Student-loan borrowers eligible for debt cancellation might be 'forced back into repayment' anyway because of their servicer's poor customer service, 6 Democratic senators say

• Six Democratic lawmakers asked the Education Department to look into the student-loan company MOHELA.
• They said paperwork delays could force borrowers who qualifed for PSLF relief back into repayment.

A group of Democratic lawmakers are concerned student-loan borrowers may soon have to enter repayment — even if they qualify for debt relief.

On Thursday, Sen. Bob Menendez of New Jersey led five of his Democratic colleagues, including Sen. Elizabeth Warren, in sending a letter to the education secretary, Miguel Cardona, regarding the treatment of borrowers enrolled in the Public Service Loan Forgiveness program. PSLF is intended to forgive student loans of government and nonprofit workers after 10 years of qualifying payments, and borrowers within that program have their loans managed by the student-loan company MOHELA.

The lawmakers, however, wrote in the letter first viewed by Insider that borrowers serviced by MOHELA had reported a range of concerns with the company, including long wait times to contact customer service, issues receiving credit for the qualifying payments they'd made toward PSLF, and delays in getting refunds for borrowers who'd received forgiveness through PSLF.

"With the restart of repayments, these issues are likely to worsen for borrowers," the lawmakers said in the letter.

"As the Department explores ways to ensure that borrowers are held harmless with the restart of repayments, it is vital that you not overlook these issues," they continued. "Borrowers who are eligible to have their debt cancelled under the PSLF program should not be forced back into repayment due solely to MOHELA's processing delays, which cause difficult financial situations for so many borrowers. The Administration assured public service workers across the country that the PSLF program would be fixed, yet MOHELA appears to be continuing a legacy of lost paperwork, long call wait times, and processing errors and delays."

While borrowers approved for relief can request to be placed on forbearance, the lawmakers said, they might not even be aware they have that option.

Sens. Angus King, Alex Padilla, Ed Markey, and Cory Booker were also among the letter's signatories. They requested that before payments resume on October 1, Cardona delivers a response to questions concerning MOHELA, including tools the Education Department has to hold MOHELA accountable for PSLF processing delays, along with current data on call-hold times and abandoned-call rates for borrowers who have contacted the company.

This is not the first time MOHELA has been under scrutiny for its management of federal borrowers' balances. A couple of weeks before the student-loan payment pause ended on September 1, Democratic Reps. Katie Porter and Joe Courtney sent a letter to Scott Giles, MOHELA's CEO, similarly expressing concerns with PSLF processing delays that had kept borrowers in repayment limbo.

Some borrowers have also previously told Insider of the hurdles they've encountered when attempting to get a status update on their PSLF applications. One borrower said he simply wanted to confirm the payments he'd made qualified for the program. But instead, he spent hours on hold and never got an answer.

"The first time I tried to call was a 144-minute estimated wait time," he said. "The second time I called was a 149-minute wait. And then, most recently, I tried to call, and it was 50 minutes. And each of these times, I didn't have time to wait. I thought it would be a quicker call. And one time, I stayed on the call for nearly three hours."

While MOHELA is not the only servicer that's been hit with customer service concerns, borrowers in PSLF are relying on it to properly administer debt relief once they qualify and process their paperwork in a timely manner. Scott Buchanan, the executive director of the Student Loan Servicing Alliance — a group that represents federal loan servicers — previously told Insider the delays came down to a lack of resources the Education Department could offer due to limited congressional funding.