Missouri student loan provider baffled by inclusion in supreme court debt relief challenge

Newly released emails obtained by the Student Borrower Protection Center reveal employees at a student loan service provider in Missouri expressed confusion over the state’s attorney general placing the provider at the center of a lawsuit filed to block the Joe Biden’s student loan forgiveness plan.

The United States supreme court is expected to issue a ruling on a legal challenge to the president’s student debt forgiveness of up to $20,000 in the coming weeks. That challenge – filed by the Missouri attorney general and five other Republican-led states – and another challenge filed by the conservative advocacy organization, Job Creators Network, made it to the supreme court.

The Missouri Higher Education Loan Authority – or Mohela – is at the center of the challenge by the GOP-led states, claiming the loan service provider would lose revenue and face negative impacts over its financial obligations to Missouri. Consumer advocates, meanwhile, have pointed out that Mohela stands to gain revenue from Biden’s cancellation plan.

In court hearings on the challenges earlier this year, US supreme court justices questioned why Mohela did not bring its own legal challenges to Biden’s debt cancellation plan and how the Republican-led states could claim harm on their behalf.

Emails released since establish that Mohela employees expressed similar confusion.

“The [Missouri] state AG needed to claim that our borrowers were harmed for standing, so they’re making us look bad by filing this not only with [Missouri] on it, but especially bad because they filed it in [Missouri],” wrote a Mohela employee in September 2022.

Another Mohela employee asked in an October 2022 email: “just out of curiosity, is MOHELA apart of the lawsuit going on to prevent the loan forgiveness? Are we the bad guys?”

A fellow employee responded, “Mohela isn’t technically a part of that lawsuit, the Missouri AG is suing on their behalf. However, it’s all about the [Family Federal Education Loans] stuff, and since they changed the rules, that lawsuit should be ruled as lacking standing.”

Ella Azoulay, a Student Borrower Protection Center research and policy analyst, argued the emails confirmed the “partisan hack job” of Missouri’s lawsuit to block student debt relief.

The legal challenges have paused Biden’s student debt relief plan announced in August 2022. The relief plan would grant up to $20,000 in student debt relief for Pell grant recipients and up to $10,000 in student debt forgiveness for all other borrowers with annual incomes under $125,000. Nearly 26 million Americans had applied for relief under the plan by November 2022.