Borrowers Allege Student Loan Servicer’s Mishandling of Forgiveness Claim

Jennifer Joy and Misty Thomas sued MOHELA on Monday, alleging misuse of their Public Service Debt Forgiveness Program student debt forgiveness.

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Borrowers File Lawsuit Against MOHELA, Accusing Breach of Student Loan Forgiveness

The lawsuit alleges that both borrowers satisfy PSLF standards by working in government or nonprofit roles and making 120 monthly loan payments. Despite repeated applications since 2022, MOHELA allegedly forced them to restart payments.

MOHELA is sued for contract breach and consumer protection violations. As PSLF recipients and public servants, the borrowers believe they should receive their promised benefits after meeting their duties. Representing the borrowers, Sauder Schelkopf LLC partner Joseph Kenney emphasizes that the PSLF was created to foster public service careers and should cancel loans after 10 years.

Kenney claims that borrowers are forced to make extra loan payments instead of earning PSLF benefits through no fault of their own.

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Difficulties in Student Loan Forgiveness Emphasize the Necessity for Enhanced Procedures

Borrowers and advocates have criticized the program for making relief difficult after completing conditions. Last year, MOHELA warned that White House changes would slow application processing, allowing more debtors to qualify for assistance.

MOHELA and the Department of Education have been contacted by The Hill about the case. The case shows the obstacles borrowers experience in obtaining PSLF relief and the need for enhanced protocols to ensure eligible persons receive benefits.

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