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
Please add me, I have applied for PSLF and borrowers defense and have been left hanging for both.
I received an email from Mohela with an apology for the delay in notification.
I got a letter from MOHELA that part of my loans were forgiven in August 2023. I could finally buy a house without the additional enormous debt and student loan payment ( over $2000 per month) or so i thought. 8 months they send a letter apologizing that the forgiveness was in error and all my previous debt is back and they miscalculated how many of my 130+ payments actually count towards PSLF. It’s insane! I made a financial decision based on this information and now I’m stuck with paying for a mortgage and student loans
I have been dealing with MOHELA for quite some time. They have yet to forgive the “second half” of a student loan that was to be forgiven back in August of 2023. I am being forced to make payments on this loan. Sometimes, my statement is not available until 1 day prior to the due date. When I call and ask about this, MOHELA representatives tell me that they are still “waiting on the final loan adjustment” to go through, and once that happens, the loan will finally be forgiven.
I am current on hold, yet again, waiting to talk to a representative. My hold time is only 59 minutes though…so, no problem, right? * Sigh
Please add me, I’ve been a public school teacher for over 20 years AND I’ve applied for PSLF and the partial forgiveness programs and never received either one! Also, I find it peculiar that as soon as the President announced student loan forgiveness, my account was SWIFTLY transferred to MOHELA.
Add me, I had 3 years nonprofit and 3 years government before the pandemic and I was in the pslf program since taking over they removed my deferment and put me on an idr which is completely incorrect and I can never get anyone on the phone
I have been with a non-profit for 10 years, Mohela has put some of my payments on deferment Stating they are not eligible when they are. Some are even in December and they admitted it on a call and never will correct it never answer my messages sent over 5 or my calls get transfer transfer transfer transfer
I didn’t get the amount of refund I was told by Mohela representative and was the amout shown in the Mohela portal. I was told and shown over 2000.00 would be my refund I was issued a 700.00 check.
Add me.. public service since 2012 and still waiting
Same! My service dates are incorrect, the payment tracker indicates I’ve met the 130 payments, and counting. However, no response back from Mohlea over 60 days since submitting the documents. This is extremely frustrating!
I am a fifteen-year, public school teacher and still at it! I have been applying for the PSLF since I was eligible- since Mohela took over my loans; Everything has come to a standing halt. My loans are not inclusive of my all of my loans and my employment dates are incorrect, despite the facts, that I have contacted them repeatedly. When the Biden order came in to place, my teaching partner who has been teaching and paying loans for less time than I have, ALL of her loans have been completely forgiven. We went through the Mohela process at the same time and submitted at the same times. This is ridiculous at this point and I still cannot get any response. Please, add me to this inquiry.