March 26, 2024
By Joseph Sauder

On March 21, 2024, the Biden administration announced the approval of $5.8 billion in student debt relief for approximately 78,000 borrowers under the Public Service Loan Forgiveness (“PSLF”) Program. Three months prior to this announcement, Sauder Schelkopf LLC, a national consumer rights law firm, filed a class action lawsuit against the Missouri Higher Education Loan Authority (MOHELA), the company contracted to service the PSLF Program, alleging failures to timely process PSLF applications. Allegations surfaced that MOHELA’s customer service representatives were blaming the Department of Education as a partial cause for the PSLF application delays. Sauder Schelkopf then filed another PSLF class action lawsuit naming the United States Department of Education as a defendant along with MOHELA.

“Following the filing of our class action lawsuits, the Department of Education and Biden administration have taken a step in the right direction, but there are still numerous issues left to resolve,” said Joe Kenney of Sauder Schelkopf. “Our lawsuits seek to rectify the failures of both MOHELA and the Department of Education to timely process PSLF applications, some of which have been pending for nearly 600 days. As the Biden-Harris announcement recognizes, the nation’s public servants should not be forced to face ‘logistical troubles and trap doors’ when they seek the loan forgiveness to which they are entitled.”

While the forgiveness of a small fraction of the total number of PSLF applications months after the Department of Education was named as a defendant in the class action lawsuit is encouraging, there are still many unresolved issues that require immediate attention. In addition to the reported backlog of 800,000 unprocessed applications, borrowers are still not provided with accurate information about the status of their applications and are unable to get answers from MOHELA or the Department of Education. “These failures are unacceptable and need to be remedied for the remaining borrowers and public servants who continue to make payments on loans that should have been forgiven,” said Joe Kenney.

The class action cases, Joy v. Higher Education Authority of the State of Missouri, 4:23-cv-01590, and Morgan v. Higher Education Authority of the State of Missouri, No. 4:24-cv-00147, are currently pending in the United States District Court for the Eastern District of Missouri.

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Sauder Schelkopf has a nationally recognized litigation practice. The firm currently serves as court-appointed lead counsel in courts across the country.  The attorneys at Sauder Schelkopf have recovered over $500 million on behalf of their clients and class members. Our firm was recognized by the Legal Intelligencer’s 2022 Professional Excellence Awards. The Legal Intelligencer’s Professional Excellence Awards honor Pennsylvania law firms and attorneys who have significantly impacted the legal profession. Our firm was named in the Litigation Departments of the Year (Specialty Area category; runner-up), an award that honors the best litigation practice in a small or mid-sized firm in Pennsylvania. This recognition was based on the firm’s 2021 litigation work and its important ongoing cases. LawDragon has recognized our attorneys in its list of the “500 Leading Plaintiff Consumer Lawyers” for 2022.  This list notes: “From the opioid epidemic to toxic substances and defective products, truck accidents to wildfires and sexual abuse, these are the lawyers who stand on the front line in individual lawsuits and class actions seeking justice.” Mr. Schelkopf was named to Pennsylvania’s Best Lawyers® 2022 for Class Actions/Mass Tort Litigation. The American Lawyer named Mr. Sauder to its 2021 Northeast Trailblazers. The honor recognizes 60 lawyers who are “truly agents of change.” It “recognizes professionals in the Northeast who have moved the needle in the legal industry.” The Legal Intelligencer named Mr. Sauder and Mr. Schelkopf in its 2020 Pennsylvania Trailblazers list recognizing 31 lawyers who “have taken extra measures to contribute to positive outcomes . . . and who are truly agents of change.” The Legal highlighted the firm’s innovative work on advocacy as class counsel in large institutional sex abuse cover-ups, women’s, and children’s rights. Our attorneys have also consistently been recognized by their peers being named to Pennsylvania SuperLawyer, a distinction held by the top 5% of attorneys in Pennsylvania.  The National Trial Lawyers Association has also selected our attorneys as the Top 100 Trial Lawyers in Pennsylvania.

We Want to Hear from You

If you are enrolled in PSLF and MOHELA is your student loan servicer, please contact the attorneys at Sauder Schelkopf by filling out the form on this page.

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