Teachers union files lawsuit against MOHELA, claims business misleads borrowers

COLUMBIA, Mo. (KMIZ)

A teachers labor union filed a lawsuit against the Higher Education Loan of Authority of the State of Missouri, also known as MOHELA, over claims the business misled borrowers.

The American Federation of Teachers -- a teachers union based out of Washington D.C. -- represents 1.8 million public school teachers, health care workers and other public service workers across the United States.

AFT President Randi Weingarten said the lawsuit comes after numerous attempts made by the union to address issues.

"Instead of actually helping borrowers, they maliciously and malevolently hurt them," Weingarten said. "So, we brought a consumer lawsuit. We've, we've tried to stop it with some of the student debt groups..we went to them, we did reports you know they basically say no, no, no we haven't done anything wrong."

The lawsuit, filed on Monday in the U.S. District Court in Washington D.C. alleges that MOHELA:

• Fails to bill some borrowers and inaccurately bills others
• Fails to accurately and timely process important borrower IDR, PSLF and refund applications
• Misleads and withholds information from borrowers
• Subjects borrowers to dropped calls and hour long holds
• Blocks borrowers access to account information
• Illegally took funds from borrowers' account without consent

In a statement sent to ABC 17 News, a MOHELA spokesperson said:

“Providing support to student loan borrowers is the utmost priority to MOHELA, and any claims to the contrary are false. MOHELA will vigorously defend against the allegations in the complaint," the statement reads.

According to Weingarten, one of the biggest issues the lawsuit looks to address is the inability for borrowers to get into contact with someone that works for the company. Weingarten referred to this as a "deflection process," adding that people can be on the phone for hours without ever actually getting to talk to a person.

Weingarten said the purpose and hopes of the lawsuit is to hold the company accountable.

"We want them to do their job," Weingarten said. "These people who have loan debt have taken out loans to go to college to have a better life. They have a right to get the public service loan forgiveness, to get the other kinds of loan forgiveness that is available."

The lawsuit requests a jury trial.