Senators Question MOHELA After Reports of False Delinquency Notices
By Maria Carrasco, NASFAA Staff Reporter
A group of nine senators last week questioned MOHELA’s operations involving borrowers after reports indicated that the student loan servicer sent delinquency notices to borrowers who were not delinquent on their loans.
The senators, led by Sens. Elizabeth Warren (D-Mass.) and Jeff Merkley (D-Ore.), sent a letter to Scott Giles, MOHELA’s executive director and CEO, and copied Education Secretary Linda McMahon, outlining a report from Forbes that the servicer sent an unknown number of delinquency notices to borrowers who were not actually delinquent on their student loans. Notably, these incorrect notices included warnings that the borrowers were “severely past due,” that “Payment in Full is Required” on their loans, or that they were at risk of wage garnishment.
MOHELA responded to a request for comment from NASFAA, saying it is "aware that some borrowers have raised concerns indicating they received inappropriate delinquency notifications."
"Any such matters are thoroughly reviewed and addressed by MOHELA," the servicer wrote via email.
As Forbes reports, this mistake caused widespread panic and confusion among these borrowers. The senators noted it is currently unclear how many borrowers received these false notices, whether any borrowers paid the incorrect amounts outlined in the notices, and whether this issue has been resolved. The letter included examples of the incorrect notices, including one case in which a borrower's account showed an erroneous "total amount due" of over $10,000.
“This error is a failure that has not only been highly distressing for borrowers but could have led to direct financial harm,” the senators wrote. “If a borrower does not realize that their false delinquency notice was issued in error and believes that they are on the verge of default, they might make the payment MOHELA has claimed they are responsible for, unnecessarily spending hundreds or even thousands of dollars. To make matters worse, if these false delinquencies have been sent to credit bureaus, borrowers’ credit scores could drop.”
The senators called on MOHELA to publicly disclose this error, correct all affected borrowers’ accounts, notify all affected borrowers that they are not delinquent, and ensure that false delinquency notices are no longer sent.
The senators also called on the Department of Education (ED) to rehire the servicer oversight team and resume assessing servicer accuracy, after a Government Accountability Office (GAO) report urged the department to address gaps in its loan servicer oversight following layoffs.
The senators listed nine questions for MOHELA to answer by September 10. Those questions included: how many borrowers MOHELA sent false delinquency notices to, why MOHELA sent false delinquency notices, when MOHELA plans to notify affected borrowers about this error, and more.
Publication Date: 9/1/2026
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