student at libraryThe Higher Education Loan Authority of the State of Missouri (MOHELA) is known among the top ten loan servicing organizations in the United States. MOHELA was established in 1981 for the sole purpose of offering student loans on behalf of the federal government. Loans like Federal Stafford Loan and Federal PLUS Loan were given by this organization in the form of MOHELA student loans. The purpose of MOHELA student loans was to provide students in need with easy, student-friendly loans marked by low interest rates and convenient repayment terms. The federal government didn’t require a credit check for these loan programs and paid the interest for the subsidized federal loans on behalf of the student during his/her education and grace period after graduation. Since July 1, 2010, the federal government has decided that all its student loans will be directly provided by the federal government; however, it may still use organizations like MOHELA for servicing these loans.

Details of MOHELA Student Loans

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Students applied for a MOHELA student loan by submitting their Free Application for Federal Student Aid (FAFSA). The FAFSA was used by the government officials to determine the actual financial need of the student for paying for college. This information was then provided to the college in the form of the Student Aid Report (SAR); the financial aid officials at the college used it to compile a financial aid package. Federal grants, loans, institutional scholarships, etc. were usually a part of this package. MOHELA was responsible for offering a very large number of the federal loans and was a point of contact for the student for repayment, deferment requests, etc. In fact, the U.S. Department of Education named MOHELA as an exceptional performer for providing quality loan services in 2006. However, due to the changes in policy undertaken by the government, all new federal loans are now being offered directly by the federal government through the Federal Direct Loan Program as the federally-guaranteed student loan program (FFELP) has been abolished; however, any student who received a MOHELA student loan before 2010 has to continue making his/her payments to MOHELA according to the agreed terms.

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