What is MOHELA? MOHELA (pronounced mo-HEE-lah), aka the Missouri Higher Education Loan Authority, services millions of borrowers as one of the major contractors hired by the government to service federal student loans.
It was founded in the 1980s as a private, non-profit organization sponsored by the state of Missouri to do a public good.
Some of these are frustrating because the borrower has little control over them. However, some of the issues we’ve described here can be mitigated or even avoided altogether with better borrower knowledge.
We recommend you do your research thoroughly to make sure you’re getting the correct information. Your servicer may not always communicate the right way.
The public good MOHELA did, for the majority of their tenure, was administering FFELP loans. In recent years, the government has contracted them to service other kinds of Department of Education loans, like the Direct Loans and Perkins Loans programs.
They also service private loans. In 2015, all Direct Loans that had previously been serviced by Aspire Resources, an Iowa-based organization, were transferred to MOHELA.
We’re here to look at some of the problems consumers have had when dealing with MOHELA. We hope this leaves you empowered with knowledge and maybe with better context with your own loan servicing issues.
MOHELA manages a huge amount of loans held by borrowers nationwide, so while there are plenty of complaints to sift through in the Consumer Financial Protection Bureau database, the Better Business Bureau website, and various other places around the web, they actually have a relatively low number of publicly posted complaints compared to their size.
That being said, there are complaints we found that may point to underlying issues that need to be addressed within MOHELA.
If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
Excessive Phone Calls
All servicers need to contact the borrowers they work with at some point. For many borrowers, problems can arise and compound when their servicer cannot reach them. However, when other servicers may claim they did their due diligence after one or a few attempts, MOHELA does not give up. In fact, they may go too far.
This issue has two sides. First, MOHELA tried to contact borrowers whose account recently became delinquent. Several borrowers spoke about how after one missed payment, MOHELA launched calls to their homes, workplaces, and family members.
Often family members were not listed on the borrower’s account, but contacted through skip-tracing. Borrowers felt this was excessive given they were often just one payment behind. Some claimed to not actually be delinquent at all, but having paid on time or having been in forbearance.
The second side shows a different point of view: family, friends, and acquaintances of a (possibly) delinquent borrower. Complaints detail how they were called multiple times a week, sometimes multiple times a day, and were confused by the source of the calls given they did not have any loan associated with MOHELA.
Some call recipients called back only to find they were being contacted because someone in their life, sometimes an ex-spouse or old friend they hadn’t seen in decades, was delinquent on their loans. Some recipients of these calls were elderly and just wanted to be left alone.
Some asked to be taken off the list; sometimes that worked, sometimes the calls kept coming. Still, given that these folks aren’t even the debtors, the number of phone calls many people received is troubling.
One instance was a case of mistaken identity, where the recipient of multiple phone calls from MOHELA was not a borrower, nor a friend or relative of the borrower, but simply had a similar name to a debtor. When they repeatedly told MOHELA they were not the right person and they must stop calling, MOHELA insisted they needed to write a formal cease and desist letter.
If you feel you are being harassed by phone calls, there are a few options. First, you can put your number on the Do Not Call Registry. Note that this is for sales calls only. Debt collectors, pollsters, and other kinds of calls are allowed to go through. (MOHELA was accused by some call recipients of trying to sell their services, so this might be applicable.)
Second, you can tell the organization calling you to stop. This might be achieved through a simple phone call of your own, if you specifically tell them to take you off their list, especially if you owe no debts. Even if you do owe money on a loan, there are still laws that protect you from being harassed by phone calls.
If a verbal warning to the caller isn’t enough, a cease and desist letter sent to the organization might be your best option. You might want to have a lawyer look over the language, especially so you don’t accidentally imply that you might be a debtor to a certain loan when you are not or agree to anything you did not wish to.
Issues With Transfers To And From MOHELA
The truth about loans is that you don’t have much control over who holds or services them. What does this mean? With federal loans, your loan servicer might switch to any other servicer authorized to handle federal loans.
With private loans, your loan could be sold to pretty much anyone. This is an unfortunate aspect of owing money. That being said, the transfer of loans to or from MOHELA has brought up some issues, especially concerning the mass transfer of loans from Aspire to MOHELA. Here’s what we found.
For some borrowers, their loans were being reported to the credit bureaus by Aspire as delinquent when they had in fact just been transferred to MOHELA. (To be fair, we’re not sure if this is a problem with Aspire, MOHELA, or both!) For other borrowers, their loans were being reported by MOHELA, which was their actual servicer, as delinquent when, in fact, the loans were current and recently transferred from Aspire.
Another thing that got lost in the transfer was documentation of payment histories. A few borrowers claimed they requested their payment histories on their loan for various reasons after the transfer had occurred from Aspire, only to be delayed or evaded entirely by customer service.
Repayment schedules and payment obligations went haywire in some cases. For example, a loan that was set to be paid off in less than a month suddenly was scheduled to be paid off in two years. For others, their monthly payment shot up by a huge factor due to an unapproved change in their repayment term.
Then, to solve the issue, they were put into forbearance as they were switched back to the original plan from the plan they never asked for in the first place. MOHELA does address on their website that changes in repayment terms after a transfer are possible, but poor communication and confusing rules seemed to throw many borrowers for a loop.
Confusion About Public Service Loan Forgiveness (PSLF)
These complaints are more complicated than just servicing issues, but they’re worth mentioning anyway. They may arise because of several factors: the confusing nature of the Public Service Loan Forgiveness program, the lack of borrowers’ knowledge about it, and MOHELA’s failure to inform borrowers properly. Here’s what we found:
One borrower was unsure how many, if any, qualifying payments they had made. They had already switched to a qualifying loan, but was unsure how many qualifying payments they had made. The borrower contacted the Department of Education, who told them they couldn’t find out and referred them to MOHELA.
The borrower then contacted MOHELA, who said they didn’t know and to contact the Department of Education. (That’s when they decided to enter a complaint with the CFPB.)
One borrower had made nine years’ worth of payments on a plan they were assured by MOHELA qualified for PSLF. They just realized at the time of their writing they were not making any qualifying payments.
Similarly, another borrower specifically asked to enroll in a PSLF-qualifying repayment plan, only to realize several years later they had not been. Yet another borrower was on the verge of making the full 10 years’ worth of payments when they discovered that none of them qualified for PSLF.
MOHELA And SoFi
MOHELA has started servicing some loans on behalf of SoFi. As you know, SoFi is one of our favorite student loan refinancing companies.
It's important to note that refinanced student loans are private loans, and so the rules that govern them are a bit different than Federal student loans. We haven't seen or heard any problems with regard to SoFi loans being serviced incorrectly.
However, as with any loan, you need to be vigilant. Nobody cares more about your money than you do!
Check Your Loans - MOHELA Login
A big part of keeping up with your student loans is making sure that you are following up and making sure everything is correct with your loans.
Check out your MOHELA Student Loans directly on their website for the most accurate information:
MOHELA Login: https://www.mohela.com/
If You Need More Help
Some of these loan servicer issues are frustrating because the borrower has little control over them. However, some of the issues we’ve described here can be mitigated or even avoided altogether with better borrower knowledge. We recommend you do your research thoroughly to make sure you’re getting the correct information. Your servicer may not always communicate the right way.
And while we didn’t cover all the available complaints about MOHELA, many of them are typical grievances against servicers like misapplication of payments and conflicting information. We want you to stay alert about the status of your loan and double-check the work of your servicer. With luck, you might not have any problems at all.
If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
They work with you to assess your loan situation and help you figure out the payment plan that fits you best.
Have you ever used MOHELA student loan servicing or experienced any of these issues with a loan servicer in the past?
Adam says
If someone could please get ahold of me from this site I would appreciate it as soon as possible. Concerning identity theft issues.
Robert Farrington says
Here are the steps to take regarding student loan debt and identity theft: https://www.thecollegeinvestor.com/20525/student-loans-identity-theft-someone-took-loans-name/
Kim B says
Mohela’s records state that my first disbursement was in 2008 or 2009, I would have to get my monthly statement to know which year it is, and though I tried to get them to change the date which was in 1999 of my first disbursement, they have kept it the same from the very beginning. Also, a few years ago, they began having me renew my loan, online, with the Government loan process and I still cannot figure out why they want me to do so. Though they finally began reporting how much I was actually paying which was income contingent so it was 0 at about the time they wanted me to start renewing my loan debt online with the Government, I am a little frustrated with them and how they have handled everything.
Linda says
Sofi sent my son’s college loan to Mohela and he paid his bill but they keep contacting him and us saying its late. They call but leave an automated phone system number to contact back. How long does it take for them to actually process a payment?
Something sounds really illegal if they are taking weeks to process a payment to purposely charge late fees.
Britni says
Hi Linda, I’m curious if the issue you reported has been resolved with your son.I am researching various lenders to consider refinancing and SoFi is on my list.
DJ says
The company charges interest on a daily basis. The loan may have fell behind due to various reasons i.e., late payment, forebearance, consolidation, not meeting min interest due (by the way interest is added to total). Advice talk to rep, involve federal consumer protection agency, force change through political pressure for transparency.
Andy says
I despise MOHELA. I never had a problem with Aspire. With MOHELA, it seems like all I get are referrals to other offices within the company, and no one ever actually answers my questions.
Currently, I’m dealing with PSLF misinformation. When I applied three years ago, I was told I had been disqualified from the program because I had put my loans in forbearance for a year. Now I’ve learned that’s not true, so I’m wasting more precious time trying to rebuild my payment history and whatnot. MOHELA has United Airlines-levels of customer service.
Robert Farrington says
Once you send in your PSLF loan certifications, your loans should transfer to FedLoan Servicing.
R. Sanchez says
Dealing with MOHELA is a nightmare. They have been servicing an old loan of mine, and everything was fine until I went back to school.
Near the end of my program, I took out another loan that was serviced through MOHELA. I paid off the loan within three or four months of finishing the program. My paperwork to take out the loan clearly states, I would owe no interest or loan fees if I paid within 120 days.
Well, MOHELA staff are under educated on student loan programs. I called it to make the payoff payment, and the staff had no knowledge of no interest or loan fees within the 120 day period. They insisted that I pay interest and loan fees in order to pay off the loan. It took over a dozen calls over a period of over a month to get the matter cleared up.
MOHELA works for me only if I don’t have to contact them.
Kaylene says
The same thing happens to me. I paid $4,000 towards a $21,000 parent plus loan within the first 120 days. However, they charged me interest on the entire amount and would not credit me any money back for loan origination fees. I explained it to them a dozen times – to no avail. I finally wrote a check for the remaining balance and paid them off. Now they will not even allow me to access my account online because they KNOW they owe me money! I paid $2,000 in interest and had the loan for a total of 7 months!
Kristin says
Hi! I am stuck in one of those spousal consolidation loans that they got rid of because they were so bad. In hindsight, it was a huge mistake but we had 5 loans, 1 was mine for $2000 and 4 were his for $8000 and so we consolidated into one payment. Later we divorced and he took the loan and I paid him for my portion through the divorce. Then he stopped paying but because he kept the house, I was never notified. He never paid child support (still owes me today and my kids are 24 and 26). So while we were living in poverty, they started garnishing my wages because the loan went into default. It took me about 5 years to get out of default because I lost my job a few times. All the while trying to fight and find a way to get them to go after him, I eventually decided to finish school myself, so there was a period that I was able to get it deferred while I was in school. So now, 30 years after I went to school and 25 years after we consolidated, I have paid just more than $30,000 towards a $10,000 loan and still owe $29,000. I realize that if I can’t get my ex to pay child support, he certainly isn’t going to pay his student loan but surely I’ve paid mine and his debt? Any ideas because so far, no one has had any!
Robert Farrington says
Negative, you’re in a bad spot. Was there an agreement in the divorce around child support and the student loans? I’d at least get a lawyer involved to sue him and get a judgement so maybe you’ll get paid back someday.
Beyond that, if you’re taking the loans on 100% anyway, you could look at refinancing into private loans to save on interest. This only works if you can afford ti.
This is why we hate spousal consolidation loans.
Gregory Pennington says
Mohela refused to allow me to pay down the principal. Instead, They paid my account in advance. I was a year and a half in advance. This became a problem when I applied for loan forgiveness. None of those advance payments counted towards my ten years of payments. So, I have an additional 18 months of payments to make to get my loan forgiven.
If you are part of loan forgiveness do not pay your payments more than 30 days in advance. They will not count them.
Robert Farrington says
Sounds like you fell into Pay Ahead Status. That’s not MOHELA’s fault, that’s the current law. Check out this article: https://thecollegeinvestor.com/19797/pay-ahead-status-loan-forgiveness/
Ken says
MOHELA has an abusive attorney who threatens handicapped people when they ask a simple question. They are all obama appointees. I am filing charges against the lawyers in Georgia. They must lose their contracts. I’m going to file a complaint with the Usdoe inspector general.
Danielle says
I don’t think Obama has anything to do with who MOHELA hires as staff lawyers. You can’t blame the “past” president for hiring preferences of a for profit company or for “all” lawyers in the entire state of Georgia…that’s just short of crazy. Lol
If you are having issues paying because of interest rates increasing, you may have the Trump administration to thank for that. Only a “current” president can affect the US interest rates.
Teneill says
I went to school for one semester which was supposed to be 100% by federal grants. I spent what seemed like an hour on the phone with a financial advisor explaining loans and how I would not need one only to find out someone took out a loan from mohela, which i never heard of btw, in my name. I have tried everything I can think of to get this fixed. I didn’t see a penny of this money but am stuck with 2 semesters of bills and threats for loans I never took out.
Robert Farrington says
If you never took the loan, you need to dispute it. Here’s a guide to start: https://thecollegeinvestor.com/20604/student-loan-lender-messes-up-credit-report/
Paul Edward Wagemann says
MOHELA is claiming I owe them over $1000 because they increased my payment by over $500 a month without giving me ANY notice what so ever. The last notice they gave me was in July of 2018. Last year, I gave them permission to access my IRS income tax records to verify my income. That was over a year ago, so when I found out about this $1000 debt they owe me, I went to their site and checked into my account. I immediately navigated the site to find how I could give them permission to access my IRS account AGAIN – even though I had already done it. But 3 days later and STILL the balance on my account shows that I owe over $1000. This is not accurate. I need MOHELA to update immediately.
Robert Farrington says
It sounds like you need to re-certify your income. You can do it on StudentLoans.gov as well.
Ray Bayer says
Paul: You can call MOHELA at 888-866-4352. You may also call me on my direct line at 314-568-8457. My name is Ray Bayer and I am the CEO of MOHELA. I am always happy to work directly with customers. Thank you.
Ray Bayer
Lucretia Gassner says
All I want to do is pay off my loan. Every time I think I have I owe more and more. Today I owe 3 cents. Can’t pay it on line can’t pay it by phone and of course they aren’t open today. So now when I do call them I will owe more and more. What a totally rip off. Everything Mohela can do to squeeze every penny from us. Scammers!
Robert Farrington says
It’s not just Mohela, it’s every loan. You have to follow a specific process to pay off your loan – https://thecollegeinvestor.com/15575/the-process-of-making-your-final-student-loan-payment/
Stephen Leon says
Robert, I have been paying off my daughter’s student loan with Mohela since 2000, although I have paid $312 a month for twenty years, I just looked it up and my balance is 33,300$. It seems that only $125 is paying off the principal monthly and the rest is interest. I believe the original loan was about $7000. What can I do. I will be 75 in a few months and live on fixed income. My daughter was recently separated from her husband and can’t afford to take over these payments even though the loan is in her name. Please add.
Robert Farrington says
What repayment plan are you on? If you’ve been on an income-driven repayment plan (which it sounds like you might be), the max length is 25 years. At that point, any remaining balance is forgiven. Read this: https://thecollegeinvestor.com/11856/secret-student-loan-forgiveness/
paul says
I’ve been told that the loan is forgiven but with a catch. Any remaining interest on the loan is to be reported as part of your annual income.
Robert Farrington says
That is correct for income-driven repayment – with a big catch. Most people in this scenario will be insolvent and have no tax liability as a result: https://thecollegeinvestor.com/22725/student-loan-debt-forgiveness-insolvency/
Paul says
In july of 2018 MOHELA stopped sending me email notices (or any communication at all) regarding my student loan account. I took a screenshot of my notice history on my online account, which can attest to this.
Sometime between October 2018 and January 2019 MOHELA must have changed the monthly amount of my repayment. I have been on an income contingent plan since 2002 and I have had the same charge every month for over 15 years. MOHELA did not inform me of any change in my monthly charge and therefore I continued to pay the same amount as I had paid every month since 2002.
In March of 2019 I applied for a pre-approval from my bank with the intent of purchasing a home. During that process I was informed that my credit score was too low and therefore my bank would not give me a pre-approval.
I immediately went to Credit Karma and found out that my credit score had dropped from the mid 600s into the 490s within the last month. I check the details and realized that MOHELA had reported I was over 90 days late on a payment in March of 2019.
I then went to the MOHELA website ( a website that I have had problems logging onto in the past) and it was then that I found out that MOHELA had increased my monthly payment by several hundred dollars, beginning sometime in late 2018 (a few months after they ceased sending me monthly email notifications). Looking into the details, I quickly realized that this increase did not accurately reflect the repayment agreement I had, so I filled out the proper paperwork and this mistake was easily corrected. My monthly payment was corrected to the same amount it had een for over 15 years.
However, in early June of 2019 I went house hunting again. I found the house I wanted so I logged onto Credit Karma to check my credit score and it is still in the 490s! So I then check with each of the three major credit companies, Transunion, Experian and Equifax and see that MOHELA was still reporting that I had a late payment. So I filled out the proper paper work to dispute this mistake.
In late June, I was informed that MOHELA had reviewed my dispute yet continued to claim I had a late payment.
Doesn’t MOHELA have a responsibility to inform customers when they raise their monthly charge? MOHELA did not do that. And now, because of MOHELA’s negligence I am unable to purchase the home and I’ve had to resign a lease and pay $1250 a month (that should have been going toward building equity in my home) for rent. I am an Air Force veteran who served 21 years. I taught grade school for 7 years. I have a wife and three kids and I’ve worked hard all my life to save up for a down payment on a home. But now my dream has been blocked by MOHELA’s negligence.
Robert Farrington says
Your payment wouldn’t change unless you were on an income-driven repayment plan. It sounds like this is the case – and likely you didn’t re-certify your income, making your payment default back up.
Mohela should provide monthly statements for your loan – your payment amount should be reflected on that. It sounds like you found the statements on your online portal.
I don’t have any answer for you except if you were late or missed a payment increase, you missed it. It’s not MOHELA’s fault if you signed up for online statements and never checked your statements.
Second, if you didn’t re-certify your income, you need to do that ASAP. It will reset your payment to 10 or 15% of your discretionary income.