SBPC Applauds Senate Banking Subcommittee; Urges Policymakers to Hold MOHELA Executives Accountable and Make Borrowers Harmed by the Student Loan Giant Whole
March 18, 2024 | WASHINGTON, D.C. — Moments ago, U.S. Senator Elizabeth Warren (D-MA), Chair of the Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Economic Policy, announced plans to hold an oversight hearing on the student loan servicing giant, the Higher Education Loan Authority of the State of Missouri (MOHELA). This announcement comes less than a month after the American Federation of Teachers (AFT) and the Student Borrower Protection Center (SBPC) released “The MOHELA Papers,” a years-long joint investigation of the company.
AFT and SBPC exposed a scheme by MOHELA to deny service to millions of working people with student debt—and called for urgent action from Congress and federal regulators.
From The MOHELA Papers:
“We also need leaders at all levels of government to step up to protect borrowers. Congress must hold hearings to ensure MOHELA’s executives are held accountable…MOHELA must be held to account and borrowers must be made whole. The return to federal student loan repayment has exposed the cracks in the federal student loan servicing system. Now is the opportunity for federal, state, and private partners to center the wellbeing of borrowers and to demand more from its servicers like MOHELA.”
The report highlights the urgent need for enforcement and further investigations given the now-extensive evidence that borrowers are paying the price for deliberate choices made by MOHELA, which recently signed a new multi-year servicing contract with the federal government.
In response, SBPC Executive Director Mike Pierce issued the following statement:
“The fish rots from the head down. For too long, MOHELA executives have systematically robbed and deceived borrowers in desperate need of help as MOHELA’s failures pushed borrowers further into the red. Chairwoman Warren will not turn her back as greed, recklessness, and incompetence drive millions into financial ruin. The hour of reckoning is coming and accountability is long overdue.”
Further Reading
The MOHELA Papers: www.mohelapapers.org
SBPC’s press release announcing The MOHELA Papers: Student Loan Giant Caught Deploying “Call Deflection” Scheme, Jeopardizing Relief for Millions
SBPC’s report series: Delivering Distress: How Student Loan Companies Cheat Borrowers Out of Their Rights
SBPC and AFT’s cease and desist letter to MOHELA: Missouri-Based Student Loan Giant Accused of Illegal Loan Servicing Practices, Scheme to Block Student Debt Relief for Millions of Borrowers
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.