Skip to main content
Media Press Releases California DFPI Consent Order With MOHELA is Model for State Role in Protecting Student Loan Borrowers from Failing Servicing Companies

California DFPI Consent Order With MOHELA is Model for State Role in Protecting Student Loan Borrowers from Failing Servicing Companies

April 24, 2024 | WASHINGTON, D.C. — The California Department of Financial Protection and Innovation (DFPI) announced today it entered into a consent order with the Higher Education Loan Authority of the State of Missouri (MOHELA) for failing to timely provide contact information about the April 30 deadline for the Income-Driven Repayment Account Adjustment with California student loan borrowers with older loans.

In response, Student Borrower Protection Center legal director Winston Berkman-Breen issued the following statement:

“Today’s announcement is both a testament to the important role that states play in protecting student loan borrowers and an affirmation of states’ authority to supervise the private companies that service student loans. It also adds to the ever-growing list of borrower harm caused by the student loan servicing giant MOHELA.

“DFPI saw an opportunity to help borrowers take advantage of a once-in-a-lifetime chance to obtain student debt cancellation and affordable payments—and took it. Because of DFPI’s initiative, and despite MOHELA, over 265,000 California borrowers have been alerted to this opportunity. 

“When MOHELA refused to comply promptly with DFPI’s time-sensitive request for borrower’s contact information, it violated the state’s licensing authority over the company. The federal government has encouraged states to help them oversee federal student loan servicers, and we applaud California for answering its call and holding MOHELA accountable!”

###

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.

Join our mailing list Stay informed on the fight to protect Americans with student debt

  • This field is for validation purposes and should be left unchanged.