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
I am an RN working for Indian Health Services. I am with MOHELA and qualify for PSLF because I work for a tribal government. I don’t know what the status of my application is at this moment, I just know I am currently paying my loans. I would like to throw my name in the hat with the class action lawsuit if that is a possibility. I cannot stand the lack of service I have had recently from both of the loan service companies. My loans were transferred from NELNET to MOHELA last year, but both are still reporting to the credit agencies that I have active loans with them, which is showing my student loan debt as double what I actually owe. I have contacted NELNET, I’ve filed a BBB complaint, and I’ve sent a complaint to the Department of Education with nothing more than an explanation saying the Dept of ED has to report that NELNET can close my loans with them. My balance on the NELNET website shows a zero balance but they canot report that I have a zero balance to the credit reporting agencies? Sounds like a load of BS to me. Now for MOHELA. I have a PSLF application in with them but getting through to speak to someone about it… come to think of it, I don’t think I have yet to get through and actually speak to someone at their offices after multiple attempts. The entire process sucks.
I’m a nurse who worked all through the pandemic full time while going to school full time. I called MOHELA on 09/01/23 for help and advisement. All I wanted to do was apply for SAVE and lower my $536 payment. MOHELA wrongly advised me to consolidate all my loans so I would be eligible for all payment plans including SAVE. Well, that was complete misinformation because the Consolidation effectively disqualified me from ALL payment plans except one, and increased my payment to over $1100. It took 2-months to get that Consolidation Loan reversed by AidVantage. They finally reversed it 11/04/23, but MOHELA still hasn’t reversed it on their end. So I still have Consolidation Loans showing on my account that don’t exist. Plus, MOHELA has added erroneous duplicate Parent Plus loans to my account, an extra $43,000, that I did not borrow. Where is the fiduciary responsibility? I have been calling them for 5-months. I have filed numerous complaints with the CFPB (still pending), FSA, AidVantage, DOE and MOHELA. They just keep closing the complaints with no good explanation, keep saying it will be fixed, while piling interest on top of a fraudulent loan amount, putting my account in to administrative forbearance repeatedly and no one ever fixes anything. Is there a Class Action Suit for that? They’re mismanaging non-PSLF accounts too! Destroying peoples lives. I have 21-pages of type written documentation on this (so far…) and have spent countless hours on the phone, on hold, with no resolution, and no recourse. Can anyone help?
I had nearly finished making 120 qualifying payments when I reached out to Mohela to sort out an Income-Driven Repayment (IDR) plan. They persuaded me to merge all my loans to meet the requirements for Public Service Loan Forgiveness (PSLF) by December 2023. Now, after consolidating everything and considering all my PSLF-eligible jobs, they’re saying none of my work qualifies. So instead of having just one payment left, I’m suddenly expected to pay $430 every month, even though I’m currently not working.
I’ve tried contacting them for a month now, even filed a complaint, but nothing has changed. It doesn’t make sense why I’ve put on a regular payment plan after consolidating and not working, especially when I could have qualified for zero payments based on my previous year’s income. Now, my debt has skyrocketed to $84,000 instead of the expected $40,000, and it’s freaking me out. This mess is seriously messing with my plans to go back to school in the fall. If I can’t afford the $430 monthly payment for the next six months, it’ll mess up my chances of getting more loans to finish my master’s degree. I can’t even begin to describe how stressed out I am right now.
Mohela processed a partial forgiveness before processing my consolidation despite assuring me that the consolidation would go through first and that I would qualify for full forgiveness. This left me with over $90k remaining in loans. I have been fighting for months. Somehow I’ve gotten them to count 114 of my over 120 qualifying payments. I sent in the new form they wanted that said it needed a new signature. I also sent an updated one for my current employer. Rather than process these they marked them as duplicate. I can’t get any one to understand that processing these will put me well over the 120. My loans should be fully forgiven based on the PSLF guidelines. Yet they want me to pay over $1500 a month! This is ridiculous. Something has to change!
I applied for a new income-driven repayment plan in October 2023 and it showed that it was completed and “no further action was needed.” Then in February, I am being charged more because Mohela is saying I did not certify my income by the February deadline. Also, I requested my former employer be certified as a PSLF employer in 2015 and almost every year since then and was FINALLY told in 2023 that they were not certified as an eligible PSLF employer. That is EIGHT years wasted!!!! That isn’t fair! The employer IS a nonprofit, but not a 501c3, but falls under the other qualifications so it was always listed as “possibly” eligible. So I kept requesting that they either make it eligible or mark is ineligible but stop leaving it in this category that isn’t informative, especially if you are only accepting employers who are eligible during the 10 year repayment time to be PSLF qualified!
I retired base on the loan forgiveness. Now I have to make sacrifices to pay my student loan because my income has decreased. I first submitted documents to student Aide however my job submitted a digital signature. I was told that I need to resubmit which we did, there after no response I contacted and was told I need to submit to Mohela as a new application and could not use the application number which was given…. Had I known the this was going to happen I would not have retired because I’m scraping to pay my loan. Add me please
In February of 2022 I submitted my PSLF form under the October 2021 TEMPSLF program that President Biden put in place, which was suppose to count all my past payments. I consolidated my FFLE loan into a direct loan so I could qualify for this program so all my payments could be counted towards forgiveness. I have been paying on my loans since January 2008 and have not missed a payment. Everytime I call Mohela I get a run around. I have worked 31 years under the same employer and Mohela has approved my employment has but they refuse to qualify all my payments. Because they have not acted on my PSLF form I was forced to start paying on my loan which should have already been forgiven. Please add me to your law suit.
I have experienced delays in processing of my PSLF/Employment Certification form multiple times, at times up to 6 months. During that time, Customer Service would provide incorrect information about the status of my application. I have also had PSLF forms incorrectly marked as “completed,” without even being processed, which ultimately required resubmission and further delays in processing. Additionally, I have had payments incorrectly classified as ‘ineligible’ for PSLF, and despite filing a complaint with Federal Student Aid (FSA) about this issue, nothing has been corrected because the complaints are ultimately investigated by Mohela, and not FSA.
Mine was suppose to be rorfi en because of my disability, and never was..lease add me
I have been submitting my doc since I can remember and it taken forever. Add me please!