MOHELA is a student loan servicer that has been around for more than three decades. It services loans under the Federal Family Education Loan (FFEL) and Direct Loans programs. As a servicer, borrowers make their payments directly to MOHELA and direct any questions or concerns to MOHELA’s customer service.

MOHELA works to make managing student loans simple for borrowers. Rather than ignoring or putting off student loan debt, there are different ways of working with MOHELA to make the process much less painful than it could otherwise be.

MOHELA does not offer student loan refinancing or private student loans. You can see the best student loan refinance lenders here or the best new student loan companies here.

Benefits of Working With MOHELA

If hardship presents itself to a borrower, there are options available with MOHELA. It is best to work with them rather than ignore the problem. Ignoring the issue can cause damage to credit, serious delinquency, and a mess that is difficult to come back from. When you work through the issue with MOHELA, here are the benefits:

  • You can find a solution that will work for your current situation. Those solutions may include forbearance, deferment, or entry into an income-driven repayment plan so you can better afford repayment.
  • Credit doesn’t suffer when a deal is worked out.
  • There is no threat of garnishments or liens when student loan debt is immediately brought under control.
  • The loan is paid off faster through an arrangement versus allowing the loan to go into arrears.

MOHELA gives its borrowers a lot of tools to use. Its website, for instance, has all the tools needed to monitor the status of the loan. Simply go to the website, create an account, and everything from the balance to being able to make a payment is right there. The site is mobile-friendly, so loans can be checked out on the go.

Also, it’s important to know how MOHELA applies monthly payments. When a payment is made it first takes care of the outstanding fees and the interest that has accrued between payments. If you plan on paying your loans off early, you will have to provide instructions to MOHELA. The default setting for the company’s payment system is to apply any extra payments to the following month’s bill. If you don’t want this to happen, you will have to submit those payment instructions to customer service.

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MOHELA in the News

MOHELA was in the news in 2017 for adding 365 jobs to its workforce of 530. The company currently services nearly two million loans, so the manpower is needed. The company services $39 billion of the country’s student loan debt.

MOHELA also made the news for protesting an announcement by Betsy DeVos that student debt would be collected under a single portal. There were three loan servicers selected as finalists in the bid. The announcement stated that the chosen loan servicer could hire other servicers as subcontractors to help manage the debt, which would mean they could retain business. However, the memo was rescinded by DeVos due to inconsistency in the objectives.

Because MOHELA and other servicers aggressively protested the move to one platform operated by one servicer, a revised servicing model was presented that put collection methods back to the way they used to be. The idea is to not give preference to specific companies so there won't be a monopoly when it comes to the federal portfolio.

Overall, MOHELA has made an impact on the student loan industry because it does well to work with its borrowers. This is important since the amount of student loan debt in the U.S. hit $1.45 trillion in 2017. The goal of any servicer is to obtain payment for the debt but to do so in a way that isn’t so taxing to borrowers that they’re unable to pay it back.