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.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
268 thoughts onMOHELA slow to process Public Service Loan Forgiveness applications, class action alleges
Hello,
My loans are now through Mohela and I did apply for PSLF. I have worked in public health and non-profit for the states over the years. When my loans were transitioned to Mohelo almost all of my paperwork was lost. I had to resubmit my PSLF forms from all of my different jobs (I’m a military spouse). They also said that the Tax ID number was incorrect for one of my jobs which was the same number for about 7yrs and not an issue with Fed Loan or the Department of Education when they were over my student loans. it is also the Department of Mental Health, so how could the Tax ID number be wrong or not looked up. I had resubmitted the information to which they said the same thing. I have never been late on my payments yet it says I have x amount of payments that do not qualify. However I’ve submitted all the documentation over the years and never had issues. Also my loans at one point were split in half between Naviant and Fed Loan without me knowing about it. It is frustrating because I have worked with a large case load, difficult clients for a miserable paycheck that isn’t even half of what I owe per year. I am so frustrated and poor and tired. My last job nearly killed me with the amount of clients I had, no work life balance, no care for the staff but I stayed because of the PSLF.
MOHELA is a mess. I have applied Multiple times with the same employer and was denied with all of them saying that I needed signatures which instead I gave them my W-2s to verify that I was working at that employer and was still denied. There is lack of communication when it came to PSLF Multiple people telling you different things when you call and then you’re on hold for hours and then you just give up because you’re on hold for so long. Something needs to be done and I had over 120 payments and my loans are still not forgiven due to the fact that they are not crediting me for PSLF.
Mohela, to me shouldn’t be handling our student loan accounts because when HR Electrically fill out the information on the amount of years working on the format Mohela get it all wrong and when you make a complaint on what the company not doing, Federal Student Aid send the complaint to Mohela and they not fully correcting the error plus when the employer makes a payment I can’t see it on the website nor do that company report updates to my credit report that student loans are being paid, and another thing isn’t right Mohela is adding increase while paying the student loans that was the one of the reasons Fedloan Service loan don’t have it anymore and now Mohela is doing the same thing. Plus don’t like how Mohela is real bad on counting for PSLF because I gotten 2 student loan in 2021 and I work for a local government for 20 years and it’s like I have to have my HR to fill out a form every 6 months for Mohela to update and that is stupid because once the form has been filled out Mohela should send emails asking if a payment been made or check if a payment been but they don’t. Tell me how I went from 119 counts than it went down to 116 and tell me that my student loans aren’t 10 years and I the student loans in 2021 and not going to have 120 my job has been paying from 2022 to Now. Mohela needs to be let go ED should be handling it, oh and last thing Mohela will have you waiting for hours on the phone to talk to someone that’s crazy.
MOHELA lost my special COVID pslf paperwork then denied it after working at an approved pslf university for the required amount of time stating I did not have enough qualifying months. Bunch of crap. Id like to be a part of the class action against them.
Yes I have applied. MOHELA is a MESS! They are TERRIBLE!!!
I have around 170 qualifying periods and Mohela shows I have 111. In the middle of two of my long employment periods they just simply do not give me credit for about 2 years, each, for a total of 4 years of state service they just inexplicably don’t give me credit for. I have call no less than 8 times in the last 2 years, and they can NEVER explain it. Whenever I call it’s at least an hour wait, and the representatives always seem completely lost and eventually say, “just give it time to adjust, and it will credit you with those periods.” I’ve been told that for over 2 years; it never adjusts and credits me for those periods I worked and paid. They told me to request a forebearance to ride out my time to get those other 9 periods THEY say I need. So I did that, and guess what happened the next month?? The month that I went into forebearance is now listed under “ineligible payments!” I asked that rep repeatedly was she sure that the forebearance periods will be credited to my periods served, and she said yes. I guarantee you that when I get my 9 periods in and call them, they’ll tell me, “oh those forebearance periods don’t count towards periods paid.” They are 100% doing these maneuvers to keep people in debt and not give them forgiveness when it’s been earned!