How Federal Student Loan Payment Processing Works

MOHELA's Role

MOHELA is your loan servicer, but we don't receive your payments directly. Instead, we're paid a small monthly fee to manage your account. Your payments are processed by vendors working with the U.S. Department of Education.

Who Handles What

• Payments are sent to Federal Student Aid's (FSA) vendors, not MOHELA.

• Refunds are initiated by MOHELA and processed by the U.S. Treasury.

• Interest rates are set by Congress.

• Repayment plans are determined by Congress or FSA.

Payment Flow: Mailed Payments and Payment Refunds

Payments

1. You mail your payment to FSA Vendor who manages the P.O. Box

2. FSA Vendor who manages the P.O. Box sends a data file to MOHELA

3. MOHELA posts the payment to your account based on the data in the file

Refunds

1. You request or MOHELA initiates, which sends the request to the U.S Treasury

2. U.S. Treasury processes the refund request

3. U.S. Treasury mails the refund to you