An investigation conducted by an advocacy group and a teacher’s union has uncovered what a report is calling a years-long “call deflection” campaign by the student loan servicing company handling the Public Service Loan Forgiveness program to deny borrowers access to information that could help them have their student loans forgiven.
The report was released last week by the Student Borrower Protection Center and the American Federation of Teachers and was directed at the Higher Education Loan Authority of the State of Missouri, more commonly known as MOHELA.
Since MOHELA took over processing of the PSLF program in 2022, the backlog of pending applications has tripled, according to the report. In fact, according to the report, the company actually gets paid when it denies an application, giving it an incentive to do so.
The report references a playbook created by the company that seeks to trap borrowers in a “byzantine loop of misinformation and false promises” by diverting individuals away from customer service representatives and to the company’s website, even though many of the functions needed can only be performed by a representative.
A spokesperson for MOHELA called the report “irresponsible,” saying, ““False accusations are being disingenuously branded as an investigative report. This is nothing more than a PR campaign by these organizations. MOHELA remains committed to helping the millions of student-loan borrowers that we serve.”
The executive director of a group representing student loan servicers said that getting customers to access portals and use a website is about efficiency.
“If you want to say that we’re trying to deny people service, that’s not at all what we’re trying to do,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance. “Servicers are trying to reduce the demand on the system so we can help more borrowers. The accusation that that’s somehow nefarious is just a bunch of hooey. This is called customer service and that’s how it works.”
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