MOHELA Hit With Fresh Charges of Ongoing Student Loan Mismanagement

January 16, 2026 — Press Release

AFT Amends Complaint in Lawsuit Against Embattled Student Loan Servicer, Alleges MOHELA’s Misconduct Has Been Ongoing for Years 

WASHINGTON — The AFT amended its complaint in its lawsuit against the Higher Education Loan Authority of the State of Missouri (MOHELA) yesterday. In its amended complaint, the AFT details the many ways in which the student loan servicing giant has continued to harm student loan borrowers since the lawsuit was first filed in July 2024—in violation of consumer protection law. The AFT is represented by the Protect Borrowers, National Consumer Law Center (NCLC), and Selendy Gay PLLC.

The amended complaint includes new federal government data showing that, of the five main student loan servicers, MOHELA has by far the worst customer service. MOHELA borrowers wait about seven times as long as ED Financial borrowers to speak to a representative, and more than 50 times as long as borrowers with Aidvantage, CRI, and NelNet. Unsurprisingly, MOHELA sees the highest “abandon rate” of callers—while no other servicer sees more than 5% of callers give up while on hold, MOHELA has an abandon rate of more than 14%.

In response, AFT and its counsel issued the following statements:

“When we first sued MOHELA 18 months ago we exposed how it had abandoned its role to help borrowers pay down debt and instead redirected into a Kafkaesque rabbit hole of denial and delay to pad its own profits,” said AFT President Randi Weingarten. “Rather than fulfill its responsibilities, MOHELA abdicated and deflected them—and we were determined to hold them to account. But instead of working with us on a solution, they shamefully doubled down, fighting us at every turn to derail any attempt at accountability.

“Today we are refiling our complaint to reveal MOHELA’s illegal business practices, restate the harm inflicted on student borrowers, and document the time, effort and money that the AFT has spent to expose the misinformation and malfeasance at the company’s core. On behalf of the nation’s 45 million student borrowers, we are fighting for justice and fairness, and to stop illegality and deception. If any case underlines the need for robust consumer protections it is this one,” continued Weingarten.

“For years, AFT members and borrowers across the country have suffered as a result of MOHELA’s refusal to provide even the most basic customer service and accurate record keeping,” said Protect Borrowers Legal Director Winston Berkman-Breen. “In amending its complaint, the AFT seeks to demonstrate that the company’s historic failures are not one-offs that have been corrected, but are deeply systemic business decisions not to invest in doing its one job well: servicing student loans.”

“Student loan borrowers continue to pay the price for MOHELA’s systemic loan servicing failures. While time has passed since we filed our initial complaint, time itself could not resolve the harm MOHELA inflicts on vulnerable borrowers,” said Alpha Taylor, staff attorney at the National Consumer Law Center. “We continue to fight to hold MOHELA accountable and to bring relief to the millions of borrowers who are living the consequences of its servicing failures.”

Further Reading

• Lawsuit drop press release: Embattled Student Loan Servicing Giant MOHELA Hit with Groundbreaking Consumer Protection Lawsuit for Failing 8 Million Student Borrowers (July 22, 2024)
• Report: The MOHELA Papers (February 2024)

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