Higher Education Loan Authority of the State of Missouri facts for kids
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| Quasi-governmental | |
| Industry | Student loans |
| Founded | June 15, 1981 |
| Headquarters | Chesterfield, Missouri, U.S. |
| Owner | State government of Missouri |
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Number of employees
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625 (2013) |
The Higher Education Loan Authority of the State of Missouri, often called MOHELA, is one of the biggest organizations that handles student loans in the United States. Its main office is in St. Louis, Missouri.
MOHELA was started in 1981. It's like a special company that works closely with the government. For almost 30 years, MOHELA helped manage loans that the federal government guaranteed. After that program ended in 2010, MOHELA grew its business. By 2022, it was helping about 6.7 million students with their loans.
Contents
History
How MOHELA Started (1981-2019)
MOHELA was created by lawmakers in Missouri in 1981. Its first job was to manage student loans that the U.S. federal government backed. This was part of a program called the Federal Family Education Loan Program.
When that program ended in 2010, MOHELA started to take on more work in the student loan world. In 2011, the Department of Education asked MOHELA to help manage over 100,000 federal student loans.
During the Loan Pause (2020-2023)
During the COVID-19 pandemic, the U.S. government paused student loan payments. This meant students didn't have to pay back their loans, and no interest was added.
In 2020, the Department of Education chose MOHELA as one of the companies to help manage these federal student loans. Their goal was to give students better support.
In 2021, some student loans were moved from another company, FedLoan, to MOHELA. By July 2022, MOHELA became the only company managing the Public Service Loan Forgiveness (PSLF) program. This program helps people who work in public service get their loans forgiven.
By August 2022, MOHELA was managing about 6.7 million student accounts for the Department of Education. They also managed about 330,000 private student loans. This number grew to over 7.5 million by August 2023.
After Payments Restarted (2023-Present)
Student loan payments started again in October 2023. After this, the Department of Education found that MOHELA didn't send billing statements to many students on time.
Because of this, MOHELA was fined. Some news reports also said that MOHELA had problems with late bills and incorrect automatic payments.
In 2023, a report said that many students had problems with MOHELA's service. These problems included difficulties getting help when they called. In 2024, a teachers' union filed a lawsuit, saying MOHELA's operations were very confusing for students.
Important Issues
Fine in October 2023
In October 2023, the Department of Education announced that it would fine MOHELA. This was because MOHELA failed to send billing statements on time to 2.5 million students. These students' payments were restarting after a long pause.
As a result, the Department of Education held back over $7.2 million from MOHELA's payment. They also told MOHELA to give all affected students a temporary break from payments.
Lawsuits About Loan Forgiveness
In December 2023, some students filed a lawsuit against MOHELA. They claimed that MOHELA did not manage the Public Service Loan Forgiveness (PSLF) program correctly. These students said MOHELA didn't respond to their requests in time.
Another lawsuit was filed in January 2024. Students in this lawsuit claimed that MOHELA had not processed applications for the PSLF program fast enough. This was happening even though MOHELA had been in charge of the program for over a year.
In July 2024, the American Federation of Teachers (AFT) also filed a lawsuit against MOHELA. They accused the company of mismanaging millions of student accounts. They also claimed MOHELA prevented students from making payments and getting debt relief. After this lawsuit, some important government leaders asked the Department of Education to look closely at MOHELA's actions.
Types of Student Loans MOHELA Handles
MOHELA helps manage different kinds of student loans, including:
- Federal subsidized and unsubsidized Stafford loans
- Subsidized and unsubsidized Federal Direct loans
- Federal Perkins loans, which are based on a student's financial need
- PLUS loans, which are also part of the Federal Direct Student Loan Program
- Federal GradPLUS loans
- Federal student loan consolidation
Number of Loans Managed
MOHELA told the U.S. Senate that it was managing 2,464,028 student loan accounts on February 1, 2020. This number grew a lot, reaching 7,773,939 by August 3, 2023.
