If you’re looking for a MOHELA lawsuit you can join or collect money from, there isn’t one yet. Multiple cases are pending in federal courts against the Missouri Higher Education Loan Authority, including a high-profile suit brought by the American Federation of Teachers, but none has been certified as a class action and none has produced a settlement fund for borrowers. The flagship case is currently paused for settlement talks, with the next court deadline set for July 17, 2026.
The AFT Case Against MOHELA
The most closely watched suit was filed on July 22, 2024, by the American Federation of Teachers in D.C. Superior Court and later moved to the U.S. District Court for the District of Columbia (Case No. 24-cv-02460). The AFT is represented by the Student Borrower Protection Center (now Protect Borrowers), the National Consumer Law Center, and Selendy Gay.1AFT. Embattled Student Loan Servicing Giant MOHELA Hit With Groundbreaking Consumer Protection Lawsuit
The complaint alleges MOHELA violated the District of Columbia’s Consumer Protection Procedures Act by overcharging borrowers, missing paperwork deadlines, and misleading people about their accounts. Central to the case is what the AFT calls a “call deflection” scheme: routing borrowers away from live agents and toward self-help tools that couldn’t fix their problems. The filing says the practices made it “practically impossible for all 8 million MOHELA borrowers to obtain assistance with their loans.”1AFT. Embattled Student Loan Servicing Giant MOHELA Hit With Groundbreaking Consumer Protection Lawsuit The original complaint notes that the Department of Education has paid MOHELA more than $1.1 billion since 2011 to staff call centers, while MOHELA’s operating revenues climbed from $114.7 million in fiscal year 2022 to $358.6 million in fiscal year 2023.2AFT. AFT v. MOHELA Complaint
On January 15, 2026, the AFT filed an amended complaint saying MOHELA’s practices had continued. It cited federal data showing MOHELA had the worst customer service record among the five major federal servicers: callers waited roughly seven times longer than at EdFinancial and more than 50 times longer than at Aidvantage, CRI, or NelNet, and MOHELA’s caller abandon rate was above 14 percent while other servicers stayed at 5 percent or less.3National Consumer Law Center. MOHELA Hit With Fresh Charges of Ongoing Student Loan Mismanagement
In a joint status report, both sides asked for a 60-day pause to continue “good-faith discussions” toward a settlement. The court set July 17, 2026, as the deadline for the parties to either present a deal or lay out plans to resume litigation. MOHELA has denied the allegations and said many of its servicing rules come from the Department of Education itself.4Yahoo News. High-Stakes Lawsuit Against Student Loan Servicer
Other Pending Lawsuits Against MOHELA
Joy v. MOHELA
Filed December 11, 2023, in the U.S. District Court for the Eastern District of Missouri (Case No. 4:23-cv-01590), this was the first putative class action against MOHELA after the return to repayment. Plaintiffs Jennifer Joy and Misty Thomas allege MOHELA failed to properly service their federal loans. Missouri filed a supporting brief in December 2024 arguing MOHELA is an arm of the state entitled to sovereign immunity. The case remained pending as of early 2025.5Sauder Schelkopf. Joy v. MOHELA Complaint6U.S. Supreme Court. MOHELA Certiorari Amicus Brief
Morgan v. MOHELA
Filed January 26, 2024, in the same court (Case No. 4:24-cv-00147), this putative class action names both MOHELA and the U.S. Department of Education as defendants. Plaintiffs allege MOHELA failed to timely process Public Service Loan Forgiveness applications, with some sitting for over a year. They cite the Fair Debt Collection Practices Act, New York consumer protection law, and California’s Unfair Competition Law, among other statutes. The case was still pending in early 2025.7ClassAction.org. MOHELA Lawsuit Filed Over Alleged Failure to Timely Process Federal Student Loan Forgiveness Applications
Maldonado v. MOHELA
Filed September 4, 2024, in California state court and later moved to the U.S. District Court for the Northern District of California, this case concerns loan discharges the Department of Education had already ordered for former students of six predatory for-profit schools, including Corinthian Colleges, ITT Technical Institute, and Westwood College. The complaint says MOHELA continued reporting discharged debts to credit agencies and demanded payments from borrowers who owed nothing. The plaintiffs are represented by the Project on Predatory Student Lending.8Project on Predatory Student Lending. Maldonado v. MOHELA
On March 10, 2026, Judge Vince Chhabria issued a partial summary judgment finding MOHELA violated the California Student Borrower Bill of Rights and the California Unfair Competition Law by misrepresenting loan obligations in billing statements after borrowers’ loans appeared on Department of Education discharge lists. Open issues include which specific plaintiffs’ loans qualify and whether MOHELA has a valid defense under the Rosenthal Act. The case has not been certified as a class action, and MOHELA has moved to strike the class definition.8Project on Predatory Student Lending. Maldonado v. MOHELA
Can MOHELA Claim Sovereign Immunity?
MOHELA has argued in several of these cases that it is an arm of Missouri and therefore shielded by the Eleventh Amendment. Courts have rejected the argument. The Tenth Circuit in Good v. MOHELA found MOHELA failed to prove arm-of-the-state status, noting it receives no direct financial help from Missouri, raises its own revenue, does not employ state workers, and does not bind Missouri to pay judgments against it. The Supreme Court denied MOHELA’s petition for review on March 23, 2026.9U.S. Supreme Court. Good v. MOHELA Brief in Opposition10SCOTUSblog. Missouri Higher Education Loan Authority v. Good Federal servicing contracts awarded in April 2023 also prohibit servicers from asserting sovereign or qualified immunity in servicing misconduct suits.11National Consumer Law Center. New Federal Student Loan Servicing Contracts
Can Borrowers Join or Collect From Any of These Cases?
Not at this point. None of the lawsuits has been certified as a class action. There is no settlement fund, no claims form, and no sign-up. If a court eventually certifies a class in any of the pending cases, affected borrowers would generally receive direct notice and an opportunity to participate or opt out at that time.12Protect Borrowers. Fact Sheet: The MOHELA Lawsuit
Be cautious of any website or caller offering to enroll you in a “MOHELA lawsuit” or promising a payout. Legitimate class action notices come through the court-approved notice process after certification, not through solicitation.
Government Actions Running Alongside the Lawsuits
Federal and state enforcement has moved faster than the litigation, and some of it has practical consequences for borrowers.
In October 2023, the Department of Education withheld $7.2 million from MOHELA after the servicer failed to send billing statements on time to 2.5 million borrowers during the first month of the return to repayment, causing more than 800,000 to be marked delinquent.13Student Loan Borrower Assistance. Over 3.2 Million Borrowers Impacted by Servicing Errors During First Month of Repayment14Project on Predatory Student Lending. Borrower Advocates Applaud New MOHELA Enforcement Actions15Sen. Elizabeth Warren. Warren, Senators Blast MOHELA for Abusing Borrowers With Potentially Illegal, Exploitative Terms of Use
The Department has confirmed it will transfer part of MOHELA’s Public Service Loan Forgiveness portfolio to other servicers during 2026, though it described the move as “load-balancing” rather than a penalty. A Department official said “MOHELA’s performance is steadily showing progress.”16Forbes. Student Loans With This Servicer Will Be Transferred Within Months, Says Department of Education If your account is transferred, you’ll receive notice and don’t need to take action to preserve your repayment or forgiveness progress.
State attorneys general have also opened investigations, including in Washington, New York, Pennsylvania, Colorado, Illinois, Massachusetts, and D.C., with California’s Department of Financial Protection and Innovation and Oregon’s Division of Financial Regulation running separate inquiries.17Yahoo Finance. Widely Criticized Student Loan Servicer MOHELA Faces Investigation by Multiple State Attorneys General
A Senate investigation led by Elizabeth Warren, released in December 2024, found that a botched 2023 loan transfer from Nelnet to MOHELA generated nearly 2 million duplicate entries on borrower credit reports, affecting more than 200,000 people and dropping credit scores for roughly 14,000. No compensation was offered by the servicers or credit bureaus.18Sen. Elizabeth Warren. Senate Investigation Reveals MOHELA May Have Contributed to Nearly 2 Million Student Loan Duplication Errors
What to Do If You’re Having Problems With MOHELA Now
Because the lawsuits offer no immediate remedy, individual complaints remain the fastest route for most borrowers. File with the Consumer Financial Protection Bureau, with your state attorney general’s office, and with the Department of Education’s Office of Federal Student Aid. If you believe you qualify for Public Service Loan Forgiveness or a for-profit school discharge and your application has stalled, the Department of Education’s ombudsman and legal aid organizations that specialize in student loans can help push things along.
Keep copies of your billing statements, payment records, and any written communication with MOHELA. If a class action is later certified in one of these cases, that documentation is what you’ll need to show you were affected.