Employees Confused at Student-Loan Company Named in Case Blocking Debt Relief

  • Employees at student-loan company MOHELA were confused about their role in one of the lawsuits blocking debt relief.
  • That’s according to newly released emails obtained by the Student Borrower Protection Center.
  • MOHELA has denied involvement in the case, and Supreme Court justices were skeptical of its standing.

If one of the lawsuits seeking to block President Joe Biden’s student-loan forgiveness was confusing to you, you’re not alone. Employees at a company central to the lawsuit felt the same.

Late last year, six GOP-led states filed one of the lawsuits that blocked Biden’s plan to cancel up to $20,000 in student debt for federal borrowers, arguing it would hurt their states’ tax revenues and the revenue of student-loan company MOHELA. But it appears MOHELA employees weren’t given a heads-up they would be called into this major lawsuit.

On Friday, advocacy group the Student Borrower Protection Center released new internal emails from MOHELA via a Missouri Sunshine Law request filed in October 2022. Not only do the emails show employees’ confusion about the company’s role in the lawsuit, but also their questions surrounding the lawsuit’s standing. 

“Did we know in advance this was going to happen? Have complaints been made to the AG about us or is he making that up to give him cause for calling us out?” one employee wrote on September 29, the same day the lawsuit was filed.

“No, I think MOHELA was opposed to this move, but couldn’t do anything about it. The MO 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 MO on it, but especially bad because they filed it in MO,” another employee responded, referring to the burden a plaintiff has to prove they would directly be harmed by the challenged policy, like student-debt relief.

And later, on October 12, an employee asked: “just out of curiosity, is MOHELA apart of the lawsuit going on to prevent the loan forgiveness? Are we the bad guys?”

In November, following a request for information from Missouri Rep. Cori Bush, MOHELA denied any involvement in the lawsuit, with the company writing in its response to Bush that “MOHELA’s executives were not involved with the decision of the Missouri Attorney General’s Office to file for the preliminary injunction in federal court on September 29, 2022.”

Still, during oral arguments at the Supreme Court in February, James Campbell, a solicitor general for Nebraska who represented the six GOP-led states, defended MOHELA’s role in the case. Missouri has an “ultimate interest in the property of MOHELA, Campbell said during arguments, adding that “we believe as a matter of law that the state has the authority to assert its interests.”

MOHELA’s employees wouldn’t seem to agree, according to sentiments expressed in the emails. “It has nothing to do with us, except that they’re using the MO consumers harm as standing. No complaints about MOHELA that I’m aware of had anything to do with this,” one employee wrote on September 29.

Ella Azoulay, SBPC’s research and policy analyst, said in a statement that “MOHELA’s own staff agree—the case currently before the Supreme Court that is holding up debt relief for tens of millions of borrowers lacks standing, and it should be tossed aside.”

MOHELA did not immediately respond to Insider’s request for comment.

Millions of borrowers are waiting for the Supreme Court to issue its final decision on the legality of Biden’s debt relief, which could happen in the coming weeks. It’s unclear how the court will rule, but as Insider reported on Thursday, conservative Justice Amy Coney Barrett has joined liberal justices in being critical of plaintiffs’ standing in prior decisions — and it could shed light on how the nation’s highest court might handle Biden’s student-loan forgiveness.

Do you work at MOHELA or another student-loan company and want to share your story? Reach this reporter at asheffey@insider.com.

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