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Media Press Releases Senate Hearing Sets Stage for Long-Awaited Oversight and Accountability of Student Loan Servicing Giant MOHELA for Failing Borrowers

Senate Hearing Sets Stage for Long-Awaited Oversight and Accountability of Student Loan Servicing Giant MOHELA for Failing Borrowers

Student Loan Expert And Borrower Advocate Persis Yu Will Offer Testimony; MOHELA CEO Scott Giles Declines to Publicly Testify

April 9, 2024 | WASHINGTON, D.C. — Tomorrow, Wednesday, April 10, the U.S. Senate Committee on Banking, Housing and Urban Affairs, Subcommittee on Economic Policy will hold a hearing entitled “MOHELA’s Performance as a Student Loan Servicer” where Deputy Executive Director and Managing Counsel Persis Yu of the Student Borrower Protection Center (SBPC) and others will offer testimony. 

MOHELA CEO Scott Giles formally declined his invitation to testify publicly and answer for his company’s widespread servicing failures, which harmed millions of borrowers during the return to repayment. Instead of answering to policymakers and the American public, the company offered to answer questions behind closed doors. 

Read full written testimony by Persis Yu, SBPC Deputy Executive Director and Managing Counsel, here:

This hearing follows the release of a joint investigation into MOHELA by SBPC and AFT, entitled The MOHELA Papers. The report exposed MOHELA’s scheme to deny millions of borrowers proper service and called on Congress and federal regulators to hold the servicing company accountable.

In response, SBPC Deputy Executive Director and Managing Counsel Persis Yu released the following statement:

“MOHELA’s executives made reckless choices that caused vast harm to borrowers and ultimately led us to this moment. Now that it’s time to answer for their greed and misdeeds, they’ve chosen to hide and shirk responsibility. Borrowers deserve so much better.

“Senator Elizabeth Warren and the rest of the Senate Subcommittee should not relent in their pursuit of accountability and continue to hold MOHELA’s feet to the fire until they get the answers they need to protect borrowers and bring about much-needed justice. Gone are the days when MOHELA’s failures go unchecked. 

“Rather than allowing the same awful student loan companies to rebrand as creatures of the federal government, we should pursue a strategy that accepts the limits of the existing system and seeks to move beyond the current era of privatization and abuse. MOHELA should be fired. Borrowers deserve more.”

Further Reading

The MOHELA Papers, a joint investigation into MOHELA by SBPC and AFT, is available at:

A copy of AFT and SBPC’s petition to ED’s Office of the Inspector General is available at:

A copy of the March 25, 2024 letter from MOHELA to SBPC is available at:

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

Background on The MOHELA Papers

In February 2024, AFT and SBPC released the results of a years-long investigation into the student loan servicing industry, highlighting previously unpublished records and communications produced by MOHELA under Missouri state open records laws (The MOHELA Papers). 

This investigation alleged that approximately 4-in-10 MOHELA customers experienced a “servicing failure” during the student loan system’s return to repayment—the period following the three-and-a-half-year-long pause on student loan bills, interest charges, and debt collection implemented as a response to the COVID-19 pandemic. 

Over this period, AFT and SBPC found that MOHELA engaged in a practice known as “call deflection”—directing customers away from MOHELA’s understaffed call centers towards its website and other so-called “self-help” options. Records contained in The MOHELA Papers demonstrate that MOHELA was aware that broad categories of borrowers would be unable to obtain adequate customer service if deflected away from a call center, and even found instances where borrowers were deflected to inoperative pages on the company website, but nonetheless pursued this strategy even as millions of borrowers experienced problems due to MOHELA’s servicing failures.

Immediately upon publication of The MOHELA Papers, Senate Majority Leader Chuck Schumer, Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Bernie Sanders, and Senate Banking Economic Policy Subcommittee Chair Elizabeth Warren issued a joint statement calling for oversight and government action to protect borrowers. Shortly thereafter, Senator Warren called for tomorrow’s hearing.

On March 25, 2024, MOHELA sent SBPC a supposed “cease and desist” that called for advocates to retract the landmark report while threatening legal action based on its allegations that The MOHELA Papers’ “tone… is false and misleading.” In doing so, MOHELA confesses to a range of problematic practices. In response to these confessions, AFT and SBPC have petitioned Inspector General Sandra Bruce to audit MOHELA’s performance under its federal contracts.


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 or follow SBPC on Twitter @theSBPC.

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