Higher Education Loan Authority of the State of Missouri

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Higher Education Loan Authority of the State of Missouri
MOHELA logo.png
Agency overview
Formed1981 (1981)
JurisdictionState government of Missouri
HeadquartersSt. Louis, Missouri, U.S.
Employees625 (2013)

The Higher Education Loan Authority of the State of Missouri, aka the Missouri Higher Education Loan Authority or MOHELA, is one of the largest holders and servicers of student loans in the United States. It is headquartered in St. Louis, Missouri.

MOHELA is among the 10 largest student loan servicers, alongside FedLoan Servicing (PHEAA), Granite State (GSMR), HESC/Edfinancial, Navient, Nelnet, and OSLA Servicing (as well as previously CornerStone and Great Lakes Educational Loan Services, Inc.).

Created in 1981 as a quasi-governmental entity, MOHELA participated in the Federal Family Education Loan Program (FFELP) for nearly three decades. While fully supporting a portfolio of legacy student loans through FFELP, MOHELA completed steps to become a contractor to service federal student loans. MOHELA received the first not-for-profit (NFP) contract and began servicing student loans owned by the federal government under the U.S. Department of Education Federal Loan Program in October 2011.

MOHELA was created, in part, to help students obtain low-cost education loans. MOHELA has provided a total of more than $300 million in loan forgiveness. MOHELA also formed the Missouri Scholarship Foundation, a tax-exempt nonprofit 501(c)(3) organization, to ease higher education costs for students.

More than 625 full-time MOHELA staff members work with the Department of Education, families, lenders, schools and students servicing upwards of $39 billion in student loans. A second loan servicing center opened in Columbia, Missouri in 2013.

History and structure[edit]

As a “public instrumentality and body politic and corporate of the state of Missouri,” MOHELA was created in 1981 by legislation signed into law by Governor Christopher S. “Kit” Bond. MOHELA was established to “…assure that all eligible post-secondary education students have access to student loans” (RSMo 173.360). The “authority” is governed by seven board members operating on alternating five-year terms; five of whom are appointed by the Governor of the state of Missouri, subject to the advice and consent of the Missouri Senate, and two others are representatives from the Missouri Coordinating Board of Higher Education – one of which is a permanent seat to be filled by that agency’s commissioner.

Initial funding to establish operations came from a $65 million bank letter of credit, guaranteed by several of the then members, and was repaid following the issuance of bonds. Since that original issue, MOHELA has generated its own funding from beginning to present day. From its humble beginnings with fewer than ten employees, MOHELA has grown to more than 625 full-time staff members and works with students, schools and lenders in all 50 states.

Income and finance[edit]

MOHELA operates and pays operating costs exclusively from revenues derived from its own operations. Net income from student loans is typically around 1% on loans that MOHELA owns. A majority of MOHELA’s serviced portfolio earn a fee paid to MOHELA from the Department of Education.


MOHELA was named an "Exceptional Performer" by the U.S. Department of Education, and maintained a compliance performance rating of 97 percent in converting federal student loans to repayment, collecting delinquent loans, and filing timely claims with guaranty agencies. MOHELA leaders also have been elected to industry and community board and serve on a variety of industry-related committees.

MOHELA became the first servicer in the not-for-profit (NFP) sector to receive a contract and began servicing student loans owned by the federal government under the U.S. Department of Education Federal Loan Program in October 2011.

Student loan transfer controversy[edit]

In the past several years, MOHELA has become a servicer for the federal government for student loans across all states in the U.S. Over 500,000 public student loan accounts were transferred from the U.S. Department of Education and other servicers to MOHELA for handling. However, there have been several complaints from borrowers about loan handling during and after the switch to MOHELA, with some borrowers complaining of charges for late payments due to delayed processing of payments made to the Department of Education before the transfer, suspension of auto-payment programs, increased payment amounts, increased estimated repayment dates, changes to the borrower's selected repayment plan, unwanted forbearances and deferments, failure to process forms, and applied or capitalized interest.[1][2]

Types of student loans owned and serviced by MOHELA[edit]

External links[edit]


  1. ^ Deckelmann, Selena (February 23, 2012). "Student Loan Sharks: Mohela is shady (but the CSR I talked to was really nice)". Chesnok. Retrieved July 9, 2021.{{cite web}}: CS1 maint: url-status (link)
  2. ^ Rasberry, Shannon (May 3, 2012). "Federal Student Loan Servicer Transition Leaves Borrowers Lost in the Shuffle". Student Loans Blog. Archived from the original on December 13, 2012. Retrieved November 29, 2012.