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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269 thoughts onMOHELA slow to process Public Service Loan Forgiveness applications, class action alleges
I have applied several times, in my own and with the assistance of my HR Benefits Department. My experiences have ultimately lead me to question, ” is PSLF really a thing?”
I have sent in my paperwork 3 times over the last 2 years only to have them state they have not been able to certify my work history! I don’t have 15 years in public service but 12 years with previous public service elsewhere. It is so frustrating because u can wait on the phone forEVER just to try to talk to someone who still knows nothing!
I am waiting for them to review my employment which says it could take to 3 months. A few of mine are pending 28 payments for verifying employment yet I’m stuck paying until they verify.
I was part of a lawsuit for the school providing incorrect information and loans should have been dismissed. I submitted during COVID the PSLF app just in case the ruling didn’t go through and got transferred to Mohela that split my loan into two with separate interest rates. Then labeled my loans being from a Jr college instead of the school in lawsuits. Took off a couple thousand only from lawsuite then shoved me into the saves program with no explanations or answers.
I worked for a NPO for 3 yrs 3 months full time, a NPO Church group for 8 months part-time, and a NPO University for 10 months part-time. NOTHING was considered to deduct my $180k graduate student loan. MOHELA even increased my repayment percentage to 8% interest from 2.6%. On top of it all when you owe that much and are 59.5, no one will hire you.
I submitted my PSLF and TPSLF. I was transferred from Navient to MOHELA within 90 days of qualifying for forgiveness and MOHELA screwed up so severely that consolidation turned into 9 loans with individual interest rates, forgiveness extending for months with no answers as to why, then my loans disappeared with no warning/notification/letter, and when my year came up to re-certify my employment they reenrolled my in the SAVE program with threats that my payment was increasing. I despise this company, this department of education for “awarding” them a contract they could not support, and for the politicians who are continuously changing the rules for qualifications to the detriment of those of us who are trying to do the right thing and make a darn payment, have relief granted, or give up. OVER IT!
I reapplied for PSLF because of a technicality and have been waiting since August to hear.
I’ve been working in public service for 15 years and my student loans should be forgiven but Mohela is not certifying my previous employer and not letting me know why.
Nobela is also denying employment verification forms. Mine was denied because they said it wasn’t a wet signature when it clearly is a wet signature. I’ve been calling weekly to rectify it and I’m told that they will reprocess in 3 to 5 business days. It’s been almost a month since I received the letter stating it was denied and a month since I started calling customer to fix the problem. Apparently, other people are experiencing similar denial based on signatures. Very frustrating, time consuming and stressful.
Yes I did