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MOHELA Student Loans Review: 4 Biggest Complaints About This Servicer

Do you have a student loan serviced by MOHELA? If they weren't your original servicer, they might be now; FedLoan Servicing transferred all student loans they managed to MOHELA in 2022.

MOHELA has fewer negative reviews than other loan servicer complaints. However, there are common complaints that could cause you heartache in the future.

Here’s what you need to know.

What is MOHELA?

MOHELA is an acronym for the Missouri Higher Education Loan Authority. Their website is MOHELA.com. It's one of the largest nonprofit loan servicers in the United States. It's headquartered in St. Louis, Missouri, with additional offices in Columbia, Missouri, and Washington, DC.

MOHELA was originally formed in 1981 to service loans from the Federal Family Education Loan (FFEL) Program. Now it services both private student loans and federal student loans.

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Top MOHELA complaints from borrowers

In our refinancing survey, we surveyed readers on their experiences with student loan servicers. Among the 385 respondents, only seven individuals identified MOHELA as their federal student loan servicer. This is likely due to the fact that MOHELA previously had a smaller role in student loan servicing.

However, there are hundreds of MOHELA borrower complaints online, most of which fall under the four following situations.

1. PSLF issues

Many borrowers with U.S. Department of Education loans serviced by MOHELA pursued Public Service Loan Forgiveness (PSLF). The PSLF program is confusing for borrowers because of its stipulations. You need to stay on top of your progress to make sure you’re making qualifying on-time payments properly, while maintaining eligible full-time employment in the public or nonprofit sector.

Most MOHELA complaints deal with its lack of understanding of PSLF. Borrowers often receive bad information about student loan forgiveness programs. One borrower shared that she contacted MOHELA about setting herself up to qualify for PSLF. Years later, she discovered that none of her loan payments qualified, and she didn’t turn in the correct paperwork. She received different information whenever she spoke with a MOHELA customer service rep.

Another borrower made several phone calls to MOHELA, specifically requesting to be put on one of the PSLF-qualifying repayment options. The loan was eventually transferred to another loan servicer. The borrower found out that MOHELA set up the payments improperly. None of the monthly payments counted toward PSLF. The borrower estimated that MOHELA’s mistake cost them over $3,500 in extra payments.

These complaints are particularly concerning, considering MOHELA is now managing all PSLF accounts. Note that FedLoan Servicing has transferred its PSLF and TEACH Grant recipients to MOHELA.

2. Too many phone calls

Another common complaint about MOHELA is the number of phone calls borrowers receive. Most of these complaints are related to delinquent student loan payments.

According to one of our readers, he received constant phone calls, even if his student loan repayment was just a couple of days late.

Another borrower with loans serviced by MOHELA said, “My loan got about 9 days overdue. I owed them a $10 payment, and they called me multiple times, all hours of the day. I paid it, yet they still called for almost a week later with their auto calling robot crap, interrupting my work day, etc. It's ridiculous.”

Another reviewer said MOHELA employees started calling their in-law's house when the loan became delinquent by 21 days.

3. Issues with MOHELA student loan transfers

There are times when student loans get transferred to and from different loan servicers, as is the case now with loans transferred from FedLoan Servicing. When this happens, loan information can get lost or mixed up. It's happening to some MOHELA borrowers.

For example, one borrower had their student loans transferred to MOHELA from another servicer. They claimed there were a number of errors that occurred during the transfer. The biggest error was the total loan balance doubled from $100,000 to $200,000. Despite several calls to MOHELA to fix this, at the time of their complaint, nothing had been changed in their online account.

4. Customer service

A common thread with most complaints about MOHELA is their customer service. Common criticisms include borrowers being given bad or misleading information. They also fail to follow through on borrower requests.

One Student Loan Planner® reader said MOHELA’s customer service was nice, but the servicer didn’t initially apply an autopay interest rate discount. The borrower had to bring it to MOHELA’s attention.

When the PSLF waiver was ending, we saw some borrowers experience hold times over several hours long.

These types of customer service issues can be frustrating for borrowers. People plan their whole repayment plan around the advice they receive. It’s important to do your homework and not rely on information from your loan servicer’s customer service department.

MOHELA student loan: What can you do if MOHELA is your servicer?

Despite some borrower issues that resulted in negative reviews, MOHELA isn’t seen as poorly as other loan servicers. In 2022, the Consumer Financial Protection Bureau only received 118 complaints about MOHELA. However, the Better Business Bureau downgraded the servicer from an A+ in October 2022 to a B rating as of March 2023. The BBB also issued an alert for MOHELA, saying, “BBB received an increase in MOHELA complaints due to the Public Service Loan Forgiveness (PSLF) Program.”

If you're having issues, you can file a complaint directly with the MOHELA Ombudsman by submitting a formal request by mail to: MOHELA Ombudsman, 633 Spirit Drive, Chesterfield, MO 63005. You can also fax your complaint to 1-866-222-7060. (Note: MOHELA previously published an Ombudsman form on their website. However, this link appears to have been removed, and we've been unable to locate a new link to this form.)

If MOHELA is your loan servicer and you aren’t happy with their service, know that you don’t have to stay with them. At Student Loan Planner®, we can help you find the best way to repay your loans.

This could mean consolidating your loans to a new servicer with a Direct Consolidation loan. Another option is to refinance your loans through a private lender. Student loan refinancing allows borrowers to get a new loan term and potentially lower rates by taking out a refinancing loan with an online lender like SoFi or another financial institution.

As a disclaimer, be aware that you'll give up federal direct loan benefits, like forgiveness. Your credit score will also impact your rate. Each lender may offer a different repayment term and have unique eligibility requirements.

However, there are many repayment strategies to explore to ensure you're maximizing your finances.

The repayment of your student loans is one of the most important financial decisions you’ll face. You don’t have to put up with a bad loan servicer if you’re unsatisfied.

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  1. Quintin July 6, 2019 at 12:21 PM

    Using Mohela was the biggest mistake of my life and probably the dumbest thing I have ever done. The calls are insane and the customer service people never know what they are talking about and it’s as though they don’t even work for the same company.

    • Lisa August 13, 2019 at 3:47 AM

      I agree my worker is so incompotant. My loans have been discharged do to total and permentant disability. She refuses to mail me the documents that provide verification supporting the total disability discharge date and reason for discharge. Please advise.

      • Travis Hornsby August 15, 2019 at 8:19 AM

        Can you not log in to your studentloans.gov account and see if it shows any remaining debt? If it doesn’t you dont have anything to worry about

  2. Brent August 6, 2019 at 2:07 PM

    Hi Kevin.
    Great article.
    Which loan servicer would you recommend for those who are pursuing PSLF?


  3. Allen May 30, 2020 at 8:48 AM

    Hello Kevin,
    I would like to help my daughter who owes about 45K with a MOHELA loan. Since we pay (me) about 4K in interest each year I would like to pay it off. Any suggestions?

    • Travis Hornsby June 3, 2020 at 11:19 AM

      That’s a great idea to pay it off if you have that kind of excess funds laying around.

    • Creed L. Wait February 21, 2021 at 6:20 PM

      My experience with Mohela was that if I made a payment even one day late then nothing came off of the principal or interest portion of the loan. If you are one day late with a mortgage payment you are charged a $50 late fee and the remainder of the payment is still applied to principle and interest. Mohela uses a very odd accounting technique where if your payment is late the total amount owed is increased. I’ve put everything I had into my debt to and three times a month. Mine is now paid off. But I think that their accounting practices should be reviewed as possibly fraudulent.

  4. Christy Hoover June 26, 2020 at 4:18 PM

    No, you have to ask about their income – clue…some of ya’ll don’t do your homework……I have been able to keep mine since 2005, not by choice.

  5. Mary Hannah October 21, 2020 at 1:41 AM

    I don’t have a mobile device … which seems to be necessary to engage with MOHELA using the internet. .. MOHELA sent me a letter saying the form I submitted (the one they sent to me) is not the current version…. SO I wish they would just send their current, paper version…. Seems they try to obstruct, maybe provoke into default. I have paid all principal and $6,000.00 in interest, but… etc.. congress people allowed SallieMae to go public & interest compounded..

  6. Christina March 12, 2021 at 8:15 PM

    I was with ‘Direct Loans’ before they became Mohela. Regardless, I was told that after 10 consecutive years in public school teaching the rest of my student loans would be forgiven. (I’ve been at the same school now for 16 yrs). At the five year/halfway mark, I called to ask if I was on track to have my loans forgiven in 5 more years. I was then told that I did not and would not qualify for that program, but only after I had been paying THREE HUNDRED DOLLARS for the last five years. Amidst tears, I asked why even continue to pay that IDR (income driven repayment) amount then. When asked if I could get a lower payment, I was told no because I “made too much money” (I was & am a single, high school teacher). I was then convinced that I should just go into a contingency repayment plan where I STILL paid $300 a month. Years later (both in 2019 & 2020) when I applied for PSLF through FedLoans whereby you need to have made at least 120 payments, I was told I didn’t qualify (after TWELVE years of on time payments!) because the last five years worth of payments didn’t count towards the 120 because I was under a contingency plan instead of an IDR plan, which is exactly what I was on before Direct/Mohela switched me five years prior. It has ruined my life. I’m 40 years old and don’t qualify for a home in my area because my debt to income ratio is too high, and my student loans are listed as the primary reason. It has been the most discouraging, deflating, depression inducing aspect of my life. I’ve done everything in life the way it “should” have been done; went to college & did well, taught 17 years in a thankless career, been an athletic coach to countless children & adults, paid my bills on time, earned a phenomenal credit score…and I can’t get approve me for a home in the low 200’s. I cannot begin to express the amount of turmoil I continue to endure as I try to carry out my life in the manner that we all deserve to, and have EARNED. I am not a materialistic person. I need/want very little in life to feel genuinely happy, but financially, this single incident has kept me from that time and time and time again. I pray for the day someone tells me “it’s all over”.

    • Amy at Student Loan Planner April 5, 2021 at 1:13 PM

      I’m so sorry to hear you’re struggling with this. The federal student loan system has many flaws, making it nearly impossible to figure out. You’re certainly not alone and I think we can help. Travis and the team of consultants help borrowers navigate the path to PSLF all the time. We can analyze your loans and figure out what went wrong and create a solid plan to a repayment strategy that can help you buy a house and pursue other financial goals.

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