MOHELA is a company that helps people with their student loans. They recently discontinued their phone app, and we want to know why and how it affects you.
MOHELA stands for Missouri Higher Education Loan Authority. It’s a nonprofit group that deals with the money side of many student loans. The government chooses nine companies like MOHELA to work with students who have federal loans. MOHELA also takes care of some private student loans.
The government checks if these companies are doing a good job, like making sure students pay on time. MOHELA is doing really well in these checks. As of December 2020, lots of students with MOHELA are paying on time, and very few are late.
Because MOHELA is doing a good job, the government is giving them more work. In March 2021, MOHELA got 18% of all new federal student loans, which is more than any other company got.
Now, about the MOHELA app. On March 14, 2024, MOHELA decided to stop using their app. We’re not sure why, and it might be important for you.
So, to sum it up, MOHELA helps with student loans. They’re doing well, but they stopped their app, and we’re figuring out why and how it affects you.
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How MOHELA Manages Your Student Loan Repayments
When you want a federal student loan for school, the Education Department gives the money to your school’s student aid office. After that, MOHELA or another company will take over to manage your loan. You don’t get to pick who does this.
Once it’s time to pay back your loans, MOHELA does a few things for you:
- Sends you bills and helps with other services.
- Works with you on how you want to repay, like considering your income.
- Answers your questions about your account.
- Helps with tasks such as combining loans, reducing interest rates, forgiving loans, or pausing payments for a while.
- All these services are free. You can contact MOHELA or check your account without any charge.
- Since MOHELA gets assigned 20% of new federal student loans, many people end up dealing with them. They handle everything from giving out the money to getting the final payment. You might be a MOHELA customer for a long time.
Other companies also do this job, like Granite State (GSMR), FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., HESC/Edfinancial, Navient, and ECSI.
What Are The Possible Reasons For Discontinuing MOHELA App?
- Apps need updates, and it might have been easier for them to focus on their website.
- Not many people were using the app, so they decided to close it.
- They should make things simpler by having everything on their website.
What This Means for You?
After March 14, you won’t be able to use the MOHELA app anymore. Instead, you’ll have to go to their website to see your loan information. Here’s what you need to know:
Use the MOHELA website (mohela.com) to check your loan balance, make payments, and see repayment options.
Without the app, you won’t get reminders. So, set up calendar alerts for payment dates.
Get used to the website. Look for loan details and contact info. If you need help, MOHELA’s customer service can assist you.
It’s a change, but with some adjustments, you can still manage your loans smoothly.
What Is Happening With MOHELA?
MOHELA is making changes to how they handle student loans to make things better for you, the borrowers. If you have loans with MOHELA, don’t worry; they’re not selling them. MOHELA will still take care of your loans even after they switch to the new system.
Soon, MOHELA will get in touch with you about moving your loan account to their new system. This will happen over the next few months, during winter and spring. Before your account moves, they’ll give you a heads-up about 15 days before. After the switch, MOHELA will let you know when everything is done, and your loan info is in the new system. You’ll also get notices from the U.S. Department of Education before and after the switch.
MOHELA Mishaps: Why Are People Upset with Student Loan Forgiveness?
Two people, Jennifer Joy and Misty Thomas, are not happy with MOHELA, the group handling student loan forgiveness for public servants. They say MOHELA keeps making mistakes with their applications. This program is for people who work for the government or certain nonprofit groups for 10 years and make payments on time, and then their student loans can be canceled.
Jennifer and Misty made all the needed payments and applied to cancel their loans in August 2022. But MOHELA didn’t respond. So, they tried again a year later, and still, no response. Even though they were supposed to get their loans canceled, MOHELA told them to start paying again after a break due to the pandemic.
Now, Jennifer and Misty are upset because they did what they were supposed to, but MOHELA is making them wait and pay more. They filed a case against MOHELA, saying it broke the rules and treated them unfairly.
MOHELA is the company in charge of this loan forgiveness program, and they are not doing a good job. The government says it won’t accept mistakes that stop people from getting the help they deserve. This problem has been going on for a while, and even some lawmakers are saying MOHELA is not keeping people informed about their applications. MOHELA blames a lack of money and resources for the issues, but people want what was promised to them.
MOHELA Mistakes: What Is the Education Department Doing to Fix Them?
The Education Department found that the group in charge of student loans, called MOHELA, made big mistakes. They didn’t send bills on time to many people, and that caused a lot of folks to fall behind on payments. Because of these errors, the Department decided not to give MOHELA $7.2 million for October. They also told MOHELA to pause things for those who were affected until everything was fixed. Even during this pause, it will still count as progress toward loan forgiveness.
The Department also discovered that some people got the wrong bill amounts, and others who were waiting for a decision on their claims were forced to start paying again. To fix this, everyone facing issues will get a break until things are sorted out. And, during this break, it will still count toward loan forgiveness.
The Department is doing this to make sure people don’t face problems because of these mistakes. They also want to make sure the group handling the loans is responsible for what they do. The Department will keep an eye on them and take more steps if needed.
MOHELA Account Update: What Happens If You Miss Payments?
MOHELA wants to talk to you if your account needs updating. They’ll share details about repayment plans and ways to lower or delay your payment. Remember, if you’re late, there might be a fee. The U.S. Department of Education doesn’t charge fees for late payments on Federal Direct Loans. Being late could also affect your credit score as it might be reported to credit agencies.
Even if you’re using Auto Debit, missing manual payments before automatic withdrawals start could make your account overdue.
If you fail to make your student loan payment or if you’re late, your loan could end up in default.
During the On-Ramp Period after the pandemic pause, if you miss a few payments, they’ll put your loan on hold for those months. Here’s what that means:
Your account will be updated and won’t be considered overdue. They won’t tell credit agencies about missed payments, but they can’t control how they’ll handle it. Your loans won’t be sent to collection agencies. But remember, you’ll still owe interest for the months you missed, and your monthly payments might go up to cover it.
What You Can Use Instead Of MOHELA?
Here are a few options that you can use instead of MOHELA for managing your student loans. Let’s check them out:
- FedLoan Servicing: A loan servicer approved by the U.S. Department of Education that manages federal student loans.
- Navient: Another federal student loan servicer that assists with loan management and repayment.
- Great Lakes Educational Loan Services: Provides loan servicing for federal student loans, helping borrowers with repayment plans.
- Nelnet: Offers student loan servicing and payment technology for educational institutions.
- AES (American Education Services): A federal student loan servicer that helps borrowers manage and repay their loans.
- Discover Student Loans: Provides private student loans and offers options for refinancing existing loans.
- SoFi: A financial company that offers student loan refinancing and consolidation services.
Before choosing an alternative, it’s essential to research and compare their services, interest rates, and customer reviews to find the best fit for your needs.
Final Words
MOHELA surprised its users by discontinuing its phone app on March 14, 2024. They didn’t say why, but now people have to learn new ways to manage their student loans. If you used the MOHELA app to check your money or pay, it’s different now. MOHELA says to use their website. Maybe they discontinued the app to make the website work better, or not many people were using the app. Now, borrowers can still do important things on the MOHELA website, even if the app is gone. It’s important to learn new things, like saving the website in your favorites, setting reminders, and looking around the website. That way, it’s not too hard to change, and you can still manage your loans.