By coinnews 
00:00 Speaker A
The Higher Education Loan Authority of the State of Missouri, or Mohila, which handles the federal student loans of 6.8 million borrowers is under investigation by multiple state attorneys general over alleged mismanagement. Here with more on this report, we’ve got Jordan Weisman. Jordan, what do we know about the allegations against the firm?
00:28 Jordan Weisman
We’ve only got kind of the big outlines of what’s being investigated right now. But this kind of thing could be a very big deal. For context, uh several years ago, a very large state attorneys general investigation ended up essentially bringing down Navient, which was then the biggest student loan servicer in the industry. Um and of course, everyone, you know, know everyone who has had a student loan has had to deal with a servicer has probably at some point had some sort of customer frustrate service frustration with them. Um Mohila currently gets the worst marks on customer service and on a lot of other performance measures of any of the current servicers in the industry. And what I’m told is that uh the states are investigating a lot of issues that involved the return to repayment after the pause um when the Biden administration began collecting monthly payments again in 2023. Things like botched billing, late bills, miscalculated payments, um messed up paperwork, things along those lines. Also maybe some things related to the public service loan forgiveness. Some of this investigation may also parallel the uh uh se the several class action lawsuits that have been filed against Mohila in recent years by borrowers.
02:33 Speaker A
So as Mohila is under investigation, what’s that stake here for borrowers?
02:43 Jordan Weisman
Well, uh it could be quite a lot. I mean, if, you know, Mohila gets in trouble with the states and there is some sort of legal action, uh they could be getting money returned to them. Um if this gets really bad for Mohila, um who knows, there might be a possibility it gets driven out of the industry. Um but that’s real, you know, like Navient was. But that’s really kind of getting a few steps ahead. This is still a a you know, investigation in its kind of early middle stages as far as I understand. Um, you know, we don’t know exactly where this is goes this will go and I’ve also heard that there is some concern that the uh the uh firings at the Department of Education could end up slowing down any investigative efforts. And that’s because a lot of those requests for information that the state attorneys general are putting in have to be processed by teams at the state at the Department of Education for legal reasons. Um and those things are all gone. They’ve been let go. So the people who would sort of facilitate these investigations on the half on behalf of the federal government, uh they’re not around. It’s not clear what’s going to happen to them now.
04:51 Speaker A
Want to squeeze this last story in aside from Mohila. The Department of Education is planning to enter defaulted student loans into collections one week from now. What should borrowers know ahead of that deadline?
05:10 Jordan Weisman
Uh well, if you have a defaulted loan, um and you’ve been contacted, you should definitely uh look into potentially rehabbing that loan. Um if you have not done that before, there is a chance to get current on your payments again. Um it requires make essentially nine on-time continuous payments. It’s supposed to be calculated at an affordable amount of your income. So don’t just sit on it. Don’t let don’t let the bill collectors show up uh if you have defaulted. Go seek help. There are organizations that are also willing to give advice on how to handle all of this thing. Um there are people out there who are happy to help hold your hand.