The Missouri Higher Education Loan Authority (MOHELA) is one of the largest federal student loan servicers in the United States. One of the top 10 largest loan servicers in the country, millions of Americans have MOHELA loans or have in the past.
As a federal loan servicer, MOHELA has the same role as other servicers like Great Lakes. They themselves do not offer any loan forgiveness or special repayment plans. But federal borrowers with MOHELA loans can qualify for federal student loan forgiveness and other programs.
What is MOHELA?
MOHELA is one of the country's largest student loan servicers and holders. Headquartered in St. Louis, in early 2022, it was announced that MOHELA would also begin to participate in managing both the PSLF program, as well as TEACH grants.
MOHELA services both federal and private student loan debt. When you take out federal loans from the federal government, they'll assign those loans to a servicer that has a contract with them. Those servicers, like MOHELA, are responsible for collecting your payments, processing your paperwork, and recordkeeping for the government.
As an official servicer of Federal Student Aid, MOHELA prides itself on customer service and on providing support to borrowers when they need it. In fact, MOHELA's customer satisfaction scores are usually among the best of all loan servicers nationwide
MOHELA loan forgiveness for federal student loans
If your federal loans are with MOHELA, you may have access to the following forgiveness options to consider:
Income-Driven Repayment
Public Service Loan Forgiveness
Teacher Loan Forgiveness
Loan Cancellation / Discharge
Other loan forgiveness options
1. MOHELA and Income-Driven Repayment
MOHELA loan forgiveness can be achieved after making 20 to 25 years of payments under any of the four main income-driven repayment plans. These four popular programs and their terms before becoming eligible for forgiveness are as follows:
Income-Based Repayment (IBR) - 20 or 25 years, depending on loan date
Income-Contingent Repayment (ICR) - 25 years
Pay as You Earn (PAYE) - 20 years
Revised Pay as You Earn (REPAYE) - 20 or 25 years, depending on level of education
These programs lower borrower's monthly payments by making sure that you won't pay more than 10% to 20% of your discretionary income towards your student loans.
Your monthly payments will be recalculated each year, since you'll need to certify your income and family size annually. These are the two main components that go into calculating your payment size.
As the law stands now, income-driven repayment forgiveness is taxable, though it it on pause until at least the beginning of 2026.
2. Public Service Loan Forgiveness
MOHELA borrowers may also qualify for PSLF, depending on their career. As a reminder, PSLF is an option for those that work for a qualifying employer - these are typically nonprofit organizations as well as government jobs.
While working for a qualified employer, you'll need to make 120 monthly payments, meaning that if you qualifying employment is consecutive, you could find yourself debt free in just 10 years. Also, PSLF forgiveness is tax-free, which is a huge perk.
The other aspect to PSLF is that you'll need to consider is that you'll need to be on qualifying repayment plan, which also happen to be the income-driven repayment plans.
Remember - MOHELA just so happens to be taking over PSLF accounts in 2022.
3. MOHELA Teacher Loan Forgiveness
MOHELA student loan forgiveness is also available through the federal Teacher Loan Forgiveness program.
Offering up to $17,500 in forgiveness for math, science, and special education teachers in low-income schools, TLF is a way for MOHELA borrowers that may be close to paying off their student loans to get across the goal line. Teachers of other subjects may still be eligible, but they'll receive a maximum of $5,000 in forgiveness.
We've written a guide for teachers to help them decide whether to pursue PSLF or TLF.
4. Other cancellation programs
MOHELA borrowers may also utilize programs like Perkins Loan Cancellation and other cancellation/discharge programs to make student loan progress.
Generally, student loans can also be canceled if you meet one or more of the following classifications:
Total and permanent disability discharge
Discharge by death
Closed school discharge
Please note that this may not be an all-encompassing list.
Other loan forgiveness options
Keep in mind that the programs we have discussed here are federal MOHELA loan programs. There are also a plethora of state-sponsored forgiveness programs depending on the state that you live in.
Most of the state programs are designed to recruit and retain talented workers in fields including law, engineering, education, nursing, and healthcare.
Don't like MOHELA? Refinance your student loans
Of course, no federal loan servicer is perfect, MOHELA included. And if you don't qualify for any of these forgiveness programs for your MOHELA loans, you may find it worthwhile to consider refinancing.
We usually suggest that you start by checking your rate with Splash Financial or LendKey, as both companies are actually student loan marketplaces (rather than lenders) that will check your rate across multiple lenders for you. Checking your rates only takes a couple minutes and it won't hurt your credit either!
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