MOHELA Student Loan: Student Loan Payment [Review]

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MOHELA Student Loan: Student Loan Payment [Review]

The Missouri Higher Education Loan Authority (MOHELA) is a student loan servicer headquartered in St. Louis. The loan servicer also has offices in South Carolina, Missouri, and Washington, D.C, and currently employs about 530 staff members.

In place since 1981, MOHELA student loans are among the top 10 loans available in the United States. The is a quasi-government entity, meaning that while they are partially supported by the government, they are not under the US Department of Education management.

According to MOHELA’S website, their mandate is to help students repay their student loans by providing guidance and solutions to their specific needs.

Note that they do not provide student loans, they simply loans after they have been made and disbursed.

MOHELA services loans under the Federal Family Education Loan (FFEL) and Direct Loan programs and your payments are made directly to them.

Do you have MOHELA student loans? is some information you may need to know.

How Did You End Up with MOHELA?

If you are wondering how your student loan ended up being assigned to MOHELA, a servicer comes into play after one of the following:

  1. You or your parents apply for a federal student loan.
  2. The US Department of Education approves the loan and funds are provided to the student aid office of your school of choice.
  3. After the funds have been disbursed and received, the government will hand over the account to one of its nine servicing agencies, which could be MOHELA. So your servicer is chosen by the Department of Education, not by you.

How Good is MOHELA?

The Department of Education tracks customer satisfaction scores which helps them monitor how well loan servicers are doing and to what extent they are keeping borrowers out of default.

According to Servicer Performance Metrics and Allocations, MOHELA is ranked as one of the better service providers. Out of all nine loan services MOHELA has:

  • Some of the highest percentages of borrowers that keep their loan payments current
  • Some of the lowest delinquency rates as of June 2018

What does this mean for MOHELA?

The US Department of Education rewards servicers who are high performing, so MOHELA’S business is expanding. Their achievements in the last several years include:

  • During a significant part of the 2016 to 2017 school year, 16% of all new federal student loans were passed on to MOHELA to service.
  • Two years later, during the 2018 to 2019 school year, that had increased to 20%, giving MOHELA the position of servicer which had more student loans assigned to it than any other servicer.

MOHELA Student Loans at a Glance

With 1 every 5 new federal student loans awarded to MOHELA, a lot of new borrows will end up with them.

If you’ve learned that MOHELA is your servicer it’s a good idea to familiarize yourself with their practices and understand how they can help you.

Your loan servicer helps you with everything from the time your loan is initially disbursed to the time it is finally paid off. This includes:

  • Making your payments
  • Arranging payment plans that suit your situation
  • Payback assistance
  • Deferment and forbearance
  • Forgiveness

Getting Started with MOHELA’S Website

As I’m sure you know, you have a grace period of 6 months after you finish school and before you start paying back your loan.

Don’t wait until your six months are up to set up your online account on MOHELA’S homepage. Having an account will give you access to your current balance and will allow you to make online payments.

Creating an account is easy, but you will need to provide or create the following:

  • Social Security
  • Date of birth
  • Full name
  • Username
  • Password

For those who prefer mobile options, MOHELA also has mobile apps for both Android and iOS. Both apps allow you to make payments and upload forms.

Making Your MOHELA Student Loan Payments

When it comes to making your payments, you have several options.

  • Automatic Payments. If you’re the forgetful type or you simply have too many balls in the air at the same time, signing up for automatic payments might be a good choice. And not only do you save yourself from the worry of missed payments, but you may also have an added bonus of 0.25% interest rate reduction. And while that may not sound like much, it could mean more than $1,000 over the course of your loan.
  • Payments by Phone. Day or night, 24/7, you can make payments via MOHELA’S automated phone line at 888-866-4352.
  • Send a Check or Money Order via Snail Mail. For those who don’t mind paying postage and bank fees on top of their student loan, this is an option. However, before mailing anything, be sure to contact MOHELA’S customer for the correct address. Not all accounts mail payments to the same address.
  • One-Time Payments. This can be done on MOHELA’S website and is good for any regular payments or lump sum payments.
  • Online Banking. Check with your bank or financial institution to see if they have MOHELA set up to receive MOHELA payments.

Paying Down Your MOHELA Student Loans

Once you have all of the administrative processes in place, is what happens when you begin making your loan payments.

Interest accrues from the time your loan is disbursed and is based on your balance and the amount of time between payments. Just as it would with any personal loans, every time you make a payment, the money is applied as follows:

  • First to any outstanding fees you may have.
  • Then to any accrued interest you may have.
  • Finally, the rest of your payment goes to paying down your principal.

If you have more than one loan serviced by MOHELA—and note they service private personal loans as well—they will apply for your payment across all loans, in proportion. They do this automatically, so if that’s not your preference, you need to notify them of that.

You also have the ability to target specific loans. This is a good idea if you have a loan with a higher rate of interest and want to pay it down faster. Simply select this loan when paying online or inform customer service over the phone.

If your circumstances now allow for you to pay off your loan quicker, let MOHELA know so arrangements can be made.

In the case where you would like to make an extra payment without impacting your next bill, there is the option to submit special payment instructions either online or over the phone.

How MOHELA Can Help You Pay Back Your Loan

MOHELA can help when you find yourself in a situation where you can’t afford to make payments.  This could include options to reduce or postpone your payments.

If MOHELA is servicing a federal student loan for you, there is also a good chance you are eligible for an income-driven repayment plan which will cap your payment based on your discretionary income.

Depending on the plan there are different requirements but regardless, they come with some significant benefits that could include lowering your interest rate of forgiving your loan.

There are a variety of plans that are based on the length of your repayment schedule. They include:

  • Extended repayment plans
  • Graduated repayment plans
  • Standard repayment plans

There are also several repayment plans that are based on your income. They include:

  • Income-based repayment (IBR)
  • Income-contingent repayment (ICR)
  • Income-sensitive repayment
  • Pay as You Earn (PAYE)
  • Revised Pay as You Earn (REPAYE)

Note that these are not the only options available, so if none of these fits your circumstances you are encouraged to connect with MOHELA so they can discuss other options with you. You can reach them at 888-866-4352.

Deferment and Forbearance

From time to time many of us find ourselves in a financial crisis. If this happens to you due to illness or unemployment you may qualify for deferment or forbearance. Both of these options allow you to cease payments on your loan for a set period without it impacting your credit.

  • Deferment allows you to stop making payments or reduce the amount of your monthly payments for up to three years in most cases.
  • Forbearance allows you to lower or suspend your loan payments for 12 months or less. With this type of assistance, you are still responsible for the interest that accrues over your forbearance period.


Under certain circumstances, you may be able to get your federal student loans forgiven. This applies to Direct Subsidized Loans and for anyone who still has a Perkins Loan.

Unfortunately, not a lot of people are eligible for it. To earn forgiveness, you must either:

  • Work for the public service
  • Have been paying your loan for at least 20 years and making all qualifying payments

Note there are further, individual requirements for each.

MOHELA Student Loans Review

If MOHELA is your federal student loan servicer, rest assured you are in good hands. The US Department of Education seems to favor them more than other student loan servicers.

Remember, it’s their promise to help students repay their student loans by providing guidance and solutions.  So never hesitate to contact them when you need help.