Sen. Elizabeth Warren wants MOHELA (Missouri Higher Education Loan Authority) to answer for the problems student loan borrowers faced – including inaccurate bills and hourslong hold times on the phone – when the pandemic-related payment pause ended in the fall.
In a letter first shared with CNN and sent to MOHELA on Monday, the Democrat from Massachusetts asks CEO Scott Giles to testify before a Senate subcommittee on economic policy, which she chairs, on April 10. MOHELA manages more than 8 million federal student loan accounts and is one of several student loan servicers that the Department of Education contracts with to collect student loan payments from borrowers.
“Your company has contributed to student loan borrowers’ difficulties by mishandling borrowers’ return to repayment following the COVID-19 pandemic-related pause on payments, interest, and collections and by impeding public servants’ access to PSLF relief,” the letter said.
PSLF refers to the Public Service Loan Forgiveness Program, which wipes away remaining student debt after qualifying public-sector workers make 120 monthly payments. MOHELA is the only servicer that handles PSLF payments.
Student loan bills came due for more than 20 million federal student loan borrowers in October, after a more than three-year pause on payments and interest.
Bringing so many people into repayment at the same time was an unprecedented task, and industry experts expected the process to be bumpy.
Making matters even more complicated, lawmakers left funding flat for the Federal Student Aid office, which oversees the financial aid system, despite its bigger workload this year. Plus, Federal Student Aid was tasked last year with launching a new income-driven repayment plan called SAVE (Saving on a Valuable Education)…
Read the full article here
