Higher Education Loan Authority of the State of Missouri
The Higher Education Loan Authority of the State of Missouri, aka the Missouri Higher Education Loan Authority, or MOHELA, is one of the largest holders and servicers of student loans nationwide. Headquartered in Chesterfield, MO, MOHELA’s mission is to “eliminate barriers for students so they can access higher education.” To this end, MOHELA provides student and parent borrowers direct access to higher education loans and resources to help plan for higher education. In addition, MOHELA sponsors interest rate reduction for qualified borrowers, several student loan consolidation plans and loan forgiveness programs.
Today, as a secondary market in the Federal Family Education Loan Program (FFELP), MOHELA services and purchases student loans in cooperation with national and local lending institutions. MOHELA owns and services more than $5.4 billion in student loans and services for other lenders a student loan portfolio in excess of $1 billion.
History and structure
As a “public instrumentality and body politic and corporate of the State of Missouri,” MOHELA was created in 1981 by legislation signed into law by Governor Christopher S. “Kit” Bond. MOHELA was established to “…assure that all eligible post-secondary education students have access to student loans” (RSMo 173.360). The “authority” is governed by seven board members operating on alternating five-year terms; five of whom are appointed by the Governor of the State of Missouri, subject to the advice and consent of the Senate of the State of Missouri, and two others are representatives from the Missouri Coordinating Board of Higher Education – one of which is a permanent seat to be filled by that agency’s commissioner.
Initial funding to establish operations came from a $65 million bank letter of credit, guaranteed by several of the then members, and was repaid following the issuance of bonds. Since that original issue, MOHELA has generated its own funding from beginning to present day. From its humble beginnings with fewer than ten employees, MOHELA has grown to almost 300 full-time staff members and works with students, schools and lenders in all 50 states.
Income and finance
MOHELA supports its mission and pays operating costs exclusively from revenues derived from its own operations. Net income from student loans is typically between one cent to half a cent on every dollar. MOHELA is able to increase borrower benefit programs and decrease loan interest rates as a result of favorable federal laws and market conditions. With the aid of lender and school partners and the reinvestment of capital into student and family benefits, MOHELA is able to successfully support its mission along with the community of students and adults who would not otherwise be able to further their education.
MOHELA was named an "Exceptional Performer" by the U.S. Department of Education in 2006. As one of 18 lenders and servicers recognized nationwide, MOHELA maintains a compliance performance rating of 97 percent or higher in converting federal student loans to repayment, collecting delinquent loans, and filing timely claims with guaranty agencies. In order to maintain this honored designation, MOHELA must meet certain quarterly and annual audit requirements. MOHELA was ranked 12th on the U.S. Department of Education's Top 100 Current Holders of FFELP Loans for Fiscal Year 2005.
Types of student loans owned and serviced by MOHELA
- Federal Subsidized and Unsubsidized Stafford Loans
- Federal Perkins Loans
- Federal PLUS Loans
- Federal GradPLUS Loans
- Federal Student Loan Consolidation
- Private Alternative Loans
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