MOHELA Review – Perhaps the Most Frustrating Servicer

Editor's note: As of February 27, 2024, we're hearing from readers en masse that MOHELA is not honoring Department of Ed guidance that no borrowers should have been asked to recertify before March 1, 2024. If you have been switched to the SAVE “level plan” amount, which is often in the thousands of dollars per month, submit a complaint at the FSA complaint center. We suggest recertifying to continue maintaining credit towards forgiveness. If your payment jumps up a lot, continue appealing via FSA and the Dept of Ed Ombudsman and there's a chance you could get a refund at some point. Persistence pays off.

What you need to know:

• Missouri Higher Education Loan Authority (MOHELA) was one of five companies awarded a contract by the Department of Education to service federal student loans in 2021 and beyond.
• MOHELA, a nonprofit provider, was one of only two pre-existing federal loan servicers (along with Edfinancial Services) to be given a new contract.
• MOHELA ranked seventh on Student Loan Planner®’s list of best federal student loan servicers and last among nonprofit providers.

Missouri Higher Education Loan Authority (MOHELA) is one of the “Big 4” federal student loan servicers, which also includes EdFinancial Services, Nelnet and Aidvantage. Although MOHELA is one of the more experienced servicers, its reputation continues to drop. In fact, we surveyed over 3,900 readers in January 2024, and MOHELA received the lowest reader rating.

Here’s what you need to know about MOHELA if it’s your new student loan servicer.

What is Missouri Higher Education Loan Authority (MOHELA)?

MOHELA student loan servicing is a public agency of the state of Missouri. It’s headquartered in Chesterfield, Mo., with two additional branches located in Columbia, Mo., and Washington, DC.

Student loans have been MOHELA’s primary focus from the start. It was established in 1981 for the express purpose of helping college students get access to student loans. Today, it has nearly 40 years of experience acquiring, financing and servicing student loans.

In 2011, MOHELA student loan servicing became the first nonprofit institution to service loans that were part of the Federal Direct Loan Program (FDLP). In addition to servicing over $357.3 billion of the federal student loan portfolio, it also services third-party private student loans.

MOHELA customer feedback

MOHELA’s customer feedback has been mixed. As a smaller nonprofit provider, it has historically received higher ratings than massive for-profit servicers. But it hasn’t always compared favorably to servicers of similar size.

However, since the major student loan servicer transition that occurred during the payment pause, MOHELA has been running into issues left and right.

For one, MOHELA incorrectly had borrowers recertify income for IDR repayment, directly going against the Department of Education's guidance (see editor's note at top of article.)

Additionally, borrowers are experiencing long wait times and poor customer service interactions as payments resume.

“Their customer service reps have no idea what they are doing and no knowledge about student loans. So frustrating to call and be on hold for hours and then try to get anything accomplished with a rep who has no idea what you are asking of them or talking about.”

January 2024 Student Loan Planner Reader Survey

Currently, MOHELA has a B rating with the Better Business Bureau and a 1-star (out of 5) customer review rating based on 117 reviews.

MOHELA could be better than other loan servicers… but not so far

If you’re being moved to MOHELA from one of the worst student loan servicers or because you're applying for PSLF, the change could benefit you.

“I ultimately think they'll be better than Navient and FedLoan Servicing… but that’s only if they’re properly staffed.”

Student Loan Planner® Founder Travis Hornsby

Hornsby previously said, “MOHELA uses the COMPASS software designed by the company that runs FedLoan (PHEAA). So, my guess is that if FedLoan gets fired at some point, MOHELA could have involvement with [the Public Service Loan Forgiveness program].”

And that is indeed what happened. MOHELA took over the PSLF program from FedLoan Servicing in July 2022. This expansion requires an increase in its workforce capacity and training to manage student loan payments — something that even borrowers recognize as a serious need.

“They need more staff to handle the extra workload. When I do interact with them, they seem kind and helpful though.”

January 2024 Student Loan Planner Reader Survey

What to do if MOHELA is your new servicer

With the servicer changes, your loan transfer should have been completed by 2022. If MOHELA is your new servicer, you should have received an email or letter from the company letting you know.

Your loan details and your repayment plan won’t change. New servicers are supposed to work together with your former providers to ensure that you receive proper credit for all prior monthly payments.

Once your account moved over, you’ll need to send your payments to MOHELA to remain in good standing. Follow their instructions on how to set up your online account and change your servicer information with your bank or credit union if you use an online bill-pay service to keep up with on-time payments.

Related: What To Do If Your Servicer Gets Fired

How to contact MOHELA about your student loans

You can reach MOHELA customer service in one of the following ways:

Phone support:

Toll Free: 1-888-866-4352
International: 636-532-0600

Business hours are Monday through Thursday, 7 am.- 9 p.m. (CT), and Friday, 7 a.m. – 5 p.m. (CT).

Mailing address:

MOHELA
633 Spirit Drive
Chesterfield, MO 63005-1243

Address for sending payments:

As of July 1, 2020, the payment address for MOHELA student loans has changed and is no longer publicly published. You’ll need to log in to your online account or call the company’s customer service number to get your payment address.

Email support:

MOHELA doesn’t currently provide an email address on its website for student loan borrowers.

Fax support:

MOHELA student loan borrowers can submit documents by fax using one of the following numbers.

Toll Free: 1-866-222-7060
International: 636-787-2790

Online chat support:

Borrowers can access chat support by visiting MOHELA’s contact page and selecting their state of residence and question topic.

MOHELA FAQs

Does MOHELA forgive federal student loans?

In most cases, no. Federal loans that are part of the Direct Loan program (FDLP) can only be forgiven by the U.S. Department of Education. MOHELA can, however, provide FFEL student loan forgiveness for Missouri students attending Missouri schools.

How long is the MOHELA grace period?

All federal student loan borrowers have six months after finishing or leaving school before they’ll need to begin sending student loan debt payments to MOHELA. Private student loan borrowers may need to send payments sooner or even immediately following loan disbursement.

Does MOHELA report to credit bureaus?

Yes, all federal student loan servicers, including MOHELA, report their borrowers’ credit history to the major credit bureaus (Equifax, Transunion, and Experian). MOHELA could report any late payment to the bureaus, but reporting is required for delinquencies of at least 90 days.

Does MOHELA have an app?

Yes, the MOHELA app is available on both the Apple App Store and the Google Play Store. Borrowers can use the app to view their account details and send payments.

Unhappy with MOHELA? Know your options

If you’re having problems with your MOHELA student loans and you aren't getting anywhere with their customer service, you have a few courses of action you can take:

• File a complaint. You can file a student loan complaint with the Consumer Financial Protection Bureau (CFPB) or complain directly to the Department of Education.
• Federal Direct Loan Consolidation. The Department of Education doesn’t allow borrowers to pick their student loan servicer. The only exception is during a Direct Loan Consolidation. If you’re looking to leave MOHELA and keep your eligibility for federal benefits, this is your best option.
• Refinancing with a private lender. Refinancing is one way to escape from MOHELA if you’re OK with losing federal benefits and have a strong credit score and income. This option can save you thousands of dollars with a lower interest rate and get you better service along the way. See if student loan refinancing is right for you.

If you’re unsure how to handle your MOHELA student loans, Student Loan Planner® can help. Our team of experts know the ins and outs of the student loan industry and have consulted on over $2.6 billion in student debt.

Plus, all of our advisors offer up to six months of email support after your call. Check out how the consultation process works and book a time that’s convenient for you.