One of the few federal student loan servicers that oversees the $1 trillion in student loans is Missouri Higher Education Loan Authority (MOHELA). 73 trillion federal student loan debt portfolio. Additionally, the U. S. The Public Service Loan Forgiveness (PSLF) and TEACH Grant programs will now be managed by MOHELA, according to a recent announcement from the Department of Education.
It’s possible that if you have federal student loans, you have dealt with MOHELA already or will in the future. As a result, it’s critical to keep up with your available repayment options, particularly when it comes to loan forgiveness.
To be clear, there are no specific MOHELA loan forgiveness programs. But MOHELA borrowers may be eligible for a number of federal loan forgiveness initiatives.
A quick note about MOHELA and its role with student loans
As a private lender, MOHELA has worked with student loans for many years. It has only played a minor role as a federal loan servicer. However, the Department of Education announced in December 2021 that MOHELA would replace FedLoan Servicing as the program administrator for the PSLF and Teach Grant programs.
Most FedLoan accounts have already been transferred to MOHELA. However, the remainder of accounts enrolled in PSLF and all TEACH Grant recipients will be transferred by the end of September 2022.
Furthermore, MOHELA might accept a sizable proportion of borrowers on income-driven repayment (IDR) plans. As a result, it would be accountable for more loans that could eventually be forgiven.
Currently, MOHELA only manages a small portion of IDR plans. The Department of Education bundles this loan servicer with other nonprofit servicers when reporting data because this portion is so small.
The Revised Pay As You Earn (REPAYE) program, for instance, has more than $194 9 billion outstanding for more than 3. 28 million borrowers as of the second quarter of 2021. Only $10 is serviced by all nonprofit servicers combined (not just MOHELA). 6 billion of outstanding loans on REPAYE. This equates to roughly 300,000 borrowers.
It will be interesting to see how MOHELA manages this significant change, as well as what proportion of repayment plans they will accept in light of such significant changes in loan servicers.
MOHELA loan forgiveness programs for federal loans
Here are some loan forgiveness options to carefully consider if you have federal student loans through MOHELA.
Public Service Loan Forgiveness
With the Public Service Loan Forgiveness program, borrowers can pay off their loans tax-free in as little as 10 years. To be eligible for PSLF, you must:
You can use the new PSLF Help Tool on the federal student aid website to help you submit your Employment Certification Form (ECF) and apply for forgiveness.
Keep in mind that FedLoan Servicing continues to oversee some PSLF accounts. But by the end of September 2022, MOHELA will have completed taking over.
Income-driven repayment forgiveness
IDR plans allow you to pay no more than 10% to 20% of your discretionary income each month toward your student loans. However, they can also help you qualify for MOHELA loan forgiveness after 20 to 25 years of meeting the requirements.
Popular federal student loan repayment options include:
Your income and family size must be recertified annually for these plans in order to determine your monthly payment.
You should start saving for this potential tax bomb now because IDR loan forgiveness will be taxed.
Teacher Loan Forgiveness
By utilizing the Teacher Loan Forgiveness program, teachers may be qualified to receive up to $17,500 in MOHELA student loan forgiveness.
Teachers should be aware of the limitations and caveats of this program, though.
For instance, only “highly qualified” secondary math and science teachers and special education teachers are eligible for the full $17,500 in forgiveness; all other teachers are only eligible for $5,000 in forgiveness.
Most teachers would be better off applying for PSLF to completely forgive their debt.
Alternative forgiveness options
You might be qualified to have your MOHELA student loans forgiven under one of the following alternative provisions, depending on your circumstances:
StudentAid.gov details additional situations that could result in having your loans forgiven, canceled or discharged.
Other student loan forgiveness programs to explore
Even if you intend to pursue MOHELA loan forgiveness through federal programs, you may be eligible for other state- or profession-based loan forgiveness programs that could cover federal and private student loans if you meet the requirements.
Many states have set up student loan repayment plans intended to increase employment in particular industries or professions.
For instance, working in an underserved area can result in some nursing loans being forgiven. Even debt forgiveness programs for law school exist.
Our student debt experts can develop a personalized repayment plan for you if you need assistance choosing the best repayment option, which may include loan forgiveness or looking into refinancing options for student loans to receive a lower interest rate.
Is MOHELA a federal student loan?
Federally-Owned Loans Serviced by MOHELA With more than 40 years of experience in the student loan servicing sector, we have the knowledge to help you manage your loans. We can assist with any account inquiries, process payments, and help you learn about your benefits and repayment options.
What student loans are not eligible for forgiveness?
What student loans are not eligible for forgiveness? Private student loans are not eligible for forgiveness because they are private by definition. These are loans that the borrower owes to companies that offer student loans rather than the federal government.
Is MOHELA eligible for PSLF?
All PSLF debtors who have not had their loans forgiven will be moved over to MOHELA. Throughout this transfer period, borrowers who meet all eligibility requirements can still receive PSLF discharges.
How do I know if my student loans qualify for forgiveness?
You must have federal student loans and make less than $125,000 (or $250,000 per household) annually to be eligible for forgiveness. Borrowers who fit that description may be eligible for a $10,000 debt cancellation. You may be eligible to receive up to $20,000 in forgiveness if you were also awarded a Pell Grant during your education.