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Student Loan Servicer Says Borrowers May Reapply for IDR: What to Know
Student Loan Servicer Says Borrowers May Reapply for IDR: What to Know

Newsweek

time7 hours ago

  • Business
  • Newsweek

Student Loan Servicer Says Borrowers May Reapply for IDR: What to Know

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A major student loan servicer said that borrowers may reapply for an income-driven repayment (IDR) plan amid a deep backlog of applications. Why It Matters The Education Department said there were more than 1.98 million IDR applications pending as of April's end—a major bottleneck facing borrowers seeking a plan to make payments more affordable, particularly as President Donald Trump's administration walks back some of former President Joe Biden's efforts to forgive student loan debt. About 43 million Americans have some sort of student loan debt, which proponents of forgiveness plans say limit economic mobility. What to Know The Higher Education Loan Authority of the State of Missouri (MOHELA), one of the largest student loan services in the United States, wrote in a new update that borrowers who have submitted an IDR application and are still waiting on it to be processed may fill out a new one. Students graduate college at Birmingham University in the United Kingdom on July 14, 2010. Students graduate college at Birmingham University in the United Kingdom on July 14, 2010. oversnap/iStock via Getty Images. "Good news! Processing has resumed for IBR, PAYE, and ICR plans," the MOHELA website reads. "If you submitted an Income-Driven Repayment (IDR) application prior to April 27th, 2025, and your application has not been processed yet, you can now reapply at to use your IRS verified income and select an eligible plan which may expedite processing." The announcement notes that the borrower's previous application will be canceled, and that they can track their applications on their account. Applications for the SAVE plan and "lowest monthly payment" requests are still on hold, and "If you have at least 1 loan on SAVE and 1 loan on another IDR plan, your application will remain on hold and your loans will stay in an administrative forbearance," the update reads. Newsweek reached out to MOHELA and the Education Department for comment via email on Monday. The department has not commented on whether borrowers should reapply, and the statement does not guarantee that filling out a new application would quicken processing times—only that it "may" help. MOHELA previously made an announcement saying that some borrowers who submitted before April 27 did not include income information, Forbes reported. The new announcement makes no mention of income data. What People Are Saying The Student Borrower Protection Center issued a warning about the backlog in May: "According to the report, there are 1,985,726 pending applications seeking to lower their monthly student loan payments as of April 30, 2025. During the month of April, ED [the Education Department] only approved or denied 79,349 applications. At this rate, it will take ED over two years to process the existing backlog of applications. The report also included new information about how ED is operating its new Public Service Loan Forgiveness (PSLF) Buyback option." Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, previously told Newsweek: "This affects millions of borrowers now back in repayment, many of whom applied for forgiveness or income-driven repayment caps just to keep their finances afloat. Without that relief, a big chunk of their paycheck could be taken to cover loans; money they need for rent, food, or other bills." What Happens Next The future of student loans in the U.S. remains murky. There are ongoing legal cases that could result in some borrowers still having debts forgiven, like a case heading toward the Supreme Court surrounding for-profit colleges accused of defrauding students.

Student Loan Servicer Clarifies Who Should Reapply For An IDR Plan
Student Loan Servicer Clarifies Who Should Reapply For An IDR Plan

Forbes

time13 hours ago

  • Business
  • Forbes

Student Loan Servicer Clarifies Who Should Reapply For An IDR Plan

WASHINGTON, DC - JUNE 20: A sign marks the location of the U.S. Department of Education headquarters ... More building on June 20, 2025, in Washington, DC. The department has not yet clarified whether certain student loan borrowers should reapply for IDR if they already submitted an application. (Photo by J.) One of the Department of Education's major student loan servicers has issued an updated notification clarifying that certain borrowers who have already applied for income-driven repayment should now consider submitting a new application to hasten processing. The revised guidance followed a more ambiguous announcement the servicer made earlier this month. The statement by MOHELA comes as the IDR application system is under enormous strain. IDR plans, which are a type of federal student loan repayment option that provides borrowers with monthly payments based on their income and a path to eventual student loan forgiveness, have been inaccessible for millions of borrowers for months. At least eight million borrowers were thrown into an involuntary forbearance last summer due to a legal challenge over the future of the SAVE plan, the newest of four IDR programs. Many of these borrowers (some of which are pursuing Public Service Loan Forgiveness, a separate student loan forgiveness program) have applied to change to a different income-driven plan like ICR, IBR, or PAYE, but have been unable to enroll due to a massive backlog of applications. The backlog is in part due to the Trump administration's decision to temporarily shut down the IDR application system earlier this year following a new court order in the SAVE plan litigation. Many borrowers, particularly those stuck in the SAVE plan forbearance or recent graduates trying to enroll in IDR for the first time, submitted applications to change IDR plans months ago, but are still waiting on a response. MOHELA's latest announcement suggests that reapplying could speed things up. But doing so may come with risks. Here are the details. Updated Student Loan Servicer Statement Suggests Reapplying For IDR MOHELA first posted a statement earlier this month suggesting that federal student loan borrowers who have applied for IDR should consider submitting a new application, particularly if they applied prior to April 27, 2025. This is roughly the date when the Department of Education began resuming IDR processing after revising the application form to comply with the latest court order in the SAVE plan litigation. But MOHELA's initial announcement was difficult to decipher. The notice said that for borrowers who submitted an IDR application prior to April 27, ' Your application didn't include income info." MOHELA encouraged impacted borrowers to reapply. But many borrowers did include income information with their IDR application, and it was not at all clear whether these borrowers would need to reapply. The revised statement now displayed on MOHELA's website offers some clarity. 'If you submitted an Income-Driven Repayment (IDR) application prior to April 27th, 2025, and your application has not been processed yet, you can now reapply at to use your IRS verified income and select an eligible plan which may expedite processing,' says the student loan servicer. 'Your previous application will be automatically canceled.' This suggests that borrowers don't necessarily need to reapply to IDR. But if you submitted an application prior to April 27th and are still waiting, MOHELA suggests that reapplying now could speed things up, particularly if you use the IRS data retrieval tool that links your income information from your tax return to the Department of Education's online IDR application system. This data retrieval tool has been down for much of the last year, but if is back up and running again, it could indeed expedite processing, as that is the tool's primary purpose. Borrowers who manually provide their income documentation by uploading it into the online application, or appending it to their paper IDR application, typically experience longer processing times. Risks For Student Loan Borrowers Reapplying For IDR Still, there are some potential risks student loan borrowers should be aware of if they are considering reapplying for their IDR plan. There are no guarantees that reapplying will actually expedite processing, notwithstanding MOHELA's statement (and note that MOHELA says it 'may' expedite processing, not 'will'). Anecdotal reports indicate that single borrowers are experiencing faster IDR processing than married borrowers, regardless of when they have submitted their application. And sometimes, submitting multiple IDR applications can cause unexpected problems such as delayed processing or multiple rounds of forbearances, which typically don't count toward student loan forgiveness. It is also noteworthy that the announcement suggesting that borrowers reapply for IDR is only present on MOHELA's website. None of the Department of Education's other major contracted student loan servicers – such as Nelnet, Aidvantage, and EdFinancial – have similar announcements posted on their own websites. And the department's main website that provides guidance to student loan borrowers impacted by the ongoing IDR legal challenges provides no similar suggestion, either. Notably, the department's website was last updated on April 28, 2025 – the day after the cutoff suggested in MOHELA's announcement. So this information certainly could have been included with that update, in theory. Critics of MOHELA may also point out that the loan servicer has been accused of making misleading statements to borrowers in the past. Most recently, the servicer sent out letters to millions of borrowers in the SAVE plan forbearance suggesting that their loans were subject to interest accrual, even though the Department of Education has confirmed that no interest should be accruing during the SAVE plan forbearance period. These Student Loan Borrowers Should Consider Reapplying Taking MOHELA's updated statement at face value, any federal student loan borrower with MOHELA-serviced student loans who applied for an IDR plan prior to April 27, 2025, and who manually provided income documentation by uploading it into the online application or attaching it to a paper application (or provided no income documentation at all), may want to consider reapplying. If you do reapply, be sure to use the online application system and opt into the IRS data retrieval tool when prompted, which MOHELA suggests is the key to expediting processing. MOHELA also notes in its announcement that, 'Applications for the SAVE plan and 'lowest monthly payment' requests are still on hold and loans will stay in an administrative forbearance.' This is due to the ongoing legal challenge involving the SAVE plan. Borrowers who previously applied for IDR and specifically selected the SAVE plan or the option for the 'lowest monthly payment' (which are no longer even options on the newly-revised IDR application) should consider reapplying, regardless of who their student loan servicer is or whether they included documentation of their income with their original application. Finally, MOHELA says that, 'If you have at least 1 loan on SAVE and 1 loan on another IDR plan, your application will remain on hold and your loans will stay in an administrative forbearance.' This statement is fairly ambiguous, and it is not clear if the loan servicer is suggesting that these borrowers also should reapply for IDR. But if you meet this description, you're pursuing student loan forgiveness (particularly through PSLF), and want to get back into repayment, it may make sense to reapply if the only other alternative is remaining stuck in a forbearance.

Missouri Scholarship & Loan Foundation Celebrates Milestones for My Missouri (MyMO) Scholarship Promise
Missouri Scholarship & Loan Foundation Celebrates Milestones for My Missouri (MyMO) Scholarship Promise

Associated Press

time16-06-2025

  • Business
  • Associated Press

Missouri Scholarship & Loan Foundation Celebrates Milestones for My Missouri (MyMO) Scholarship Promise

ST. LOUIS, June 16, 2025 (GLOBE NEWSWIRE) -- MOHELA, a non-profit governmental corporation dedicated to helping the student loan borrowers it serves, proudly announces two major milestones through The Missouri Scholarship & Loan Foundation (MSLF). The Foundation, established by MOHELA in 2010, has selected its newest class of high school freshmen, the Class of 2028, to join the My Missouri (MyMO) Scholarship Promise program, which provides up to $10,000 in scholarship funds to Missouri students from low-income backgrounds. At the same time, the inaugural MyMO cohort—the Class of 2025—is graduating from high school and preparing to enter college this fall with their full scholarship awards in hand. 'These students represent the future of Missouri,' said Melissa Findley, Executive Director of the MSLF. 'We're proud of every student who made a four-year commitment to themselves, their education, and their future. MyMO is more than a scholarship—it's a roadmap to success.' Celebrating the Class of 2025 Roughly 78 students across the state, including Drew Edmondson of Nixa High School, successfully completed all MyMO benchmarks throughout high school. These requirements included maintaining a GPA of 2.5 or higher, meeting attendance standards, completing ACT testing, FAFSA filing, and other key college readiness activities. Graduates will receive $10,000 in scholarship funds—disbursed evenly over four years—and a $100 contribution to their Missouri 529 college savings account. Drew, who plans to attend Ozarks Community Technical College and later transfer to Missouri State University to study Media Production, exemplifies the determination and promise at the heart of the MyMO program. Welcoming the Class of 2028 MSLF also welcomes a new group of incoming freshmen to the MyMO program. These students will begin a four-year journey guided by structured academic and college-readiness benchmarks. Each year, they have the opportunity to earn $2,500—up to a total of $10,000—toward tuition at any eligible Missouri institution. Benchmarks begin in 9th grade and include GPA and attendance goals, participation in program events, and activities such as researching colleges, completing the ACT, visiting campuses, and submitting the FAFSA. Program Impact Open to Pell-eligible students who are Missouri residents, MyMO removes financial barriers and prepares participants for success through proactive planning and support. The scholarship funds are paid directly to over 70 eligible nonprofit Missouri colleges, universities, and technical schools. 'MyMO provides a long-term, supportive framework for students who may otherwise believe college is out of reach,' said Findley. 'The results speak for themselves—we're seeing the impact in real time, and we're just getting started.' To learn more about the Missouri Scholarship & Loan Foundation, visit About Missouri Scholarship & Loan Foundation MSLF, established by MOHELA in 2010, is dedicated to providing innovative financial solutions and career development opportunities for Missouri students, particularly those with financial need, to prepare for and successfully complete their higher education journeys. About MOHELA MOHELA is a non-profit, governmental corporation with 40 years of experience and a track record of providing exceptional customer service to the borrowers it serves. MOHELA plays an essential role in the student loan ecosystem, providing support and assistance for around 9 million borrowers. Media Contact: [email protected]

Honoring Governor Kit Bond: Founding Governor of MOHELA and Champion of Higher Education
Honoring Governor Kit Bond: Founding Governor of MOHELA and Champion of Higher Education

Yahoo

time20-05-2025

  • Business
  • Yahoo

Honoring Governor Kit Bond: Founding Governor of MOHELA and Champion of Higher Education

CHESTERFIELD, Mo., May 20, 2025 (GLOBE NEWSWIRE) -- The Higher Education Loan Authority of Missouri (MOHELA) joins the state and nation in mourning the passing of Governor Christopher 'Kit' Bond, who died on May 13, 2025, at the age of 86. Governor Bond's visionary leadership and enduring commitment to public service were instrumental in the creation of MOHELA, which he signed into law in 1981. As a dedicated public servant, Kit Bond recognized the transformative power of education. The establishment of MOHELA reflected a bold commitment to expanding access to higher education for Missouri students. Over the past four decades, MOHELA has helped millions of students and families manage the cost of college, thanks to the foundation Governor Bond laid. 'Governor Bond's legacy is deeply woven into the fabric of MOHELA,' said Scott Giles, Executive Director and CEO of MOHELA. 'His belief in the importance of education and opportunity continues to guide our mission every day. We are forever grateful for his leadership and vision.' Governor Bond's distinguished career included two terms as Missouri's governor and four terms in the U.S. Senate. He was widely respected for his bipartisan approach and his work on issues ranging from education and infrastructure to national security and economic development. Further, Governor Bond was noteworthy for fighting for the interests and improving the lives of Missourians. MOHELA extends its deepest condolences to Governor Bond's family and loved ones. His legacy lives on in the students we serve and the futures we help build. About MOHELA MOHELA is a non-profit, governmental corporation with 40 years of experience and a track record of providing exceptional customer service to the borrowers it serves. MOHELA plays an essential role in the student loan ecosystem, providing support and assistance for around 9 million borrowers. CONTACT: Contact: Arisha Syed ArishaS@

Warren applauds reported state probes of student loan servicer
Warren applauds reported state probes of student loan servicer

Yahoo

time29-04-2025

  • Business
  • Yahoo

Warren applauds reported state probes of student loan servicer

BOSTON (SHNS) – Sen. Elizabeth Warren on Monday applauded reports that one of the nation's largest student loan servicers is under investigation by multiple attorneys general, including in Massachusetts. Citing sources, Yahoo! Finance reported that states 'are scrutinizing issues similar to ones covered in a lawsuit filed last summer against' the Higher Education Loan Authority of the State of Missouri (MOHELA) by the American Federation of Teachers. The probes involve alleged mismanagement of accounts, the report said. 'MOHELA's mismanagement of Americans' student loans has resulted in a series of abuses for hundreds of thousands of borrowers,' Warren and Sens. Chuck Schumer and Bernie Sanders said in a joint statement. The senators added: 'We've previously urged state Attorneys General to investigate MOHELA and pursue action to the fullest extent possible under the law, and reports of these new investigations are an important step toward making right by our nation's student loan borrowers — especially as the Trump Administration abandons and penalizes them. Americans deserve better than MOHELA's failures.' At the end of January, MOHELA was responsible for handling accounts for 6.8 million federal direct loan borrowers, according to Yahoo! Finance, which reported that it was told by a MOHELA spokesman that the loan servicer 'does not comment on the existence or nonexistence of confidential investigations.' A nonprofit with more than 40 years of experience, MOHELA in its 2023 year in review said it helped more than 6 million borrowers enter repayment, facilitated 3.1 million customer service calls, and processed $17 billion in federal loan forgiveness for more than 258,000 borrowers on behalf of the U.S. Department of Education. Attorney General Andrea Campbell's office declined to comment about the Yahoo! Finance report that attorneys general in Washington, New York, Pennsylvania, Colorado, Illinois, Massachusetts and the District of Columbia 'have all filed so-called civil investigative demands seeking information from MOHELA.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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