Spotlight on Student Loans:
PSLF Pursuers Receive New Servicer: MOHELA
As FedLoan/PHEAA Exits Federal Student Loan Business, MOHELA Takes Over
In the middle of 2021, FedLoan—the branch of PHEAA that services federal student loans, including those for all borrowers pursuing Public Service Loan Forgiveness—announced that they would not renew their contract with the Department of Education.
Borrowers served by FedLoan were left scratching their heads, with no clear direction or inkling of who their servicer might be in the future. Although FedLoan promised to continue servicing loans until a “smooth transition for borrowers” could be effected, it’s taken almost six months to announce a replacement. At long last, just in time to kick off the new year, it was announced that the Higher Education Loan Authority of the State of Missouri will take over servicing the federal student loans for those pursuing PSLF.
What’s Next for Borrowers with FedLoan & MOHELA?
Although federal student payments aren’t set to resume until May 1st, the Dept. of Ed. is keen to transfer FedLoan’s borrowers as soon as possible. If you haven’t already, you will receive a notification from the Dept. of Ed. 15 days before your loans are transferred from FedLoan to MOHELA. It can take up to 10 days after the transfer is complete for your loan details to be available.
Please note: Your loan amounts, interest rates, and terms remain exactly the same—the federal government still owns your loans, MOHELA is just the servicer and cannot change them. Once the transfer is complete and all the info is available, MOHELA will contact you to let you know and invite you to create a new user account on their website.
Borrowers with federal loans who are not pursuing PSLF, but are served by FedLoan, may be transferred to a different servicer—such as Aidvantage, Edfinancing or Nelnet. The process, however, should be about the same.
If you have any questions about your student loan transfer, or anything else related to repayment or PSLF, please do not hesitate to reach out!
If you’re pursuing Public Service Loan Forgiveness and you haven’t met with us yet, schedule your free 15-minute Discovery Session to find out if you qualify for PSLF, or what you can do if you don’t.