The Higher Education Loan Authority of the State of Missouri, aka the Missouri Higher Education Loan Authority, or MOHELA, is one of the largest holde
rs and servicers of student loans nationwide. Headquartered in Chesterfield, MO, MOHELA’s mission is to “eliminate barriers for students so they can access higher education.” To this end, MOHELA provides student and parent borrowers direct access to higher education loans and resources to help plan for higher education. In addition, MOHELA sponsors interest rate reduction for qualified borrowers, several student loan consolidation plans and loan forgiveness programs.
Today, as a secondary market in the Federal Family Education Loan Program (FFELP), MOHELA services and purchases student loans in cooperation with national and local lending institutions. MOHELA owns and services more than $5.4 billion in student loans and services for other lenders a student loan portfolio in excess of $1 billion.
rs and servicers of student loans nationwide. Headquartered in Chesterfield, MO, MOHELA’s mission is to “eliminate barriers for students so they can access higher education.” To this end, MOHELA provides student and parent borrowers direct access to higher education loans and resources to help plan for higher education. In addition, MOHELA sponsors interest rate reduction for qualified borrowers, several student loan consolidation plans and loan forgiveness programs.Today, as a secondary market in the Federal Family Education Loan Program (FFELP), MOHELA services and purchases student loans in cooperation with national and local lending institutions. MOHELA owns and services more than $5.4 billion in student loans and services for other lenders a student loan portfolio in excess of $1 billion.
Secured
A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security - a lien on the title to the house - until the mortgage is paid off in full. If the borrower defaults on the loan, the bank woul
d have the legal right to repossess the house and sell it, to recover sums owing to it.
In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter - often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.
A type of loan especially used in limited partnership agreements is the recourse note.
A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security - a lien on the title to the house - until the mortgage is paid off in full. If the borrower defaults on the loan, the bank woul
d have the legal right to repossess the house and sell it, to recover sums owing to it.In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter - often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.
A type of loan especially used in limited partnership agreements is the recourse note.
Abuses
Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorised, it could be considered a loan sha
rk.
Usury is a different form of abuse, charging excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous "extra charges" [1]
Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.
Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorised, it could be considered a loan sha
rk.Usury is a different form of abuse, charging excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous "extra charges" [1]
Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.
History and structure
As a “public instrumentality and body politic and corporate of the State of Missouri,” MOHELA was created in 1981 by legislation signed into law by Governor Christopher S. “Kit” Bond. MOHELA was established to “…assure that all eligible post-secondary education stud
ents have access to student loans” (RSMo 173.360). The “authority” is governed by seven board members operating on alternating five-year terms; five of whom are appointed by the Governor of the State of Missouri, subject to the advice and consent of the Senate of the State of Missouri, and two others are representatives from the Missouri Coordinating Board of Higher Education – one of which is a permanent seat to be filled by that agency’s commissioner.
Initial funding to establish operations came from a $65 million bank letter of credit, guaranteed by several of the then members, and was repaid following the issuance of bonds. Since that original issue, MOHELA has generated its own funding from beginning to present day. From its humble beginnings with fewer than ten employees, MOHELA has grown to almost 300 full-time staff members and works with students, schools and lenders in all 50 states.
As a “public instrumentality and body politic and corporate of the State of Missouri,” MOHELA was created in 1981 by legislation signed into law by Governor Christopher S. “Kit” Bond. MOHELA was established to “…assure that all eligible post-secondary education stud
ents have access to student loans” (RSMo 173.360). The “authority” is governed by seven board members operating on alternating five-year terms; five of whom are appointed by the Governor of the State of Missouri, subject to the advice and consent of the Senate of the State of Missouri, and two others are representatives from the Missouri Coordinating Board of Higher Education – one of which is a permanent seat to be filled by that agency’s commissioner.Initial funding to establish operations came from a $65 million bank letter of credit, guaranteed by several of the then members, and was repaid following the issuance of bonds. Since that original issue, MOHELA has generated its own funding from beginning to present day. From its humble beginnings with fewer than ten employees, MOHELA has grown to almost 300 full-time staff members and works with students, schools and lenders in all 50 states.
Income and finance
MOHELA supports its mission and pays operating costs exclusively from revenues derived from its own operations. Net income from student loans is typically between one cent to half a cent on every dollar. MOHELA is able to increase borrower benefit programs and decrease loan interest rates as a result of favorable federal laws and market conditions. With the aid of lender and school partners and the reinvestment of capital into student and family benefits, MOHELA is able to successfully support its mission along with the community of students and adults who would not otherwise be able to further their education.
National recognition
MOHELA
was named an "Exceptional Performer" by the U.S. Department of Education in 2006. As one of 18 lenders and servicers recognized nationwide, MOHELA maintains a compliance performance rating of 97 percent or higher in converting federal student loans to repayment, collecting delinquent loans, and filing timely claims with guaranty agencies. In order to maintain this honored designation, MOHELA must meet certain quarterly and annual audit requirements. MOHELA was ranked 12th on the U.S. Department of Education's Top 100 Current Holders of FFELP Loans for Fiscal Year 2005.
Types of student loans owned and serviced by MOHELA
Federal Subsidized and Unsubsidized Stafford Loans
Federal Perkins Loans
Federal PLUS Loans
Federal GradPLUS Loans
Federal Student Loan Consolidation
Private Alternative Loans
MOHELA supports its mission and pays operating costs exclusively from revenues derived from its own operations. Net income from student loans is typically between one cent to half a cent on every dollar. MOHELA is able to increase borrower benefit programs and decrease loan interest rates as a result of favorable federal laws and market conditions. With the aid of lender and school partners and the reinvestment of capital into student and family benefits, MOHELA is able to successfully support its mission along with the community of students and adults who would not otherwise be able to further their education.
National recognition
MOHELA
was named an "Exceptional Performer" by the U.S. Department of Education in 2006. As one of 18 lenders and servicers recognized nationwide, MOHELA maintains a compliance performance rating of 97 percent or higher in converting federal student loans to repayment, collecting delinquent loans, and filing timely claims with guaranty agencies. In order to maintain this honored designation, MOHELA must meet certain quarterly and annual audit requirements. MOHELA was ranked 12th on the U.S. Department of Education's Top 100 Current Holders of FFELP Loans for Fiscal Year 2005.Types of student loans owned and serviced by MOHELA
Federal Subsidized and Unsubsidized Stafford Loans
Federal Perkins Loans
Federal PLUS Loans
Federal GradPLUS Loans
Federal Student Loan Consolidation
Private Alternative Loans
