MOHELA PSLF class action lawsuit overview:
- Who: Spencer Morgan, Francis Novak and Rowena Koenig filed a class action lawsuit against the Higher Education Loan Authority of the State of Missouri, known as MOHELA, as well as the United States Department of Education and its secretary, Miguel Cardona.
- Why: Morgan, Novak and Koenig claim MOHELA failed to process and render decisions in a timely manner for student loan forgiveness applications submitted by borrowers enrolled in the federal Public Service Loan Forgiveness program.
- Where: The MOHELA class action lawsuit was filed in Missouri federal court.
The Higher Education Loan Authority of the State of Missouri (MOHELA) is unreasonably slow to process and render decisions for student loan borrowers enrolled in the federal Public Service Loan Forgiveness (PSLF) program, a new class action lawsuit alleges.
Plaintiffs Spencer Morgan, Francis Novak and Rowena Koenig claim that, despite servicing the PSLF program for more than a year before student loan payments resumed on Sept. 1, 2023, MOHELA has failed to process and render decisions on pending PSLF applications in a timely manner.
“In some instances, the PSLF applications have been sitting for over a year and MOHELA has still not rendered a decision,” the MOHELA class action states.
The PSLF program allows federal student loan borrowers working in public service to qualify for loan forgiveness after making 120 qualifying payments — the equivalent of 10 years of payments, according to the MOHELA class action. The program was created by a bill signed into law by President George W. Bush in 2007, with the intention of easing the financial burden for individuals to work for federal, state, local or tribal governments, the U.S. military, or in certain nonprofit fields.
The contract for servicing the PSLF program was awarded to MOHELA starting in the summer of 2022, with the switch coming during a student loan repayment pause put in place as part of COVID-19 pandemic relief efforts, according to the MOHELA class action.
The United States Department of Education and its secretary Miguel Cardona are also named as defendants in the class action lawsuit and accused of breach of contract.
Borrowers allegedly forced to make payments on loans that ‘should have already been forgiven’
Morgan, Novak and Koenig want to represent a nationwide class, New York class and California class of everyone who has submitted applications for PSLF forgiveness to MOHELA that the company has not yet processed or rendered a decision on.
“As a result of MOHELA’s delays, as well as the delays of the Department of Education and Secretary Cardona, those enrolled in PSLF are now forced to make payments on loans that should have already been forgiven,” the MOHELA class action states.
Morgan, Novak and Koenig claim MOHELA is guilty of unjust enrichment, negligence, breach of fiduciary duty and breach of contract, and of violating the New York Student Loan Servicers Act and the Fair Debt Collection Practices Act, among other laws in California and New York.
The plaintiffs are demanding a jury trial and requesting injunctive and/or declaratory relief along with an award of actual, general, special, incidental, statutory, punitive and consequential damages for themselves and all class members.
The U.S. Supreme Court ruled last summer that President Joe Biden could not forgive federal loans and that his administration had overstepped its authority with its $430 billion student loan forgiveness plan.
Have you submitted an application for PSLF forgiveness to MOHELA? Let us know in the comments.
The plaintiffs are represented by Amy Collignon Gunn and Anthony G. Simon of The Simon Law Firm PC and Joseph G. Sauder, Matthew D. Schelkopf, Joseph B. Kenney and Juliette T. Mogenson of Sauder Schelkopf LLC.
The MOHELA PSLF class action lawsuit is Morgan, et al. v. Higher Education Loan Authority of the State of Missouri d/b/a MOHELA, et al., Case No. 4:24-cv-00147, in the U.S. District Court for the Eastern District of Missouri.
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268 thoughts onMOHELA slow to process Public Service Loan Forgiveness applications, class action alleges
My loan qualified in March 2023, bit I was not notified of forgiveness until October 2023.
I submitted my Expanded PSLF, then had to do it again when I was required to consolidate with Fedloan. And was then required to do it AGAIN when it transfered to Mohela. It’s been sitting for a year. The last thing I was told was when fedloan wanted 10 years of my tax returns Sent in to them. Now mohela is saying I need to drive to each of my previous employers and have them sign the PSLF forms. I am also on the SAVE payment plan, with 0 for payment amount but my account has said since October 2023 that it is in Administrative forbearance and my payments aren’t due until 1/1/2040. No one can ever tell me what is going on with my loans, I have been gaining almost 900$ a month in intest per mo th since October, which I had read wasn’t supposed to happen. Just submitting a question on Mohelas site says it will take 90 days for a response. It’s just a giant mess and no end or answers in sight.
They set the date that far only because they are processing them in the order they’re coming in that’s all it gives them time to process with you having to do a PSLF all over again.
I have been working for a non profit government job for 17 years, but am told that I have no payments towards forgiveness.
I have applied for PSLF
I have as well
I applied over a year ago and my loans got transferred to MOHELA. Ever since it’s been problems with my account, they didn’t have me enrolled in the right income driven program and now when I ask for status on my loan and what is counting towards my forgiveness, they tell me I have no payments information. My loans are not supposed to incurring interest but it is this company is a joke and no help.
I have, answers to my queries were severely delayed or never came including my last question asking why my repayment plan was changed from PSLF to an income based plan I never asked for.
You have to he on an income driven plan to qualify for PSLF..not a standard plan. You can also go on stidentaid.gov to change your plan at any time.
My PSLF application was submitted in October 2022 originally. Loan payment status missing from 2013-2017. Currently holding at 99 eligible payments and continue to receive conflicting information from MOHELA and USED.
Yes, I have as well.
I applied well over a year ago and it has been much of the same. Many different stories from so many different people. I was finally placed on a forbearance and I have been told that a decision about my loans being forgiven will come in the next 60 days. Believe me when I say I’m not holding my breath as I have heard much of the same for the past 14 months.
I have MOHELA and they really dont know what they are doing i was so lost on the PSLF program that i am on and been told so many things.. I am still on foreberance
I’m having a great deal of issues with them. I talked to him on the phone and they tell me one thing and then I get emails telling me that what they said was the exact opposite of what was recorded. Positions that I have worked in in the past that should qualify and show up on the program as qualifying they tell me do not qualify and that I have to have all kinds of proof that it is impossible to do cuz the business is no longer around. They’re doing everything they can to run me in circles and it’s very frustrating.
I was in a 10 year loan forgiveness and they have not done it since it was sent to Mohela! It is messing up my credit!