authority) is a state-created nonprofit that became the sole servicer for Public Service Loan Forgiveness accounts. The massive influx of transferred accounts has overwhelmed their systems, and their terms of service do little to protect borrowers from the consequences of servicer failures.
The terms effectively disclaim liability for errors occurring during account transfers. Payment histories, PSLF payment counts, and IDR recertification dates are frequently incorrect after transfers, and borrowers must identify and dispute errors themselves.
MOHELA's payment count tracking has been unreliable. The terms require borrowers to maintain their own records and dispute incorrect counts through a slow process that can take months, during which borrowers may continue making payments they shouldn't owe.
Terms include broad disclaimers about processing timeframes. ECF certifications, IDR applications, and consolidation requests routinely exceed stated timeframes with no penalty to MOHELA and no recourse for borrowers.
Borrowers report not receiving important notices about payment changes, deadline warnings, or application status updates. The terms place responsibility on borrowers to check their accounts regularly, even when communications are delayed or missing.
When MOHELA makes errors resulting in overpayments or delayed forgiveness, the terms limit their responsibility to correcting the error going forward rather than providing compensation for the harm caused.
For borrowers pursuing Public Service Loan Forgiveness:
MOHELA has faced criticism from multiple sources: