MOHELA Student Loans – Amount, Types, Eligibility, Key Features and Benefits

MOHELA Student Loans

The Department of Education confiscated $7.2 million from MOHELA in October, claiming that 800,000 borrowers fell behind on their MOHELA Student Loans as a result of the agency’s failure to provide timely billing notices to 2.5 million borrowers.

MOHELA Student Loans

The Student Borrower Protection Center and the American Federation of Teachers released a 47-page report on Wednesday outlining the accusations made against the Missouri Higher Education Loan Authority, or MOHELA. 

The report claimed that four out of ten MOHELA borrowers had experienced “servicing failures,” including payment errors, a backlog of unprocessed loan forgiveness applications, and applications that were incorrectly denied.

Two legal actions support the allegations. The U.S. Department of Education and MOHELA are the targets of a second class-action lawsuit filed in January, which claims “delays” from both organizations. The first, filed in December, solely names MOHELA as a defendant.

MOHELA Student Loans Amount

According to a press release from the Department, “MOHELA was found to have breached its fundamental duty by neglecting to provide billing statements to 2.5 million borrowers on time, some of whom received them only seven days before their due date.

The Department of Education stated in December that 750,000 borrowers had their debts erased through PSLF, stating that “at the beginning of the Biden-Harris Administration, only about 7,000 borrowers had received forgiveness through these programs.”

According to the statement, the agency has instructed the servicer to put all impacted debtors in forbearance until the problem is completely rectified and is withholding $7.2 million from Mohela’s October payment. 

Before accepting the government PSLF contract, MOHELA was home to nearly 2.5 million borrowers. However, after becoming the sole PSLF servicer, its portfolio grew to include around 7.8 million borrowers.

MOHELA Student Loans

How to claim the MOHELA Student Loans? 

To claim MOHELA student loans, checkout the listed details available below.

  • To find out if you qualify for federal loans, complete the Free Application for Federal Student Aid (FAFSA).
  • Get a financial aid award letter from your school, detailing eligible federal loans.
  • Review and accept the loan amounts you need, considering terms and conditions.
  • Fulfill entrance counseling online to understand loan terms, rights, and responsibilities.
  • To formally establish the lending arrangement, sign the Master Promissory Note (MPN).
  • MOHELA disburses funds to your school to cover tuition and approved expenses.
  • Repayment typically starts post-graduation; MOHELA provides details on plans.
  • Regularly check the MOHELA account for updates, and communicate if facing financial challenges.

Types of MOHELA Student Loans

MOHELA primarily manages federal student loans, which include:

  • Direct Subsidized Loans: These loans are need-based, and the government pays the interest while the borrower is in school, during the grace period, and in deferment.
  • Direct Unsubsidized Loans: Unlike subsidized loans, the interest on these loans accrues while the borrower is in school. But you may put off paying until after you graduate.
  • Direct PLUS Loans: These loans are available to graduate students and parents of dependent undergraduate students. Not all forms of financial help can cover the costs of higher education, but some can.

MOHELA Student Loans Eligibility 

Meeting these eligibility criteria ensures students can access MOHELA-managed federal student loans for their education. MOHELA student loan eligibility criteria include:

  • Must attend a school participating in federal student aid programs.
  • Must be a U.S. citizen, national, or an eligible non-citizen.
  • You must have a valid Social Security Number to proceed.
  • Male applicants aged 18-25 must be registered with the Selective Service.
  • Must meet and maintain academic progress standards set by the school.
  • Should not be in default on any federal student loans.
  • Must adhere to federal loan limits based on academic level and dependency status.
  • Submission of the FAFSA is required.

MOHELA Students Loan Key Features & Benefits

key features and benefits of MOHELA Students loan are as follows:

  • Competitive Interest Rates: MOHELA offers competitive interest rates on federal student loans, making education financing more affordable for students.
  • Flexible Repayment Options: Borrowers have various repayment plans to choose from, such as standard, extended, and income-driven repayment plans.
  • Loan Forgiveness Programs: MOHELA supports various federal loan forgiveness programs, such as PSLF and Teacher Loan Forgiveness. 
  • Grace Periods and Deferment Options: MOHELA understands the challenges students may face after graduation. Federal loans often come with grace periods, and MOHELA assists with deferment options for those facing financial hardships.

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