Massachusetts Senator Elizabeth Warren has intensified her scrutiny of a major student loan servicer, MOHELA, accusing the company of hindering borrowers’ access to debt cancellation and mismanaging their monthly bills. Warren has called for the CEO of MOHELA to testify before Congress to address these issues.
In a letter addressed to Scott Giles, the CEO of MOHELA, Warren outlined concerns regarding the company’s performance since the resumption of student loan repayments in the fall, following a three-year hiatus due to the COVID-19 pandemic. The letter specifically highlighted MOHELA’s failure to provide on-time billing statements to borrowers, resulting in the withholding of over $7 million in pay by the Education Department.
Furthermore, MOHELA faces allegations from two student loan borrowers who claim the company delayed their applications for Public Service Loan Forgiveness (PSLF) and compelled them to make unwarranted payments. Warren asserted that MOHELA’s actions have exacerbated the challenges faced by student loan borrowers, particularly public servants seeking relief through the PSLF program.
Warren’s invitation for MOHELA’s CEO to testify before the Senate banking committee on April 10 aims to shed light on the company’s role as a student loan servicer during a period of significant transition in the federal student loan program. The senator emphasized the importance of understanding MOHELA’s performance and its impact on borrowers amidst ongoing confusion regarding the status of accounts, particularly regarding PSLF.
This latest move by Senator Warren comes amid broader scrutiny of federal student loan servicers, with other companies like Nelnet, Aidvantage, and EdFinancial also facing repercussions for failing to provide timely billing statements to borrowers. Despite efforts by the Education Department, many borrowers remain disillusioned, with some expressing frustration over being misled about their eligibility for loan forgiveness.
The call for a congressional hearing underscores the growing concern among lawmakers regarding the handling of student loans and the need for accountability within the loan servicing industry. Warren, along with other Democratic lawmakers, continues to advocate for greater oversight and consumer protection measures to ensure that borrowers receive fair treatment and access to the relief they are entitled to.
MOHELA has yet to respond to requests for comment on the matter, leaving borrowers and policymakers awaiting further clarification on the company’s actions and its implications for student loan borrowers nationwide.