MOHELA Class Action Lawsuit 2026, AFT Files Amended Complaint January 2026, Multiple Lawsuits Active—Eligibility, Status & What Borrowers Need to Know

MOHELA faces multiple active class action lawsuits as of February 2026, with no settlements reached. The American Federation of Teachers amended its consumer protection complaint on January 15, 2026, detailing ongoing servicing failures affecting 8 million borrowers. Separately, the Maldonado v. MOHELA case proceeds toward a March 5, 2026 hearing on motions for partial summary judgment, while a PSLF processing delay lawsuit (Morgan v. MOHELA) continues in Missouri federal court.

What Are the MOHELA Class Action Lawsuits About?

Three major class actions target the Missouri Higher Education Loan Authority (MOHELA) for allegedly violating consumer protection laws and breaching federal student loan servicing contracts. Each lawsuit addresses different servicing failures affecting millions of federal student loan borrowers nationwide.

The American Federation of Teachers filed its original lawsuit in July 2024 in DC Superior Court, alleging MOHELA illegally overcharged borrowers, failed to process paperwork timely, and actively misled borrowers about their accounts. The amended complaint filed January 15, 2026 adds new allegations showing MOHELA’s misconduct continued throughout 2025.

Maldonado v. MOHELA, filed September 4, 2024 in the U.S. District Court for the Northern District of California, alleges MOHELA failed to implement student loan discharges ordered by the Department of Education for borrowers who attended predatory for-profit colleges. Morgan v. MOHELA, filed February 2024 in the U.S. District Court for the Eastern District of Missouri, claims MOHELA unreasonably delayed processing Public Service Loan Forgiveness applications.

What Legal Claims Do the Lawsuits Assert?

The AFT lawsuit alleges violations of the Consumer Financial Protection Act, DC Consumer Protection Procedures Act, and state consumer protection laws. According to court documents, MOHELA engaged in ten unlawful servicing practices including miscalculating monthly payments, failing to apply payments correctly, charging unauthorized fees, mishandling income-driven repayment recertifications, and operating a “call deflection” scheme forcing borrowers to wait hours to speak with representatives.

The Maldonado case alleges breach of contract, breach of the implied covenant of good faith and fair dealing, and violations of California consumer protection statutes. Plaintiffs claim MOHELA continued reporting discharged debts to credit bureaus, demanded illegal payments, and refused to process lawful discharge orders affecting former students of Marinello Schools of Beauty, Corinthian Colleges, ITT Technical Institute, Westwood College, the Art Institute, and Colorado-based College America campuses.

Morgan plaintiffs assert claims for breach of contract and violations of the Administrative Procedure Act. The lawsuit alleges MOHELA and the Department of Education failed to process PSLF applications within reasonable timeframes, forcing borrowers to make payments on loans that should have been forgiven.

Who Is Eligible for These Lawsuits?

The AFT lawsuit seeks to represent all MOHELA borrowers who experienced illegal servicing practices between July 2019 and present. You may qualify if MOHELA services or serviced your federal student loans and you experienced payment miscalculations, processing delays, unauthorized charges, incorrect billing, or difficulty contacting customer service.

The Maldonado class includes California borrowers whose federal student loans were discharged by the Department of Education between April 2022 and May 2024 due to school misconduct, but MOHELA never processed the discharge. Qualifying schools include the six institutions listed above where the Department found widespread fraud and financial exploitation.

The Morgan PSLF class covers nationwide, New York, and California subclasses of borrowers who submitted Public Service Loan Forgiveness applications to MOHELA that remain unprocessed or undecided. This includes public service employees like teachers, nurses, and government workers waiting years for promised forgiveness.

What Is the Current Status as of February 2026?

None of the MOHELA lawsuits have reached settlement. The AFT case is in discovery following the amended complaint filed January 15, 2026. MOHELA previously filed motions to dismiss which were denied or partially denied.

In Maldonado, the Northern District of California denied MOHELA’s motion to dismiss on April 9, 2025 and denied MOHELA’s motion for judgment on the pleadings on July 8, 2025. MOHELA filed a motion for partial summary judgment on November 7, 2025. Plaintiffs filed opposition and a cross-motion for partial summary judgment on December 22, 2025. A hearing on both motions is scheduled for March 5, 2026.

The Morgan PSLF case remains pending in Missouri federal court with no trial date set. Class certification has not been granted in any of the three lawsuits as of February 2026.

How Does MOHELA Compare to Other Student Loan Servicers?

Federal government data included in the AFT’s amended complaint shows MOHELA has the worst customer service among the five main federal student loan servicers. MOHELA borrowers wait approximately seven times longer than EdFinancial borrowers to speak with representatives, and more than 50 times longer than borrowers with Aidvantage or CRI.

Nelnet class action lawsuit borrowers face similar issues including IDR payment miscalculations and processing delays. FedLoan Servicing faced multiple PSLF tracking error lawsuits before transferring all loans to MOHELA in 2021, suggesting systemic problems across the federal student loan servicing industry.

MOHELA services approximately 8 million federal student loan borrowers, making it one of the nation’s largest servicers. The company took over PSLF servicing responsibilities in summer 2022 during the COVID-19 payment pause.

What Are Potential Outcomes?

If plaintiffs prevail, MOHELA could face significant financial liability. The AFT lawsuit seeks damages, restitution for overcharged borrowers, injunctive relief requiring MOHELA to fix its servicing practices, and civil penalties under consumer protection laws. Legal experts suggest potential exposure could reach billions of dollars given the number of affected borrowers.

Maldonado plaintiffs seek immediate implementation of loan discharges, refunds of payments made after discharge, correction of credit reporting, and damages for emotional distress and financial harm. Successful class members could see their loan balances zeroed and receive refunds for wrongful collections.

Morgan PSLF plaintiffs want court orders requiring MOHELA and the Department of Education to process applications within specific timeframes, loan forgiveness for qualified borrowers, and refunds for payments made during improper delays. This could affect thousands of public service workers waiting years for promised relief.

Where to Find Official Court Information

Court documents for AFT v. MOHELA are available through the DC Superior Court electronic filing system. Maldonado v. MOHELA filings can be accessed via PACER for the Northern District of California. Morgan v. MOHELA documents are available through PACER for the Eastern District of Missouri (Case No. 4:24-cv-00147).

The Protect Borrowers organization (formerly Student Borrower Protection Center) maintains updated information at protectborrowers.org/litigation/mohela-lawsuit including complaint documents and press releases. The American Federation of Teachers posts case updates at aft.org.

Monitor these official sources for the March 5, 2026 Maldonado hearing outcome, class certification decisions, settlement announcements, and trial dates as litigation progresses.

Should You Consult an Attorney?

If you experienced significant financial harm from MOHELA’s servicing failures—such as denied loan forgiveness, credit damage from wrongful reporting, overcharges exceeding thousands of dollars, or foreclosure or default caused by servicing errors—consulting a consumer protection attorney is advisable.

Several law firms including Lieff Cabraser, the National Consumer Law Center, and Selendy Gay PLLC are actively investigating MOHELA claims. Many offer free case evaluations to determine whether you have individual claims worth pursuing outside the class actions.

File complaints with the Consumer Financial Protection Bureau at consumerfinance.gov/complaint, your state attorney general, and the Department of Education’s Federal Student Aid Ombudsman. These regulatory complaints create official records that may support class action claims or trigger government enforcement.

FAQs

What are the MOHELA class action lawsuits about?

Three major lawsuits allege MOHELA violated consumer protection laws by overcharging borrowers, failing to process loan discharges ordered by the Department of Education, and unreasonably delaying Public Service Loan Forgiveness applications. No settlements have been reached as of February 2026.

Who is eligible to file claims in these lawsuits?

Eligibility varies by case. The AFT lawsuit covers all MOHELA borrowers experiencing illegal servicing practices since July 2019. Maldonado covers California borrowers whose loans were discharged 2022-2024 but not processed. Morgan covers PSLF applicants whose applications remain unprocessed.

Is there a deadline to file a MOHELA class action claim?

No settlement claim deadlines exist yet since no settlements have been reached. However, statutes of limitations may apply to individual claims. Consult an attorney promptly if you experienced recent servicing failures to preserve your rights.

What documentation do I need to support my claim?

Save all MOHELA billing statements, payment history, correspondence, phone call logs, account screenshots, loan discharge notices from the Department of Education, PSLF application submissions, and evidence of financial harm like credit reports or mortgage denials caused by MOHELA errors.

What is the current settlement status?

No MOHELA settlements exist as of February 2026. All three major lawsuits remain in active litigation. The Maldonado case has a critical hearing scheduled March 5, 2026 on summary judgment motions that could significantly impact case outcomes.

How much could affected borrowers receive?

Settlement amounts are impossible to predict since no settlements have been negotiated. If lawsuits succeed, compensation could include refunds of overcharges, damages for credit harm, reimbursement for payments made on discharged loans, and loan forgiveness for PSLF-eligible borrowers.

Where can I find more information or file complaints?

Visit protectborrowers.org for lawsuit updates. File complaints at consumerfinance.gov/complaint (CFPB), your state attorney general’s website, and studentaid.gov/feedback-ombudsman (Federal Student Aid Ombudsman). Consult consumer protection attorneys for case evaluation.

Last Updated: February 13, 2026

Disclaimer: This article provides general information about MOHELA class action lawsuits and does not constitute legal advice.

Need Legal Help? Contact consumer protection attorneys specializing in student loan servicing for free case evaluations to determine your eligibility and legal options.

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About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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