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The Department of Education is penalizing one of its student loan servicers for failing to send billing statements on time to 2.5 million borrowers.
The Department of Education's announcement comes a week after a department spokesperson said 305,000 federal student loan borrowers received an incorrect bill for October 2023 from MOHELA.
A Mohela spokesperson told BI that the servicer "is surprised by FSA's sudden change in direction and communication" after the Education Department recently gave it new borrower accounts.
Under the program, eligible public servants, including social workers and teachers, are able to have their debt cancelled after 10 years of service and 120 loan payments made on-time. [13] Student loan borrowers eligible for PSLF relief have filed suit against MOHELA, accusing the servicer of delaying the cancellation of their debt and forcing ...
"It increases our expenses to go overseas," says Justin Berg of American Profit Recovery, a debt collection agency in Massachusetts. "Our revenues are cut by more than half," he says. Nations may enter into agreements with the US to facilitate the collection of student loans. [105] After default, co-signers remain liable for repayment. [106] [107]
A borrower is considered to have defaulted when he or she fails to make required payments for 270 days. When a loan is in default, the principal and interest are due in full a well as collection costs. [2] The current default rate for the 1.56 trillion total outstanding dollars of debt among 44.7 million borrowers is 11.4%. [15]
It also alleges that MOHELA failed to adequately staff and train its call centers and that many borrowers are “deflected” away from these centers toward inadequate self-service resources.
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