Education Department Cracks Down on Student Loan Servicers for Billing Errors

The Department of Education is withholding $7.2 million in payment to student loan servicer Missouri Higher Education Loan Authority (MOHELA) due to billing statement errors that resulted in 2.5 million borrowers receiving late statements. Over 800,000 borrowers were put into delinquency status as a result. The department has instructed MOHELA to place all affected borrowers in forbearance until the issue is resolved, and borrowers on income-driven repayment plans will not have the affected months counted against them. The department also found additional errors, including incorrect payment amounts and borrowers on the Borrower Defense program being put back on repayments, and those borrowers have also been placed on forbearance.