Press Release
Loan Servicer Revoking Forgiveness Puts New York’s Student Loan Borrowers at Risk: Servicers Must Be Held Accountable for Their Mistakes
In a shocking turn of events, MOHELA, a prominent student loan servicer, has announced the rescindment of forgiveness previously granted to student loan borrowers. This unprecedented decision by MOHELA to reinstate forgiven balances is not only unconscionable but deeply troubling for the borrowers who have relied on this relief in good faith.
It is imperative for MOHELA and the U.S. Department of Education to intervene swiftly and rectify this unjust action. Borrowers who have diligently followed the procedures and relied on the forgiveness offered should not bear the burden of such reversals. This is a stark reminder of the urgent need to hold student loan servicers accountable for their errors and omissions.
A mere apology will not suffice. It is time for meaningful action to be taken to address the financial hardship and distress caused to borrowers who have been impacted by this reversal of forgiveness. The trust placed in loan servicers and the United States government is in jeopardy of being completely broken as a result of these loan reinstatements. To restore faith in the system, MOHELA must honor the original forgiveness and treat their borrowers with fairness and respect.
We call upon MOHELA and the U.S. Department of Education to prioritize the well-being of student loan borrowers and to ensure that such unjust actions are not repeated in the future. The time for accountability is now.
Impacted borrowers can file a complaint with Federal Student Aid at studentaid.gov/feedback-center/ or by calling the FSA Ombudsman at 1-877-557-2575. If you live in New York, you can file a complaint with the New York State Department of Financial Services (DFS) at dfs.ny.gov/complaint. New Yorkers can also get free, unbiased, and confidential help by contacting the Education Debt Consumer Assistance Program (EDCAP) by phone at 1-888-614-5004 or by emailing edcap@cssny.org.
EDCAP, which is funded by New York State, is a program of the Community Service Society of New York (CSS). Since its launch in 2019, EDCAP has helped New Yorkers go to school with less debt, apply for Public Service Loan Forgiveness (PSLF) and Income Driven Repayment Forgiveness (IDRF), get out of default, avoid wage garnishments and social security offsets, resolve disputes with loan servicers, access other relief programs, and much more.