In March, Warren invited Scott Giles — the CEO of servicer MOHELA — to testify before the Senate banking committee on April 10 at a hearing entitled “MOHELA’s Performance as a Student Loan Servicer.”
But, according to a letter first obtained by Politico, it looks like Giles will not be showing up. On behalf of the company, attorneys from law firm Kirkland and Ellis wrote in an April 3 letter to Warren that while Giles will not be in attendance for the public hearing next week, “senior members of its team would welcome the opportunity” to hold private, bipartisan briefings to address issues Warren raised in her invitation, including MOHELA’s management of the Public Service Loan Forgiveness program.
“Your staff has identified three major areas of concern, and we propose to address each of them over a period of several weeks, and after those bipartisan briefings are complete MOHELA is prepared to address the possible need for a hearing, including a CEO-level hearing,” the letter said. “However, we ask that you not prejudge the need for a hearing until you have had an opportunity to digest MOHELA’s briefings and perspective.”
The attorneys requested that Warren hold off on a public hearing for now in place of the briefings to allow MOHELA to answer her questions while “focusing on its primary mission of serving student borrowers who are at the center of all its work.”
But that didn’t suffice for Warren. She told Business Insider that “MOHELA botched millions of people’s student loan payments — forcing people to pay incorrect, higher amounts, delaying student loan forgiveness, and forcing some people to make payments on debts that should have already been canceled.”
“The millions of Americans impacted by MOHELA’s errors deserve answers,'” she said.
MOHELA released a statement on Monday saying that “the organization is actively engaged in conversations with the Subcommittee and has offered its cooperation in addressing any questions and concerns by participating in a series of bipartisan briefings on the identified areas of interest about student loan servicing.”
Why Warren wants a hearing
Warren’s request to Giles for a hearing outlined a range of concerns with MOHELA she hoped to address — primarily regarding PSLF, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.
She wrote that MOHELA was responsible for “impeding public servants’ access to PSLF relief,” citing a recent report from an advocacy group accusing the company of failing to process borrowers’ PSLF applications in a timely manner which blocked them from debt relief.
A MOHELA spokesperson said in response to the report that “any claims that MOHELA does not act in the best interest of the borrowers we serve as a federal contractor is simply not true.”
Notably, MOHELA will no longer be the sole servicer for PSLF beginning in May. The Education Department is pausing the processing of PSLF applications next month as it transitions borrowers accounts to several different servicers, and the program will be “fully managed” by the department, according to recent guidance.
Additionally, MOHELA was the first federal servicer since the return to repayment in October to receive punishment from the Education Department for failing to fulfill some of its contractual obligations. At the end of October, the Education Department withheld over $7 million in pay from MOHELA after it did not send on-time billing statements to 2.5 million borrowers — and in January, the other remaining federal servicers had varying amounts of pay withheld for the same reason.
