Student loan company MOHELA set to face investigation for mishandling of debt

Lawmakers are set to grill one of the biggest student loan companies in the nation during an upcoming congressional hearing.

The performance of the Missouri Higher Education Loan Authority, or MOHELA, will take center stage at an April hearing of a Senate banking panel subcommittee, according to Sen. Elizabeth Warren, D-Mass.

Advocates for student loan relief have accused the company of mishandling a program for public service workers. They also claim that MOHELA deliberately avoided answering customer service calls from borrowers facing student loan payments for the first time in over three years last fall.

Read more:Allegations of dodging calls and mismanagement rile major student loan company MOHELA

MOHELA has refuted the accusations of misconduct or negligence.

“It is regrettable and irresponsible that misinformation is being twisted to fabricate a false narrative in an effort to deceive the public,” a spokesperson stated last month in response to the criticism.

Nevertheless, Congressional Democrats remain skeptical. Warren, a progressive senator from Massachusetts with a keen focus on consumer rights, admonished the company for its actions.

“Your company has exacerbated the challenges faced by student loan borrowers through mishandling their return to repayment following the COVID-19 pandemic-related deferment on payments, interest, and collections,” Warren wrote in a letter to MOHELA’s CEO, Scott Giles.

Warren has invited Giles to testify at the hearing scheduled for April 10, though it remains uncertain whether he will participate. The company did not offer an immediate response when contacted on Monday.

Read more:MOHELA’s delays in sending billing statements lead to penalization after borrowers fall behind

The student loan servicer, also known as a servicer, has faced heavy criticism since the end of the pandemic-related pause on student loan payments in September. MOHELA failed to send billing statements to 2.5 million borrowers on time, according to the Education Department in October, resulting in a $7.2 million penalty.

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