‘Fire MOHELA’: President Biden urged to cut ties with disastrous student loan firm as millions are plagued with errors

MOHELA should be ‘fired’ as student loan servicer, angry lawmakers and campaigners have demanded, amid mounting reports of widespread failures.

Members of Congress, advocacy groups and student loan borrowers held a press conference in Washington, D.C., on Wednesday to demand the federal government terminate its contract with the company.

They are calling for the Missouri Higher Education Loan Authority – also known as MOHELA – to be suspended for its mismanagement of millions of student loan accounts.

Borrowers have complained about nine-hour wait times to get help, delayed and lost paperwork and miscalculated payments.

One of the most troubling problems some borrowers face is having debts suddenly appear on their accounts out of nowhere – even though they thought they had been paid off or forgiven.

Poor customer service has left concerned graduates trying for months to find out if the debt is actually owed, or if it is a system error.

Frustrated activists on Wednesday called on the Biden administration to hold the company “accountable.”

Until May 1, MOHELA was the sole administrator of the Public Service Loan Forgiveness (PSLF) program – which was a key feature of the government’s debt forgiveness initiative.

The PSLF program, created in 2007, writes off the remaining balance of borrowers who work in the public sector or government after ten years of eligible repayment.

MOHELA became the sole administrator of the program in July 2022. But the program will be managed internally by Federal Student Aid going forward – with the transition taking place this summer.

The administrator has been widely criticized for the way he has handled the program — and for managing student loan payments, which restarted last October.

The Department of Education withheld more than $7 million from the company in October 2023 after it failed to send timely billing statements to 2.5 million borrowers, meaning more than 800,000 people were delinquent on their loans .

Congresswoman Ayanna Pressley joined campaigners from the Student Borrower Protection Center, the American Federation of Teachers and the Debt Collective in the campaign on Wednesday.

She told the crowd: ‘This is outrageous. It is a serious injustice. We now call on the administration to do justice to the borrowers and dismiss MOHELA.

‘The stories are heartbreaking, infuriating and have become far too common. These stories are not just statistics, these are lived experiences of our family members and our friends.

“MOHELA has dodged responsibility while recklessly expanding its portfolio of borrowers.”

Congressman Greg Casar criticized the administrator’s management of the PSLF program.

“That is not the way we respect our teachers, our public defenders, our public servants and our young people,” he said.

Senator Ed Markey also called for MOHELA’s resignation. He said he had heard of borrowers who had been harassed by debt collectors for loans they had already paid off, and of borrowers who were concerned about the choice between paying rent or making loan payments – only to find out that the administrator had billed them incorrectly.

Thomas Gokey, organizer and co-founder of Debt Collective, told the crowd how he had been put on hold by the servicer for nine hours in an attempt to get answers about his loans.

He criticized the Biden administration for “forgiving MOHELA instead of canceling debt.”

“Joe Biden restarted our student loan payments — he didn’t have to do that, but he did — and now he claims he ‘fixed’ the student loan system,” he said.

“The truth is, the student loan system has never been more broken than it is today and MOHELA is the main reason.”

It comes as a former employee alleged that all call center agents at MOHELA were told to keep concerned customers on hold for at least 15 minutes before they could transfer them to a supervisor.

The anonymous employee, who is in their late 20s and lives in Kentucky, said they were subcontracted by a staffing agency to work for the MOHELA call center.

“Representatives receive very minimal and spotty training and are expected to work effectively under high pressure,” they told DailyMail.com. ‘There was no individual training.’

Often borrowers’ queries were complex, but call center agents were instructed to handle everything in one go without transferring the call if possible, they alleged.

“We’re talking hundreds of thousands of dollars for some of these people, and most of that is because they don’t know where it comes from. And we can’t tell them because we don’t know either,” they said.

“From what I have seen from within, I would have to say that there is a lot of incompetence up the chain at MOHELA and also at the Ministry of Education.”

Call center representatives go through an extensive training process and receive support in responding to customer queries, a MOHELA spokesperson said in a statement.

“Claims about a company policy that requires a representative to put someone on hold for 15 minutes are false,” she added.