One of the nation’s largest servicers of student loans is being called before the Senate Banking Committee for a hearing about its performance, following a report that was critical of the servicer’s efforts. News of the hearing came a day after HBO’s John Oliver aired a segment on student loans, in which he was critical of the efforts by servicers to help borrowers.
Sen. Elizabeth Warren [D-Mass.] sent a letter to the chief executive of the Higher Education Loan Authority of the State of Missouri, more commonly known as MOHELA, inviting him to testify at a hearing called “MOHELA’s Performance as a Student Loan Servicer” on April 10.
Earlier this month, the servicer was called out in a report by the Student Borrower Protection Center, which accused MOHELA of engaging in a “call deflection” scheme as a means of denying borrowers access to information that could help have their loans forgiven.
Warren accuses MOHELA of contributing to student loan borrower’s difficulties by mishandling their accounts and impeding access to relief under the Public Service Loan Forgiveness program.
“Your testimony will provide you with an opportunity to offer context on MOHELA’s role as a student loan servicer at a time of significant transition for the federal student loan program,” Sen. Warren wrote in her letter.
Not helping MOHELA’s case was the report on “Last Week Tonight” which was very critical of the efforts of multiple student loan servicers, including MOHELA, in working with student loan borrowers.
“In theory, they’re supposed to help you navigate the system,” Oliver said during the show. “But in practice, they often manage to make things much worse” with hold times for individuals attempting to call in with questions, incorrect billing details, and other misleading information. One whistleblower at a student loan servicer said the company trained representatives to hang up the phone after seven minutes as a means of maintaining productivity.
