MOHELA Student Loan Information for 2025

MOHELA, the Missouri Higher Education Loan Authority, manages federal and, in some cases, private student loans for millions of borrowers. The organization serves as the bridge between students and the US Department of Education, facilitating repayment plans, loan forgiveness applications, and more to ensure effective debt management. 

In recent years, MOHELA has taken on a vital role in administering programs like the Public Service Loan Forgiveness (PSLF), as well as federal policies like the pandemic-era student loan payment pause. 

The right knowledge about MOHELA can empower you to properly manage your loan repayment, avoid unnecessary financial stress, and, more importantly, make good use of federal repayment and forgiveness programs. Keep reading this article to learn more. 

What Is MOHELA? 

MOHELA acts as a federal student loan servicer, managing loans for the US Department of Education.

However, it’s important to note that MOHELA does not issue loans. Its primary responsibility is limited to loan administration and repayment process management.

Here are some of MOHELA’s key functions:

Loan Repayment Management 

MOHELA facilitates the repayment of federal student loans by providing borrowers with repayment plan options. These include standard, graduated, extended, and income-driven plans such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE).

Borrowers can update payment preferences, set up automatic payments, and track their progress toward paying off their loans through MOHELA’s platform. 

Discharge Application 

Federal forgiveness programs like the PSLF are managed by MOHELA. It ensures that eligible borrowers receive the benefits they qualify for, including loan discharge for cases of total and permanent disability or issues related to school closures. 

Borrower Assistance 

Borrowers often rely on MOHELA’s customer service team for guidance in several areas. This includes navigating loan terms, troubleshooting account issues, and understanding their repayment obligations. 

Deferment and Forbearance Processing 

Handling cases that require deferment or forbearance, like borrowers facing financial hardship, falls within the responsibilities of MOHELA. 

Deferment or forbearance allows borrowers to pause or reduce payments under certain conditions, such as unemployment or enrollment in school. 

Loan Account Management 

Through its online platforms, MOHELA provides borrowers with tools to monitor loan balances, interest accrual, and payment history. Also, borrowers can update personal information, explore repayment calculators, and access detailed account information to stay updated with their loans. 

Types of Loans Serviced by MOHELA 

MOHELA services various federal student loans, some special loans, and occasionally private student loans. Here’s a breakdown:

Federal Student Loans 

MOHELA manages all types of federal student loans, including

• Direct Subsidized Loans: Loans available to undergraduate students with demonstrated financial need, where the government pays the interest during certain periods. 

• Direct Unsubsidized Loans: Loans available to undergraduate, graduate, and professional students, regardless of financial need. Borrowers are responsible for interest from the time the loan is disbursed. 

• Direct PLUS Loans: These loans are for graduate students, professional students, or parents of dependent undergraduate students to cover educational costs not covered by other federal student aid. 

• Direct Consolidation Loans: These loans allow borrowers to combine multiple federal student loans into one, simplified repayment and potentially providing access to additional repayment plans. 

Loans for Forgiveness Programs 

MOHELA services loans that qualify for forgiveness programs like Public Service Loan Forgiveness.

Until recently, all borrowers seeking PSLF had their loans transferred to MOHELA to facilitate program eligibility and monitoring.

While MOHELA still holds most of these loans, they are no longer the sole servicer for PSLF.

Private Student Loans 

While MOHELA’s primary focus is federal loans, it may also service private student loans through specific partnerships. 

The terms of this option aren’t fixed, as different lenders have different arrangements. To understand how the terms apply to your private loans, contact MOHELA. 

Legacy Loans 

Older federal programs are referred to as Legacy Loans. An example is the Federal Family Education Loan, FFEL, which was established in 1965 but discontinued in 2010. 

MOHELA also services such loans, depending on the borrower’s circumstances.

MOHELA Loan Repayment Options 

On the MOHELA platform, you can access several different loan repayment options. We’ve provided details about each in this section.

• Standard Repayment Plan: Fixed monthly payment, over a 10-year period (or up to 30 years for consolidation loans). Ideal for borrowers who can afford higher monthly payments and want to pay off their loans quickly. 

• Graduated Repayment Plan: Starts with lower payments that gradually increase every two years. Still maintains a 10-year repayment term (or longer for consolidation loans). 

• Extended Repayment Plan: Allows repayment over 25 years, with either fixed or graduated payments. Available to borrowers with over $30,000 in outstanding federal loans. 

• Income-Driven Repayment Plans: MOHELA supports several IDR plans that cap monthly payments based on a percentage of the borrower’s discretionary income: 

• Income-Based Repayment (IBR): Payments are capped at 10-15% of discretionary income.
• Pay As You Earn (PAYE): Payments are limited to 10% of discretionary income, with forgiveness after 20 years. 
• Saving on a Valuable Education (SAVE): Previously known as REPAYE but rebranded during the Biden administration. Monthly payments of 5% of discretionary income. 
• Income-Contingent Repayment (ICR): Payments are either 20% of discretionary income or a fixed amount over 12 years, adjusted to income, with forgiveness after 25 years. 

• PSLF Payments: Borrowers employed in public service roles can qualify for PSLF after 120 qualifying payments.

• Consolidation Loans: Borrowers with multiple federal loans can consolidate them into a single loan with MOHELA. Repayment terms range from 10 to 30 years, depending on the loan balance. 

• Deferment and Forbearance: Temporary options for student borrowers facing financial hardship, allowing them to pause or reduce payments. Interest may continue to accrue on some loan types during these periods. 

• Auto-Debit Option: Borrowers can arrange automatic payments through MOHELA, typically earning a 0.25% interest rate reduction.

How to Work With MOHELA

To effectively manage your student loans, follow these steps to work with MOHELA

• Access Your MOHELA Account Online: You can open an account here if you don’t already have one. Then log in to view your loan details, including balances, interest rates, and repayment options. 

• Understand Your Loan Details: Identify what types of loans you have, whether they’re federal or private loans. This step is vital, as it affects your repayment options and benefits. 

• Set Up Automatic Payments: While auto-debit ensures that payments are made on time, it also saves you money, as MOHELA often offers a 0.25% interest rate reduction for borrowers using this feature.

• Consider the Repayment Plans: Choosing the right plan is a crucial step; use the MOHELA repayment calculator to evaluate your options before deciding. 

• Contact Customer Support Regularly: Reach MOHELA’s customer service online through chat or email, or call them with any questions. You can find the contact information on the platform. Also, remember to keep records of any communications, including dates and names of representatives. 

• Monitor Your Progress: Regularly review your account to ensure payments reflect as they should. Report any errors or discrepancies immediately to avoid complications 

• Update Your Personal Information: In the event that you change your house address or phone number, ensure you notify MOHELA. This ensures you receive important updates through the right channels. 

Pros and Cons of MOHELA 

Most of these cons are common among loan servicers and not unique to MOHELA.

Recent Issues Faced by MOHELA

In the past two years, MOHELA has faced increased scrutiny over its management practices.

The organization has received criticism for delays in processing applications, inaccurate payment tracking, and issues with borrower communication. These challenges have led to regulatory fines and further questions about its compliance with federal standards.

While MOHELA remains a key player in federal loan servicing, borrowers should stay vigilant and proactive when managing their accounts.

Stay Informed With Student Loan Professor 

MOHELA is an intermediary between student loan borrowers and federal and private lenders. However, it doesn’t offer loan services. Understanding this is vital, especially considering some scammers might claim to represent MOHELA to offer you fraudulent loan deals. 

Working with MOHELA requires frequent updates. While you can rely on MOHELA’s updates, the platform is not particularly good at communication. 

Platforms like Student Loan Professor are more reliable. We not only keep you informed but also provide guidance on choosing the best repayment plan for your situation. Check out our vast offerings or talk to one of our advisors today!