Skip to main content
HL1Housing Living 101

How MOHELA Handles Your Student Loan Payments

By Tanika Patel
9 minute read

What MOHELA does with your student loan payment

MOHELA (Missouri Higher Education Loan Authority) is a loan servicer — the company that collects your monthly payment, applies it to your balance, and sends you statements. MOHELA does not decide whether you owe the loan or set the interest rate. Your loan's original lender (often the U.S. Department of Education) owns that. MOHELA's job is to process what you send in, track what you owe, and tell you about programs that might lower your payment or forgive the balance.

When you make a payment to MOHELA, the money goes into a federal account, not into MOHELA's pocket. MOHELA keeps a record of the payment, updates your account balance, and reports the transaction to credit bureaus. If you fall behind, MOHELA is also responsible for contacting you and explaining what happens next — including whether you can pause payments, lower them, or enter a forgiveness program.

MOHELA services federal student loans only. If you have private student loans, a different company handles those. You can find out who services your federal loans by logging into studentaid.gov and checking your loan details, or by calling the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).

Key Takeaways

  • MOHELA collects your payment and applies it to your loan balance, but does not own your loan or set your interest rate.
  • You can make payments online at MOHELA's website, by phone, by mail, or through automatic bank withdrawal (ACH).
  • If you cannot afford your current payment, MOHELA can explain income-driven repayment plans that may lower it to $0 per month.
  • Payments made during a period of forbearance or deferment do not count toward Public Service Loan Forgiveness, even though they reduce your balance.
  • If you stop paying without contacting MOHELA, your loan enters default after 270 days, which damages your credit and can trigger wage garnishment.

How to send MOHELA a payment

MOHELA accepts payments through four methods. The fastest and most common is online payment through your MOHELA account at mohela.com. You log in, enter the amount, choose the date, and the money leaves your bank account within one to three business days. You can also set up a one-time payment or recurring automatic payments this way.

Automatic bank withdrawal (ACH) is the most reliable method if you want payments to happen without you thinking about them each month. You give MOHELA your bank account and routing number, and the payment comes out on a date you choose. ACH transfers typically clear within one to two business days. Some loan servicers offer a small interest rate reduction (usually 0.25%) if you enroll in autopay, though MOHELA's current policy varies — check your account or call 1-855-MOHELA-1 (1-855-664-3521) to confirm.

You can also pay by phone at 1-855-MOHELA-1, or by mail. If you mail a check, write your loan account number on the check and send it to the address listed on your statement. Mail payments take longer to process — typically five to ten business days — so mail early if you are close to a due date.

Do not send cash. Do not send payment to MOHELA's office address unless the statement specifically instructs you to. Payments sent to the wrong address or in the wrong form can be delayed or lost.

What happens if you cannot pay on time

If you know you cannot make a payment by the due date, contact MOHELA before the payment is late. MOHELA offers several options that do not require you to default on the loan. The first is forbearance, which temporarily pauses your payments for up to three years. During forbearance, interest still accrues on most loan types, meaning your balance grows even though you are not paying. Forbearance is useful if your hardship is temporary — a job loss, medical emergency, or income drop you expect to recover from.

The second option is deferment, which also pauses payments but may stop interest from accruing, depending on your loan type. Subsidized federal loans do not accrue interest during deferment; unsubsidized loans do. Deferment is typically available if you are in school, unemployed, or facing economic hardship. MOHELA will ask you to document the reason.

The third option is an income-driven repayment plan. These plans tie your monthly payment to your current income rather than to the loan balance. Depending on the plan, your payment could drop to $0 per month if your income is very low. The plans are: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR). Each has different rules about how much you pay and how long you pay. MOHELA can walk you through which plan fits your situation.

All three options — forbearance, deferment, and income-driven plans — stop your loan from going into default. However, only payments made under an income-driven plan count toward Public Service Loan Forgiveness. Payments made during forbearance or deferment do not count, even though they reduce your balance.

What default means and how to avoid it

If you do not make a payment for 270 days (about nine months), your loan enters default. This is the most serious status a loan can have. Once you default, MOHELA reports it to credit bureaus, which damages your credit score for seven years. A lower credit score makes it harder and more expensive to borrow money for a car, house, or anything else.

Default also triggers collection actions. The federal government can garnish your wages — meaning your employer is ordered to send part of your paycheck directly to pay down the loan. The government can also offset your tax refund, taking money you are owed and applying it to the debt. These actions happen without a court order for federal student loans.

If your loan is already in default, you can recover by rehabilitating it. Rehabilitation means making nine on-time payments (of any amount, even $5) within ten consecutive months. After the ninth payment, the default status is removed from your credit report, and your loan returns to normal status. You still owe the full balance, but you stop the wage garnishment and tax offset. MOHELA can set up a rehabilitation plan for you.

The other path out of default is consolidation, which combines your defaulted loan with other federal loans into a new Direct Consolidation Loan. Consolidation stops collection actions immediately, but it does not erase the default from your credit report — it stays for seven years. Consolidation is faster than rehabilitation if you need to stop garnishment right away.

Income-driven repayment plans explained

Income-driven plans are designed for borrowers whose loan payments are too high relative to what they earn. Instead of paying a fixed amount each month, you pay a percentage of your discretionary income — the amount left after basic living expenses. The exact percentage and the definition of "discretionary income" depend on which plan you choose.

Pay As You Earn (PAYE) caps your payment at 10% of discretionary income and forgives the balance after 20 years of payments. Income-Based Repayment (IBR) caps payment at 10% or 15% of discretionary income (depending on when you took out the loan) and forgives the balance after 20 or 25 years. Revised Pay As You Earn (REPAYE) also uses 10% but forgives after 20 years for undergraduate loans and 25 years for graduate loans. Income-Contingent Repayment (ICR) is the oldest plan and is less generous — it caps payment at 20% of discretionary income and forgives after 25 years.

To enroll in an income-driven plan, you must provide proof of income — usually your most recent tax return or a pay stub. MOHELA will calculate your payment based on that income. If your income changes, you can recertify once per year and your payment will adjust. If you do not recertify, MOHELA will estimate your income based on the previous year, which may not be accurate.

One important rule: if you are on an income-driven plan and you do not make a payment for 270 days, your loan still goes into default, even though your payment might be $0. You must stay in contact with MOHELA and recertify your income on time to keep the plan active.

Public Service Loan Forgiveness and MOHELA

If you work for a government agency or a nonprofit organization, you may be may be able to access for Public Service Loan Forgiveness (PSLF). This program forgives the remaining balance on your federal student loans after you make 120 on-time payments while working in a may have access to job. MOHELA does not decide whether you may have access to — the Department of Education does — but MOHELA processes your payments and can help you track your progress toward the 120-payment milestone.

To use PSLF, you must be on an income-driven repayment plan (or the standard ten-year plan). You must also work full-time for a may have access to employer. Every year, you can submit a Public Service Loan Forgiveness Employment Certification Form to MOHELA to verify your employment and count your payments. MOHELA will tell you how many payments count toward the 120 total.

A critical detail: only payments made under an income-driven plan count toward PSLF. Payments made during forbearance or deferment do not count, even though they reduce your balance. If you are pursuing PSLF, avoid forbearance and deferment. If you cannot afford your payment, switch to an income-driven plan instead — your payment may drop to $0, but the months still count toward forgiveness.

Frequently Asked Questions

Does MOHELA charge a fee to make a payment?

No. MOHELA does not charge a fee for payments made online, by phone, by ACH, or by mail. If a third-party website offers to process your MOHELA payment for a fee, that fee goes to the third party, not to MOHELA. Pay directly through mohela.com or by calling MOHELA to avoid unnecessary charges.

What if I paid MOHELA but the payment did not show up in my account?

Log into your MOHELA account and check the "Payment History" section. Payments typically appear within one to three business days for online or ACH payments, and five to ten days for mail. If it has been longer than that and the payment still does not appear, call MOHELA at 1-855-MOHELA-1 with your confirmation number or bank statement showing the payment was sent. MOHELA can trace the payment and apply it if it was lost.

Can I change my payment due date?

Yes. Log into your MOHELA account and select a new due date between the 1st and 28th of any month. The change takes effect on your next billing cycle. If you are on automatic payments, the new date applies to future automatic withdrawals. Changing your due date does not affect payments you have already made.

What if I want to pay extra toward my principal?

You can pay more than your monthly payment at any time, and MOHELA will apply the extra amount to your principal balance. This reduces the total interest you pay over the life of the loan. Make sure your payment is marked as "extra" or "principal payment" so MOHELA does not apply it to a future month's payment instead. You can specify this when paying online or by calling MOHELA.

If I move, do I need to tell MOHELA?

You do not need to update your mailing address for payment purposes — online and ACH payments do not depend on your address. However, updating your address ensures MOHELA can reach you by mail if there is a problem with your account. Update your address by logging into your account or calling 1-855-MOHELA-1.