Have you recently graduated from college? The summer can seem like the perfect opportunity to relax and de-stress. After all, you spent four years (or more) working hard in school. However, if you have MOHELA student loans, it’s time to start preparing for repayment.
Your grace period is typically six months — and the time can fly by. Having the answer to “Who is my student loan servicer?” and knowing how to navigate your payments are solid starts.
There are nine federal loan servicers, including the Higher Education Loan Authority of the State of Missouri, also known as the Missouri Higher Education Loan Authority or MOHELA.
If you have MOHELA student loans, here’s what you need to know, including…
- MOHELA student loans basics
- Navigating MOHELA’s website
- Making MOHELA payments
- What to do if you can’t afford payments
- MOHELA customer service
- Managing your loans
MOHELA has been around for nearly 40 years. The company is headquartered in St. Louis with approximately 530 employees and offices in Columbia, Missouri, and Washington, D.C.
MOHELA services loans under the direct loan and Federal Family Education Loan (FFEL) programs. If MOHELA is your federal student loan servicer, you’ll make payments directly to it. You can contact its customer service team to ask questions or discuss repayment options.
The company also services private student loans.
It’s a good idea to set up your online account before your grace period ends. Registering for an account will allow you to see your loan balance and make payments electronically.
Go to MOHELA’s homepage and click “Create an Account.” You’ll need to enter your Social Security number, date of birth and last name. You then will be asked to create a username and password.
Once you create your account, you can log in to make payments or check your loan balance.
If you prefer to check your student loans on the go, MOHELA has iPhone and Android apps. You can make payments or upload necessary forms via your smartphone.
MOHELA allows you to make payments in several ways:
- Sign up for automatic payments: Reduce the risk of missing payments by signing up for auto-debit. You may receive a 0.25% interest rate reduction.
- Make payments by phone: You can make payments anytime, day or night, via MOHELA’s automated phone line at 888-866-4352.
- Mail a check or money order: Before sending a payment, contact customer service to find out where to send it. The mailing address varies depending on your account information.
- Make one-time payments at MOHELA.com: If you want to make a regular payment — or a lump-sum one after a windfall — you can do so on its website.
- Use your bank’s bill pay service: Check with your financial institution or a bill pay service provider to see if you can pay your MOHELA student loans bill that way.
How MOHELA applies payments
Your MOHELA student loans accrue interest based on your total balance and the amount of time between payments. When you make a payment, the loan servicer first applies the money toward any outstanding fees, then accrued interest. The rest of your payment goes toward the principal.
For borrowers with multiple loans, MOHELA applies your payment proportionately across all loans, unless you note otherwise. If you’d like to target a specific loan, you can select the specific loan online or make a request via phone or mail.
If you want to pay off your loans quicker, you’ll have to let MOHELA know. The default setting is to advance your next payment due date.
If you want to make the extra payment without reducing your next bill, you can submit special payment instructions online or by calling customer service.
If you’re unable to keep up with your student loan payments, the lender offers several options to reduce or postpone your payments.
Loan payback assistance
MOHELA offers adjusted repayment terms and income-driven plans. Each plan has different requirements but can provide major benefits, ranging from paying less interest on your loans to loan forgiveness.
Plans based on length of repayment include:
Plans based on income include:
- Revised Pay as You Earn (REPAYE)
- Pay as You Earn (PAYE)
- Income-based repayment (IBR)
- Income-contingent repayment (ICR)
- Income-sensitive repayment
If none of these work for you, MOHELA encourages you to call the company at 888-866-4352 to discuss other options.
Deferment and forbearance
If you are dealing with a temporary financial hardship, such as an illness or unemployment, you might qualify for a deferment or forbearance. With these options, you can stop making payments for a set period without damaging your credit report.
A deferment allows you to temporarily postpone payments on your loans. During this period, subsidized loans will not accrue interest. MOHELA offers the following types of deferments:
- In-school deferment
- Unemployment deferment
- Economic hardship deferment
- Military deferment
- Cancer treatment deferment
The type of deferment you seek will affect how long it lasts. For example, unemployment and economic hardship deferment are for up to three years.
MOHELA advises forbearance should be requested as a last resort. But if you need it, it also allows you to temporarily postpone loan payments. During this time, you’re responsible for interest on both subsidized and unsubsidized loans.
Mandatory forbearances are granted to eligible borrowers for the following reasons:
- Medical or dental internship or residency forbearance
- Student loan debt burden forbearance
- National service forbearance
- Teacher loan forgiveness forbearance
- Department of Defense loan repayment program forbearance
- National Guard forbearance
- Natural disaster forbearance
As with deferments, the length of your forbearance depends on the type you’re seeking. For example, you can get natural disaster forbearance for up to three months.
If you have questions or issues with your MOHELA student loans, you can call the customer service line at 888-866-4352 from 7 a.m. to 9 p.m. Central time Monday through Thursday and 7 a.m. to 5 p.m. Central time Friday. The phone line has an automated system, so you will need to know your loan account number or your Social Security number to continue.
MOHELA has an A+ rating with the Better Business Bureau, but only one out of five stars from customers. Some of the complaints include difficulty getting in touch with customer service representatives and a confusing process for paying off loans early.
If you contact customer service but are not satisfied with their response, you can escalate your problem to a MOHELA ombudsman by submitting a request online. A student loan ombudsman is a neutral third party who works with you and the servicer to reach a resolution.
Once you submit a formal request, the ombudsman will research the issue and contact you for more information as needed.
When it comes to managing your student loans, putting them off or ignoring them during your grace period is one of the worst things you can do.
By taking action now and coming up with a plan ahead of time for your MOHELA student loans, you can ensure you’re on track with your repayment.
Laura Woods contributed to this report.