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'Fire MOHELA': President Biden urged to cut ties with disastrous student loan firm as millions are plagued with errors
MOHELA must be 'fired' as a student loan servicer, furious 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 DC on Wednesday to demand the federal government terminate its contract with the company.
They insist that the Missouri Higher Education Loan Authority - otherwise known as MOHELA - is axed for its mismanagement of millions of student loan accounts.
Borrowers have complained about nine-hour long wait times to get help, delayed and lost paperwork and miscalculated payments.
One of the most distressing issues faced by some borrowers is having debts suddenly appear on their accounts out of nowhere - when they believed they had been paid off or forgiven.
Poor customer service has left anxious graduates spending months trying to get to the bottom of whether the debt is genuinely owed, or if it is a system error.
Members of Congress , advocacy groups and student loan borrowers held a press conference in Washington DC on Wednesday to demand the federal government terminate its contract with the company. Centre is Congresswoman Ayanna Pressley
Frustrated campaigners on Wednesday called on the Biden administration to hold the company 'accountable'.
Until May 1, MOHELA was the sole servicer of the Public Service Loan Forgiveness (PSLF) program - which has been a major feature of the administration's debt forgiveness initiative.
The PSLF program, which was created in 2007, writes off the remaining balance of borrowers who work in public sector or government jobs after 10 years of eligible repayment.
MOHELA became the sole servicer of the program in July 2022. But the program will in future be managed in-house by Federal Student Aid - with the transition happening this summer.
The servicer has faced widespread criticism for its handling of the program - and for the managing of student loan repayments restarting in October last year.
The Education Department withheld over $7 million from the company in October 2023 after it failed to send timely billing statements to 2.5 million borrowers, which meant 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 at the event on Wednesday.
She told the crowd: 'This is outrageous. It's a grave injustice. We are now calling on the administration to do right by borrowers and to fire 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 evaded accountability while recklessly expanding its portfolio of borrowers.'
Congressman Greg Casar criticized that the servicer's management of the PSLF program.
'That isn't 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 to be axed. He said he had heard from borrowers who had been hassled by debt collectors for loans they had already paid off and borrowers who were facing the anxiety of deciding between paying rent or paying loans - only to find out they had been billed incorrectly by the servicer.
Thomas Gokey, organizer and co-founder at Debt Collective, told the crowd how he had been kept on hold for nine hours by the servicer to try and 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's going around claiming that he has 'fixed' the student lending system,' he said.
'The truth is the student loan system has never been more broken than it is now and MOHELA is the primary reason.'
It comes as a former employee alleged all call center workers 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 worker, who is in their late twenties and lives in Kentucky, said they were subcontracted out to work for the MOHELA call center from an agency.
'Representatives are given very minimal and spotty training and expected to be able to effectively work under high pressure,' they told DailyMail.com. 'There was no individual training.'
Often the queries from borrowers were complex but call center agents were instructed to handle everything in one call without transferring escalating the call if possible, they alleged.
Frustrated campaigners on Wednesday called on the Biden administration to hold the company 'accountable' (Pictured: President Biden and Secretary of Education Miguel Cardona)
Thomas Gokey, organizer and co-founder at Debt Collective, showed the crowd a screengrab of how he was kept on hold for nine hours to try and get answers about his loans
Senator Ed Markey joined the call to 'fire MOHELA' at Wednesday's event in Washington DC
'We're talking about hundreds of thousands of dollars for some of these people, and the majority of that being in interest that they don't know where it came from. And we can't tell them because we don't know either,' they said.
'Seeing what I saw from the inside, I would have to say there's a lot of incompetency higher up the chain at MOHELA and also at the Department of Education.'
Call center representatives go through an extensive training process and receive support to respond to customer inquiries, a MOHELA spokesperson said in a statement.
'Claims of a company policy that require a representative to put someone on hold for 15 minutes are false,' they added.