What Is the MOHELA Lawsuit?
The MOHELA lawsuit is a set of separate court cases against the Higher Education Loan Authority of the State of Missouri over student loan servicing. No single case or class action covers all of them.
MOHELA is a Missouri public instrumentality created by state law in 1981. It now services federal student loans for the U.S. Department of Education. The American Federation of Teachers, California borrowers and Missouri borrowers each sued MOHELA separately.
The best documented case is American Federation of Teachers v. MOHELA, No. 1:24-cv-02460, in the U.S. District Court for the District of Columbia. It is a consumer protection suit, not a class action.
“Plaintiff American Federation of Teachers ("AFT"), on behalf of itself, its members, and the general public, by and through its counsel, brings this action against the Higher Education Loan Authority of the State of Missouri ("MOHELA" or "Defendant") and alleges the following based upon information, belief, and the investigation of its counsel.”
Source: U.S. District Court for the District of Columbia, American Federation of Teachers v. Higher Education Loan Authority of the State of Missouri, No. 1:24-cv-02460-TSC, Amended Complaint, Doc. 50 (January 15, 2026)
Why Are People Filing MOHELA Lawsuits?
People are filing MOHELA lawsuits because borrowers and the American Federation of Teachers say MOHELA mishandled billing, forgiveness applications and discharges. They also say MOHELA made errors hard to correct. MOHELA denies the claims.
The AFT amended complaint says the U.S. Department of Education has paid MOHELA over $1.1 billion since 2011 to help borrowers with their loan options. The complaint alleges MOHELA failed at that job.
Public Service Loan Forgiveness drives much of the dispute. The AFT's original complaint says about 75% of its 1.8 million members are eligible for that program. The Morgan plaintiffs say MOHELA began servicing the program in 2022.
What Injuries Are Included in the MOHELA Lawsuit?
The injuries included in the MOHELA lawsuit are financial and administrative harms, not physical injuries. The five categories below follow the claims pleaded in the AFT, California and Missouri cases. MOHELA denies these allegations, and no court has ruled on most of them.
Delayed Forgiveness Applications
Public Service Loan Forgiveness cancels the remaining federal loan balance of eligible public service workers after 120 qualifying payments.
The Morgan plaintiffs allege MOHELA left some Public Service Loan Forgiveness applications undecided for more than a year. They say borrowers kept paying loans that should already have been forgiven.
The AFT complaint adds that MOHELA fails to process forgiveness and income-driven repayment applications on time or at all.
Overcharges and Wrong Payment Amounts
An overcharge is a bill for more than a borrower owes under the loan terms or the chosen repayment plan.
The AFT complaint says MOHELA used the wrong federal guidelines to calculate payments in October 2023. It alleges that error made 280,000 borrowers pay too much.
The complaint also alleges miscalculated balances and missing refunds, though MOHELA has denied wrongdoing.
Unprocessed Loan Discharges
A loan discharge cancels a borrower's duty to repay a loan, for example after a school's misconduct.
California borrowers in Maldonado allege MOHELA never carried out discharges the Department of Education announced for six for-profit schools. They say MOHELA also withheld refunds and kept demanding payment.
On March 10, 2026, the court ruled for the plaintiffs in part. It found MOHELA violated California's Student Borrower Bill of Rights in billing statements sent after the loans appeared on discharge lists.
Inaccurate Credit Reporting
Credit reporting is the monthly sharing of loan status with the consumer reporting agencies that compile credit reports.
The Maldonado plaintiffs allege MOHELA kept reporting discharged debts as current obligations. They ask the court to order MOHELA to correct how it reports their accounts.
Blocked Access to Customer Service
Call deflection is a practice of steering callers toward self-service tools instead of live representatives.
The AFT alleges MOHELA designed a scheme to keep borrowers away from live representatives. It says many servicing tasks can only be done by a representative.
The AFT's January 2026 announcement cited federal data. It showed a MOHELA call abandonment rate above 14%, while no other main servicer exceeded 5%.
Who Qualifies for the MOHELA Lawsuit?
You may qualify if:
- You are a California resident with a federal loan from Corinthian Colleges, ITT Technical Institute, Marinello Schools of Beauty, Westwood College, the Art Institutes or CollegeAmerica's Colorado campuses, which fits the proposed Maldonado class
- You submitted a Public Service Loan Forgiveness application that MOHELA has not decided, which matches the allegations in the Morgan case
- MOHELA services your federal loans and you believe it overcharged you, misapplied payments or ignored a discharge
You may not qualify if:
- Your loans are serviced by a company other than MOHELA, such as Nelnet
- You live outside California and are looking at the Maldonado class, which is proposed for California residents only
- You are an AFT member hoping to join the union's case, which is not a class action
No court has certified a class in any MOHELA case, according to public trackers, so no one can currently join one. This summary describes who the cases cover, and only a qualified attorney reviewing your records can say whether you have a claim.
What Is the Current Status of the MOHELA Lawsuit?
The current status of the MOHELA lawsuit is mixed. The AFT case and the California Maldonado case remain pending. No settlement has been made public, and public trackers report no certified class. This page could not confirm the current status of the Missouri Morgan case or any docket activity after September 2026.
American Federation of Teachers v. MOHELA, No. 1:24-cv-02460-TSC
The American Federation of Teachers sued MOHELA in D.C. Superior Court on July 22, 2024. MOHELA removed the case to federal court on August 26, 2024 under the federal officer removal statute.
On September 29, 2025, U.S. District Judge Tanya S. Chutkan denied the union's motion to remand. She also denied MOHELA's motion to dismiss without prejudice. Her opinion found MOHELA's state sovereign immunity defense colorable for removal purposes, without deciding whether it succeeds.
| Proceeding Type | Consumer protection suit by a union for itself, its members and the public (not a class action, not an MDL) |
| Court | U.S. District Court for the District of Columbia (removed from D.C. Superior Court No. 2024-CAB-004575) |
| Judge | U.S. District Judge Tanya S. Chutkan |
| Claims | Three counts under the D.C. Consumer Protection Procedures Act, one each for the AFT, its members and the general public |
| Relief Sought | A declaration, treble damages or $1,500 per violation, injunctive relief, punitive damages, interest and attorneys' fees |
| AFT Counsel | Protect Borrowers, the National Consumer Law Center and Selendy Gay PLLC |
| Settlement Status | No settlement made public; public docket summaries report a pause for settlement talks in 2026 |
The AFT filed an amended complaint on January 15, 2026. This page could not verify docket entries after the September 2026 reports of a joint status report.
Maldonado v. MOHELA (N.D. Cal.)
Jaime Maldonado, Jeff Plamondon and other California borrowers filed Maldonado in Alameda County Superior Court on September 4, 2024. MOHELA removed it to the Northern District of California on November 8, 2024.
Judge Vince Chhabria denied MOHELA's motion to dismiss on April 9, 2025. He denied its motion for judgment on the pleadings on July 8, 2025. A class has been proposed but not certified.
| Proceeding Type | Proposed class action by California borrowers (no class certified) |
| Court | U.S. District Court for the Northern District of California (removed from Alameda County Superior Court) |
| Judge | Judge Vince Chhabria |
| Claims | California Student Borrower Bill of Rights and California Unfair Competition Law, plus a debt collection claim that remains open |
| Relief Sought | Implementation of the ordered discharges, refunds and corrected account reporting |
| Plaintiffs' Counsel | Project on Predatory Student Lending, Jubilee Legal and Kemnitzer, Barron & Krieg, LLP |
| Latest Ruling | March 10, 2026 order granting and denying summary judgment in part for each side |
Morgan v. MOHELA, No. 4:24-cv-00147 (E.D. Mo.)
Spencer Morgan, Francis Novak and Rowena Koenig sued MOHELA, the Department of Education and then Secretary Miguel Cardona in the Eastern District of Missouri. Top Class Actions reported the suit alleges delays on forgiveness applications.
The plaintiffs seek nationwide, New York and California classes. A law firm tracker reports that Missouri borrower suits in that district were dismissed without prejudice on September 29, 2026 on sovereign immunity grounds. This page found no court document or second source, so treat that report as unconfirmed.
| Proceeding Type | Proposed nationwide class action (no class certified, per public trackers) |
| Court | U.S. District Court for the Eastern District of Missouri |
| Defendants | MOHELA, the U.S. Department of Education and the Secretary of Education, as named when filed |
| Claims | Unjust enrichment, negligence, breach of fiduciary duty, breach of contract, and violations of the New York Student Loan Servicers Act and the Fair Debt Collection Practices Act |
| Plaintiffs' Counsel | The Simon Law Firm PC and Sauder Schelkopf LLC |
| Current Status | Not independently confirmed |
Did MOHELA Settle the Lawsuit?
No. MOHELA has not announced a settlement in any of the MOHELA lawsuits, and no court has approved one.
Public docket summaries report that the AFT case was paused for settlement talks in 2026. Talks are not an agreement, and this page could not confirm any deal.
The AFT's prayer for relief asks for damages paid to the union, either treble damages or $1,500 per violation. An AFT settlement would not automatically pay individual borrowers.
No claim form, claims deadline or payout amount exists for any MOHELA case. A site offering one is not describing a court-approved MOHELA settlement.
The Maldonado plaintiffs seek discharges, refunds and corrected credit reporting for specific borrowers. Those remedies differ from a shared cash fund.
MOHELA Lawsuit Updates
Here are the latest MOHELA lawsuit updates, covering new court filings, rulings, and case-count reports as they're confirmed. As of November 2026, the AFT, California and Missouri MOHELA cases remain in active pretrial litigation with no settlement announced. The full timeline below covers every verified development since the first case was filed.
Full MOHELA Lawsuit Timeline
Court Rules for Maldonado Plaintiffs in Part
Judge Vince Chhabria granted and denied summary judgment in part for both sides in Maldonado v. MOHELA on March 10, 2026. He found MOHELA violated the California Student Borrower Bill of Rights and the Unfair Competition Law. The finding covers its billing statements and communications to the plaintiffs.
AFT Files an Amended Complaint
The American Federation of Teachers filed its amended complaint against MOHELA in the District of Columbia federal court on January 15, 2026. The filing says MOHELA's practices affect more than 6.5 million borrowers.
Judge Chutkan Denies Remand and Dismissal
U.S. District Judge Tanya S. Chutkan kept AFT v. MOHELA in federal court on September 29, 2025 and denied MOHELA's motion to dismiss without prejudice. Her memorandum opinion called MOHELA's state sovereign immunity defense colorable.
Maldonado Court Denies Judgment on the Pleadings
The Northern District of California denied MOHELA's motion for judgment on the pleadings in Maldonado on July 8, 2025, without a hearing. MOHELA had filed the motion on May 9, 2025.
Maldonado Court Denies Motion to Dismiss
Judge Chhabria rejected MOHELA's motion to dismiss the California borrowers' claims on April 9, 2025. MOHELA answered the complaint two weeks later.
MOHELA Removes Maldonado to Federal Court
MOHELA moved Maldonado from Alameda County Superior Court to the Northern District of California on November 8, 2024. The case began two months earlier under California consumer protection laws.
AFT Seeks Remand and MOHELA Seeks Dismissal
The AFT moved on September 25, 2024 to send its case back to D.C. Superior Court. MOHELA filed its own motion to dismiss the same month, and the court ruled on both a year later.
California Borrowers File Maldonado
Borrowers represented by the Project on Predatory Student Lending sued MOHELA in Alameda County Superior Court on September 4, 2024. They allege MOHELA never carried out discharges for six for-profit schools.
MOHELA Removes the AFT Case to Federal Court
MOHELA removed AFT v. MOHELA from D.C. Superior Court to the federal court in Washington on August 26, 2024. It relied on the federal officer removal statute and federal question jurisdiction.
AFT Sues MOHELA in Washington, D.C.
The American Federation of Teachers filed its consumer protection complaint against MOHELA in D.C. Superior Court on July 22, 2024. The union said it spent more than 2,000 staff hours helping members with MOHELA problems.
AFT and SBPC Publish the MOHELA Papers
The AFT and the Student Borrower Protection Center released a joint investigation of MOHELA on February 28, 2024. It alleges a call deflection strategy that kept borrowers from live customer service representatives.
Supreme Court Decides Biden v. Nebraska
The U.S. Supreme Court blocked President Biden's student debt relief plan in Biden v. Nebraska on June 30, 2023. Missouri's standing to sue rested on claimed harm to MOHELA, which is why the servicer's name became widely known.
How to File a MOHELA Lawsuit
Below are the 6 steps involved in filing a MOHELA lawsuit.
- Identify which MOHELA case fits your situation: The AFT, California and Missouri cases cover different harms, and none is currently open for new participants.
- Collect your MOHELA account records: Save billing statements, payment histories, discharge or forgiveness notices and any messages you sent through the MOHELA portal.
- Document your Public Service Loan Forgiveness paperwork: Keep the submission dates and confirmation numbers of every forgiveness or income-driven repayment form you filed.
- Submit a complaint to a regulator: The Consumer Financial Protection Bureau and your state attorney general accept servicing complaints, and a complaint creates a dated record.
- Talk to a consumer protection attorney: Only a qualified attorney can say whether you have an individual claim or a deadline problem.
- Use only official sources for case updates: Court dockets and the plaintiffs' counsel sites are reliable, while pages promising a MOHELA payout are not.
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What Evidence Supports a MOHELA Lawsuit Claim?
Evidence that supports a MOHELA lawsuit claim is mostly account records that show what MOHELA billed, promised and did. The strongest records carry dates.
Useful records include billing statements and payment histories. Discharge or forgiveness notices from the Department of Education help, as do submission confirmations for PSLF and income-driven repayment forms. Credit reports show how a loan was reported.
Call logs and portal messages can show attempts to fix an error. Whether any record is enough depends on the claim and the court.
What Did MOHELA Allegedly Know About Its Servicing Problems?
MOHELA has said it denies the allegations and will defend itself vigorously. In a statement to Higher Education Dive in July 2024, it called any claims that it fails borrowers false.
The AFT alleges MOHELA knew its responsibilities and ignored them. In fall 2023, the Department of Education said MOHELA failed to send billing statements on time to 2.5 million borrowers. It withheld a $7.2 million payment.
MOHELA sent a cease-and-desist notice in April 2024 to the Student Borrower Protection Center over the MOHELA Papers report. It called the report false and sensationalized and said it hired nearly 3,000 staff between September 2021 and February 2024.
| Party | Role | Position |
|---|---|---|
| MOHELA | Missouri public instrumentality and federal student loan servicer; defendant in all three cases | Denies wrongdoing; asserts state sovereign immunity in the AFT case |
| American Federation of Teachers | Plaintiff suing for itself, its members and the public | Says MOHELA's failures are systemic business decisions |
| U.S. Department of Education | Federal agency that contracts with MOHELA; named in the Morgan case | Withheld a $7.2 million payment over late billing statements in 2023 |
No court has found that MOHELA knew of or caused the harms alleged. These statements are allegations and responses, not findings.
How Does the MOHELA Lawsuit Compare to Related Cases?
The MOHELA lawsuit differs from three related matters that searchers often confuse with it, and each is legally distinct.
| Matter | What It Involves | Relationship to This Case |
|---|---|---|
| Biden v. Nebraska (U.S. Supreme Court, 2023) | A challenge to President Biden's student debt relief plan, decided June 30, 2023 | Missouri's standing rested on claimed harm to MOHELA, but MOHELA was not sued for misconduct there |
| Sweet v. Cardona borrower defense settlement | A class settlement against the Department of Education for students of defrauding schools | The Project on Predatory Student Lending says MOHELA's slow discharge processing stalled relief for class members |
| Nelnet lawsuit | A $10 million data breach class settlement over a 2022 attack on a different student loan servicer | Different servicer and different harm; not part of the MOHELA cases |
None of these matters creates a claim process against MOHELA.
Frequently Asked Questions
What is the MOHELA lawsuit about?
The MOHELA lawsuit is about how MOHELA, a Missouri student loan servicer, handles federal loan billing, forgiveness applications and discharges. Separate cases by the American Federation of Teachers, California borrowers and Missouri borrowers allege errors, delays and overcharges. MOHELA denies wrongdoing.
Is the MOHELA lawsuit a class action or an MDL?
The MOHELA lawsuit is not an MDL as far as this page could find. Public trackers report that no court has certified a class in any MOHELA case. The AFT case is a single-plaintiff suit, while the California and Missouri cases propose classes.
Did MOHELA settle the lawsuit?
No, MOHELA has not announced a settlement in the lawsuit, and no court has approved one. Public docket summaries report that the AFT case was paused for settlement talks in 2026. This page could not confirm a deal.
Can I join the MOHELA class action lawsuit?
No, you cannot currently join a MOHELA class action lawsuit because no court has certified a class. The proposed California class would cover only California residents with loans from six listed schools.
What is the AFT v. MOHELA lawsuit?
The AFT v. MOHELA lawsuit is a consumer protection case the American Federation of Teachers filed on July 22, 2024 under D.C. law. It is now pending in federal court before Judge Tanya S. Chutkan and seeks damages for the union plus court orders fixing MOHELA's servicing.
Is the MOHELA lawsuit the same as the Biden student loan forgiveness case?
No, the MOHELA lawsuit is not the Biden student loan forgiveness case. In Biden v. Nebraska, Missouri's standing rested on claimed harm to MOHELA, and MOHELA was not sued for misconduct there.