Maldonado v. MOHELA

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On September 4, 2024, California student borrowers filed a lawsuit alleging that the Missouri Higher Education Loan Authority (MOHELA) failed to implement student loan discharges ordered by the Department of Education. 

The Department of Education released these borrowers from further obligation to repay, but the lawsuit states that MOHELA, one of the largest federal student loan servicers in the United States, never processed the discharges, never issued authorized refunds to the borrowers, continues reporting the debts to credit reporting agencies as current obligations, and has been illegally demanding payments from the student borrowers. 

Borrowers are demanding that their loan discharges be implemented immediately and that MOHELA immediately stop its inaccurate treatment and reporting of their accounts.  

On April 9, 2025, the U.S. District Court for the Northern District of California denied MOHELA’s motion to dismiss the complaint. On May 9, 2025, the court set a hearing on the Plaintiffs’ forthcoming motion for class certification for January 22, 2026. That same day, MOHELA filed a motion for judgment on the pleadings, again asking the court to dismiss the complaint. Plaintiffs will file their opposition to that motion on June 6, 2025. 

About Maldonado v. MOHELA

“I walked into Heald with a goal of bettering myself and instead fell into a Venus flytrap. For years, I assumed this debt would loom over my head for the rest of my life. When the Corinthian group discharge was announced, it felt like a huge weight was lifted — they told us we didn’t have to do a thing and our loans would be canceled.

Two years later, I’m still fighting for answers and the relief I was promised, wondering if this was just another trap.”

— Jaime Maldonado, a plaintiff who attended Heald, a Corinthian school

“The Department of Education sent a letter saying my ITT loans would be canceled and no action was needed, but instead I’ve spent hours going back and forth between MOHELA and the Department trying to sort through their incompetence. These loans are invasive and affect every aspect of your life – my wife and I have even put off having kids because of this debt.

I keep hearing in the news about the Department approving more discharges, but we still haven’t seen ours. They can’t keep messing with people’s lives and making empty promises.”

— Jeff Plamondon, a plaintiff who attended ITT Technical Institute

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