Since January of 2023, Jason Evey has been calling into his wife’s student-loan servicer, MOHELA, to get the organization to process her debt forgiveness.
His wife, Abigail Linn, has been teaching since 2007 and at her current public school since 2009. During all of her teaching years, Linn has been making payments on her student loans. That would make Linn, who is currently teaching kindergarten, seem like an obvious candidate for Public Service Loan Forgiveness, a program that allows people working for the government and certain nonprofits to have their debt forgiven after making 120 payments — the equivalent of 10 years.
Linn believes she has made enough payments to receive debt-relief under the program, but right now her payment count on the government’s tracker is showing she’s only made 102 eligible payments. For some unexplained reason, none of Linn’s payments between 2013 and 2015 have been recorded, her husband says. So Evey, whose work schedule is more flexible than Linn’s, has been calling repeatedly to fix the problem. He’s even pulled the physical documentation of her loan-payment history and sent it to MOHELA and the Department of Education, to no avail.
In the meantime, payments resumed on federal student loans in October after a three-year pause. Evey’s household has received multiple bills during this time. The family paid them because they didn’t want to risk facing penalties. But Evey and Linn, who took on the debt to earn a master’s degree in teaching, believe she’s fulfilled her obligation and her remaining $14,800 in debt should be canceled.
“We feel that we made many payments, that we’re eligible for this program,” he said. “We don’t want to continue to make payments on a loan that we feel is going to be forgiven.”
Evey and his wife are not alone. At least 800,000 PSLF application forms are still waiting to be processed. Not all of those forms are for borrowers who have made 120 payments and are on the precipice of forgiveness. But even for those waiting to have their employment certified as eligible for the program, the delays can pose challenges.
Since MOHELA took over PSLF processing in the summer of 2022, the backlog of application forms has tripled, according to an analysis from the Student Borrower Protection Center, an advocacy group, and the American Federation of Teachers, a leading teachers union.
The period coincided with a surge of interest in PSLF as the Biden administration pledged to reform it. But the fact that borrowers like Linn have waited months for answers is unacceptable, advocates say. Compounding these borrowers’ challenges, according to SBPC and AFT, is a plan designed to push borrowers away from getting help on the phone and toward self-service on websites that lack crucial information.
The report comes amid months of complaints from borrowers following the return of student-loan repayments last fall, after a more than three-year pause. Borrowers have reported dealing with call-wait times that last an hour to reach their servicers, receiving incorrect bills, waiting on promised forgiveness, and more. Some have stopped paying their loans while they wait for servicers to work through these challenges. The government has confirmed these issues and taken some steps to remedy them.
But the report released Wednesday, which is based on documents obtained from MOHELA through public-records requests, provides more detail into why some borrowers are struggling, advocates say.
It’s not just that borrowers are facing challenges dealing with their loans, according to Persis Yu, the deputy executive director of SBPC, “but [that] they’re having problems and there’s no place to turn and, in fact, it’s designed that way on purpose.”
A MOHELA spokesperson referred to the report as “unfortunate and irresponsible,” in an emailed statement.
“False accusations are being disingenuously branded as an investigative report,” the spokesperson wrote. “This is nothing more than a PR campaign by these organizations. MOHELA remains committed to helping the millions of student-loan borrowers that we serve.”
Public servants face challenges accessing relief
Much of the report is focused on MOHELA’s approach to borrowers working toward Public Service Loan Forgiveness. The organization took over as the primary servicer for the program in 2022.
For years, borrowers who met the spirit of the Public Service Loan Forgiveness program struggled to actually have their debt canceled due to technicalities. The Biden administration made changes aimed at ameliorating those challenges; they’ve touted the results, saying that officials have approved $56.7 billion in relief for 793,000 PSLF borrowers so far.
But advocates, like SBPC and AFT, argue that MOHELA’s conduct has undermined these fixes. The organization has denied 5,000 borrowers’ applications to certify that their employment makes them eligible for PSLF, according to the report. Included among those borrowers are applicants whose employers should qualify them for the program, including state and local governments and public libraries, the report says.
Documents obtained by the advocacy organizations indicate that MOHELA may not have much of an incentive to approve borrowers’ applications. Under the organization’s contract with the Department of Education, MOHELA gets paid for processing a denial, according to the report. That means if the organization denies an application and ultimately approves it, they get paid twice, the report claims.
SPBC and AFT have been pushing the government and servicers to make PSLF more accessible for years, including through litigation against servicers previously involved with the program. Randi Weingarten, the president of AFT, said the report indicates that despite changes from the Biden administration aimed at making PSLF more accessible, borrowers are still facing obstacles in getting the relief.
“It feels like deja vu all over again, except that MOHELA promised to do better,” Weingarten said. “And they’re not.”
Carolina Rodriguez, the director of the Education Debt Consumer Assistance Project, which works with student-loan borrowers, said that some of her clients seeking relief under PSLF have “been in limbo for months.”
In some cases, her organization is seeing that borrowers submitted forms correctly but MOHELA is treating them as duplicates, not processing them nor updating their payment counts.
“If they come to us for help, it’s almost like in a lot of those cases, ‘You’re done, here’s the issue, you need to resubmit and you have to call MOHELA,’” she said. “It’s just stressful to tell someone, ‘You’re done, but I’m giving you a six-month timeline to get it all sorted out.’”
In other cases she encounters borrowers who would qualify for relief, but just submitted the forms incorrectly. In those situations, she counsels them on how to resubmit their forms.
“It’s sad that, in some cases, people think ‘I guess I didn’t qualify,’ without knowing it’s actually the form they submitted. There’s no trust in the system.”
Rodriguez and her staff have seen borrowers face other challenges in the process of obtaining relief under PSLF, including struggling to get MOHELA to pause their payments while they wait for forms to be processed. In addition, they’ve encountered borrowers who are likely eligible for debt forgiveness and have waited several months for their loans to be transferred from their original servicer to MOHELA, which is in charge of administering the program.
Some of these issues, including the incentive structure of the Department of Education’s contracts, are larger than MOHELA. The agency has made changes to speed up processing time for PSLF forms, including by implementing an e-signature on the documents, an Education Department spokesperson wrote in an email. In addition, as the Department implements new servicer contracts, it expects the processing of PSLF forms to “continue accelerating,” the spokesperson wrote.
“Public servants are entitled to debt relief under the law and the Department is committed to ensuring our nation’s teachers, nurses, and all public servants who qualify receive the forgiveness they have earned,” the spokesperson wrote in the email.
But advocates and some lawmakers say the government should be expecting more from MOHELA. In response to the report, members of Congress, including Senate Majority Leader Chuck Schumer, urged the Consumer Financial Protection Bureau and state attorneys general to investigate MOHELA and “pursue action to the fullest extent possible under the law.”
“In the student-loan system, on basically every issue, there’s lots of blame to go around,” Yu said. “At the end of the day, MOHELA has agreed to provide this service and they’re not providing it. Could [the Department of Education’s] instructions be better, could [the Department of Education] structure the contract better? Yeah, probably. At the end of the day, borrowers have rights and it is MOHELA’s job to deliver those rights, and they’re not doing it.”
The MOHELA spokesperson wrote in the email that the report “mistakenly asserts denied Public Service Loan Forgiveness for financial gain.” MOHELA doesn’t have the authority to process debt forgiveness until the Department of Education’s Office of Federal Student Aid gives it authorization to do so, “which can take months to occur,” the spokesperson wrote.
“Despite claims falsely made to the contrary, it is in MOHELA’s best interest that the borrowers we serve receive forgiveness when they are eligible,” the spokesperson wrote.
Encouraging borrowers to self-service online
The report focuses on issues beyond Public Service Loan Forgiveness. SPBC and AFT estimate that 3.5 million borrowers working with MOHELA have experienced a servicing issue since the return to student-loan payments. According to their report, MOHELA’s approach to its call centers is exacerbating these issues.
MOHELA had a plan to use “deflection messaging” as part of an approach to encourage borrowers to help themselves using various websites, instead of relying on information and help from call-center representatives, according to the report.
While it is possible for borrowers to research and apply for certain student-loan benefits and programs online, there are some tasks that can only be done through customer-service representatives over the phone. In addition, MOHELA maintained the policy of pushing borrowers toward self-service during periods when its website wasn’t fully functional, the report says.
The documents indicate that a plan to push borrowers away from customer-service representatives and toward helping themselves may not have been exclusive to MOHELA. In one document, MOHELA notes that the Department of Education’s Office of Federal Student Aid would be “providing messaging to servicers to help with coordinated call-deflection efforts and to promote self-service.”
The Department of Education spokesperson said that the agency has worked with servicers “ to outline strategies to more quickly answer borrowers’ questions if the answers are direct and readily available on FSA’s website. That in turn can help free up call-center capacity for the more complex issues and for borrowers who needed more detailed assistance.”
The MOHELA spokesperson said the organization was directed by the Office of Federal Student Aid to encourage borrowers to self-service whenever possible.
Still, it appears even officials at MOHELA were wary of the way the organization’s documents framed this strategy “I admit, I am a bit concerned about the phrasing ‘call deflection,’” MOHELA’s general counsel wrote in an email obtained by SBPC and AFT.
Scott Buchanan, executive director of the Student Loan Servicing Alliance, a servicer trade group, defended the approach of pushing borrowers toward servicer and government websites to deal with some issues.
“If you want to say that we’re trying to deny people service, that’s not at all what we’re trying to do,” he said. “Servicers are trying to reduce the demand on the system so we can help more borrowers. The accusation that that’s somehow nefarious is just a bunch of hooey. This is called customer service and that’s how it works.”
Meanwhile, Evey, who estimates he’s called MOHELA 25 to 30 times over the past year and a half, describes the organization’s customer service as “horrendous.” He said he’s waited on hold for hours at times before reaching someone and been told he’d receive a call back, but never received one. He’s been given different information from different customer-service representatives, including one who told him it would take 99 days to process a request for forbearance that would last for less than that amount of time.
“I’m so frustrated,” he said. “If I did my job like they’re doing their job, I’d be fired.”
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