In June, Pressley & Advocates Urged ED to Fire MOHELA Due to Ongoing Harms to Student Borrowers

Text of Letter (PDF)

WASHINGTON – Congresswoman Ayanna Pressley (MA-07) joined Senator Elizabeth Warren (D-MA), Representative Jim Clyburn (SC-06), and 55 of their colleagues in a letter to the Department of Education (ED), calling on the Department to conduct an analysis as to whether the Higher Education Loan Authority of the State of Missouri (MOHELA) has adhered to its contracts with the federal government, and if not, to consider terminating those contracts. In June, Rep. Pressley urged the Biden Administration to fire MOHELA following their repeated failure to perform basic loan servicing functions and ongoing harm caused by MOHELA to student loan borrowers.

This letter comes after two new lawsuits brought by the American Federation of Teachers (AFT) and Project on Predatory Student Lending (PPSL) allege that MOHELA has mishandled its student loan servicing responsibilities. 

“The new allegations raise even more concerns that MOHELA is wildly mismanaging its student loan portfolio and hurting borrowers—and suggest that more drastic ED measures are needed to protect borrowers and ensure MOHELA is fulfilling its contractual obligations,” wrote the lawmakers.

On July 22, 2024, AFT filed a lawsuit against MOHELA that included new findings alleging that MOHELA violated ED guidance, including by: 

1. Making unauthorized, automatic withdrawals from borrowers’ accounts—sometimes for incorrect amounts—without borrowers’ knowledge or permission, 
2. Failing to accurately and timely process Income Driven Repayment (IDR), Public Service Loan Forgiveness (PSLF), and refund applications—causing clear financial harm to borrowers, 
3. Improperly instructing borrowers enrolled in IDR plans to recertify their income and family size well in advance of the deadline to do so, meaning borrowers’ payments increased before they should have, and,
4. Actively misinforming borrowers about their debt relief options.

Additionally, California borrowers and the Project on Predatory Student Lending filed a separate lawsuit last week alleging that MOHELA systematically denied debt relief to borrowers who were the victims of school misconduct. 

“Under MOHELA’s federal contract, the company has received $1.1 billion to date to service student loans for 8 million borrowers,” wrote the lawmakers. “But what appear to be careless, blatant, and harmful violations of ED guidance exposed by the AFT and PPSL suits, suggest, once again, that MOHELA cannot be trusted to meet its contractual obligations as a federal student loan servicer.”

Already, ED has begun to hold MOHELA accountable by withholding $7.2 million in payments from the servicers and by announcing the transfer of one million borrower accounts away from MOHELA.

“Given the new allegations raised in the AFT and PPSL suits, along with the concerns we already raised to ED in our May 2024 letter about MOHELA’s billing errors, poor customer service record, and decisions to avoid public and private accountability at every turn, we request that ED immediately conduct an evaluation of MOHELA’s fulfillment of its contractual obligations as a servicer, share key data with our offices and federal and state regulators, and act quickly to apply corrective measures—including the potential termination of  MOHELA’s federal contract if such action is justified,” the lawmakers concluded. 

Joining the letter in the House are Representatives Adams (D-N.C.), Bonamici (D-Ore.), Bowman (D-N.Y.), Brownley (D-Calif.), Carter (D-La.), Casar (D-Texas), Chu (D-Calif.), Cohen (D-Tenn.), Dean (D-Pa.), DeSaulnier (D-Calif.), Doggett (D-Texas), Garcia (D-Calif.), Garcia (D-Texas), Goldman (D-N.Y.), Gomez (D-Calif.), Gottheimer (D-N.J.), Hayes (D-Ct.), Hoyle (D-Ore.), Huffman (D-Calif.), Jayapal (D-Wash.), Kennedy (D-N.Y.), Kim (D-N.J.), Lee (D-Calif.), McGovern (D-Mass.), Moore (D-Wis.), Norton (D-D.C.), Omar (D-Minn.), Pocan (D-Wis.), Porter (D-Calif.), Ramirez (D-Ill.), Raskin (D-Md.), Salinas (D-Ore.), Sánchez (D-Calif.), Sarbanes (D-Md.), Schakowsky (D-Ill.), Takano (D-Calif.), Thompson (D-Miss.), Waters (D-Calif.), Williams (D-Ga.), and Wilson (D-Fla.).

Joining the letter in the Senate are Senators Blumenthal (D-Ct.), Brown (D-Ohio), Butler (D-Calif.), Duckworth (D-Ill.), Hirono (D-Hawaii), Luján (D-N.M.), Markey (D-Mass.), Merkley (D-Ore.), Sanders (I-Vt.), Van Hollen (D-Md.), Warnock (D-Ga.), Welch (D-Vt.), and Wyden (D-Ore.).

A copy of the letter can be found here.

Rep. Pressley has been a leading voice in Congress urging President Biden to cancel student debt. Following years of advocacy by Rep. Pressley—in partnership with colleagues, borrowers, and advocates—the Biden-Harris Administration announced a historic plan to cancel student debt that stands to benefit over 40 million people.

• On August 29, Rep. Pressley issued a statement following the Supreme Court’s refusal to reinstate President Biden’s Saving on a Valuable Education (SAVE) student debt relief program.
• On August 9, 2024, Rep. Pressley joined Senator Warren, Representative Dean, and their colleagues urging student loan servicer Navient to reform its flawed process to cancel the private student loans of borrowers who attended fraudulent, for-profit colleges.
• On June 25, 2024, Rep. Pressley issued a statement on federal judges in Missouri and Kansas siding with Republican states to block portions of President Biden’s Saving on a Valuable Education (SAVE) student debt relief program. 
• On June 25, 2024, Rep. Pressley colleagues, borrowers, and advocates urged the Biden Administration to terminate the contract of federal student loan servicer MOHELA. Their calls follow MOHELA’s repeated failure to perform basic loan servicing functions and ongoing harm caused by MOHELA to student loan borrowers.
• On May 20, 2024, Rep. Pressley, along with Reps. Omar, Clyburn and Wilson, led their colleagues in urging the U.S. Department of Education to ensure its proposed student debt relief rule is implemented in the most effective and efficient manner possible for millions of borrowers.
• On May 1, 2024, Rep. Pressley issued a statement applauding the Biden Administration’s approval of student loan discharge for 317,000 borrowers who attended The Art Institutes, including over 3,500 borrowers in Massachusetts.
• On April 14, 2024, Rep. Pressley applauded President Biden’s approval of an additional $7.4 billion in student debt cancellation for 277,000 borrowers.
• On April 8, 2024, Rep. Pressley hailed President Biden’s announcement of new plans to provide student debt relief for tens of millions of borrowers across the country.
• On March 21, 2024, Rep. Pressley applauded the Biden-Harris Administration’s approval of $5.8 billion in additional student loan debt cancellation for 77,700 public service workers.
• On March 20, 2024, Rep. Pressley and Senator Elizabeth Warren led their colleagues in calling on federal agencies to end the practice of offsetting Social Security benefits to pay off defaulted student loans.
• On March 7, 2024, Rep. Pressley welcomed Priscilla Higuera Valentine, a first generation American, a proud union educator with Boston Public Schools and the Boston Teachers Union, and the daughter of a Colombian immigrant, who has received over $117,000 in student debt relief under the Biden-Harris Administration’s improved Public Service Loan Forgiveness (PSLF) Program, as her guest to President Biden’s State of the Union Address.
• On February 23, 2024, Rep. Pressley applauded the Biden-Harris Administration’s approval of $1.2 billion in student debt cancellation for nearly 153,000 borrowers nationwide, including $19.5 million in cancellation for 2,490 Massachusetts borrowers.
• On January 26, 2024, Rep. Pressley and Senator Elizabeth Warren (D-MA) led their colleagues in calling on the Secretary of Education Miguel Cardona to host a fourth session of the student debt negotiated rulemaking to consider relief for borrowers experiencing financial hardship. She applauded ED’s announcement that it would heed their calls.
• On December 11, 2023, Rep. Pressley testified at the U.S. Department of Education’s final hearing on student debt cancellation.
• On December 11, 2023, Rep. Pressley and Senator Elizabeth Warren (D-MA), along with Senators Chuck Schumer (D-NY), Bernie Sanders (I-VT), Alex Padilla (D-CA), and Representatives Ilhan Omar (MN-05) and Frederica Wilson (FL-24), sent a letter to U.S. Secretary of Education Miguel Cardona, urging him to leverage his existing and full authority under the Higher Education Act to provide expanded student debt relief to working and middle-class borrowers. 
• On November 30, 2023, Rep. Pressley emphasized the crucial role of the Consumer Financial Protection Bureau (CFPB) in protecting student loan borrowers from incompetent and predatory student loan servicers.
• On November 6, 2023, Rep. Pressley joined Attorney General Andrea Campbell, Mayor Michelle Wu, and Senator Elizabeth Warren (D-MA) for a clinic to help federal student loan borrowers access a temporary opportunity to get closer to Public Service Loan Forgiveness (PSLF). 
• On September 25, 2023, Rep. Pressley hosted a policy discussion with borrowers and advocates at which they renewed their urgent call for student debt cancellation with loan payments set to resume on October 1, 2023.
• On August 23, 2023, Rep. Pressley, Sen. Warren, and their colleagues led over 80 lawmakers in a letter to President Joe Biden, urging him to swiftly deliver on his promise to deliver student debt cancellation to working and middle class families by early 2024. 
• On August 22, 2023 Rep. Pressley applauded Governor Maura Healey’s plan to provide student debt relief for health care workers in Massachusetts. 
• On June 30, 2023, Rep. Pressley responded to the President’s alternative proposal to deliver relief under the Higher Education Act and called for swift and efficient implementation.
• On June 30, 2023, Rep. Pressley issued a statement slamming the Supreme Court’s decision to block President Biden’s student debt cancellation plan and calling on the President to use other tools available to swiftly cancel student debt.
• On May 30, 2023, Rep. Pressley filed an amendment to H.R. 3746, legislation to raise the debt ceiling, to protect student loan borrowers and preserve the Biden Administration’s pause on federal student loan payments.
• On May 24, 2023, Rep. Pressley issued a statement slamming Republicans’ harmful effort to overturn President Biden’s student debt relief, including his debt cancellation plan, the pause on student loan payments, and the expanded Public Service Loan Forgiveness (PSLF) program.
• On May 24, 2023, Rep. Pressley delivered a powerful speech in support of President Biden’s plan to cancel student debt, which would benefit millions of people across the country.
• On April 5, 2023, Rep. Pressley and Senator Elizabeth Warren wrote to the CEO of SoFi Technologies and SoFi Lending Corp calling on the company to answer for its lawsuits attempting to end the student loan payment pause and force borrowers back into repayment.
• On March 7, 2023, Rep. Pressley, along with Sens. Warren, Schumer, Sanders, Padilla and Reps. Clyburn, Omar and Wilson led a letter to the Biden Administration expressing continued support for President Biden’s student debt relief plan.
• On February 28, 2023, Rep. Pressley rallied with borrowers and advocates outside the Supreme Court to call on the Supreme Court to affirm the legality of President Biden’s student debt cancellation plan.
• On November 22, 2022, Rep. Pressley issued a statement applauding the extension of the student loan payment pause.
• On October 25, 2022, Rep. Pressley and Senator Warren toured communities across Massachusetts to celebrate the Biden administration’s student debt cancellation plan and help residents sign up for student loan relief.
• On October 12, 2022, Rep. Pressley joined parent borrowers and advocates for a discussion on the impacts of student debt cancellation on parents and families.
• On September 29, 2022, Rep. Pressley, along with Senate Majority Leader Schumer and Reps. Omar, Jones and advocates, held a press conference to call for swift and equitable implementation of President Biden’s student debt cancellation plan.
• On September 21, 2022, Rep. Pressley delivered a powerful speech on the House floor in which she heralded President Biden’s action to cancel student debt for millions of families in the Massachusetts 7th and across the nation. Watch the full video here.
• On September 12, 2022, Rep. Pressley and Senator Warren wrote to the nine federal student loan servicers to inquire about how they are providing borrowers with accurate and timely information about student loan cancellation.
• On August 24, 2022, Congresswoman Pressley issued a statement applauding President Biden’s action to cancel student debt.
• On August 10, 2022, Congresswoman Pressley and Senator Warren Massachusetts joined Massachusetts union leaders in Dorchester for a roundtable discussion on student debt cancellation.
• On July 18, 2022, Congresswoman Pressley delivered remarks at the American Federation of Teachers (AFT) national convention and renewed her calls for President Biden to cancel student debt by executive action.
• On July 8, 2022, Congresswoman Pressley with The Debt Collective hosted a virtual roundtable with student debt holders from all walks of life to highlight the intersectional burden the nearly $2 trillion student debt crisis has had on individuals and families. 
• On June 22, 2022, Congresswoman Ayanna Pressley, with Senator Elizabeth Warren and Senate Majority Leader Chuck Schumer, joined AFL-CIO and union leaders for a roundtable discussion on the importance of student debt cancellation for American workers.
• On May 20, 2022, Congresswoman Pressley applauded the Congressional Black Caucus’ (CBC) statement calling on President Biden to cancel student loan debt.
• On May 4, 2022, Congresswoman Pressley visited Bunker Hill Community College to celebrate the $1 million in federal community project funding she secured and continued her calls for President Biden to cancel student debt.
• On March 17, 2022, Congresswoman Pressley and Arisha Hatch, vice president and chief of campaigns at Color of Change, published an op-ed in Grio calling on President Biden to use his executive order authority to cancel up to $50,000 in student loan debt per borrower.
• On December 8, 2021, Congresswoman Ayanna Pressley, Senator Elizabeth Warren, and Senate Majority Leader Chuck Schumer sent a bicameral letter to President Joe Biden releasing new data about the adverse impact of restarting student loan payments and calling on him to act to cancel up to $50,000 of student debt.
• On December 2, 2021, Congresswoman Pressley delivered remarks on the House floor in which she reiterated her calls for President Biden to cancel $50,000 in federal student loan debt by executive action.
• On October 8, 2021, Representatives Ayanna Pressley and Ilhan Omar and their House colleagues sent a letter to President Biden and Secretary of Education Miguel Cardona urging him to release the memo to determine the extent of the administration’s authority to broadly cancel student debt through administrative action.
• On July 29, 2021, Congresswoman Pressley issued a statement reaffirming President Biden’s authority – and the urgency – to cancel student loan debt.
• On June 23, 2021, Congresswoman Ayanna Pressley, Senator Elizabeth Warren, Senate Majority Leader Chuck Schumer, and Congressman Joe Courtney led their colleagues on a bicameral letter to President Biden calling on him to extend the pause on federal student loan payments.
• On April 13, 2021, Congresswoman Pressley testified at a Senate Banking, Housing, and Urban Affairs Committee’s Subcommittee on Economic Policy hearing to examine the student loan debt crisis in our country.
• On April 1, 2021, Congresswoman Pressley, along with Senator Elizabeth Warren and Massachusetts Attorney General Maura Healey, held a press conference calling on President Biden to tackle the student loan debt crisis.
• On February 4, 2021, Congresswoman Pressley, along with several Democratic House and Senate leaders, led their colleagues in reintroducing a bicameral resolution outlining a bold plan for President Biden to tackle the student loan debt crisis. 
• On December 17, 2020, Representatives Ayanna Pressley, Ilhan Omar, Maxine Waters, and Alma Adams introduced a resolution outlining a bold plan for President-elect Joe Biden to cancel up to $50,000 in Federal student loan debt for student loan borrowers.
• On December 10, 2020, Congresswoman Pressley was in Yahoo Finance urging the Biden administration to cancel student debt, stressing the impact on Black borrowers.
• On May 8, 2020, Representatives Ayanna Pressley, Alma Adams, and Ilhan Omar, led 28 of their colleagues and sent a letter to House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy calling for the universal, one-time, student debt cancellation of at least $30,000 per borrower in the next round of COVID-19 relief legislation.
• On March 23, 2020, Representatives Ayanna Pressley and Ilhan Omar introduced the Student Debt Emergency Relief Act, legislation that provides immediate monthly payment relief for federal student loan borrowers.
• On March 17, 2020, Congresswoman Ayanna Pressley and Senator Elizabeth Warren were on The Hill calling on congressional leadership to include student debt cancellation in the next coronavirus relief package.
• On October 11, 2019, Congresswoman Pressley introduced legislation – the Ending Debt Collection Harassment Act – to protect consumers from abusive debt collection.
• On July 17, 2019, Congresswomen Pressley introduced legislation – the Student Borrower Credit Improvement Act – to provide much needed support to private student loan borrowers with a pathway to financial stability by helping them improve their credit.

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