Teachers’ union sues major US federal student loan servicer, alleging ‘abuses’

Students protest in support of debt cancellation outside the supreme court in Washington DC on 30 June 2023. Photograph: Allison Bailey/NurPhoto/Shutterstock

The American Federation of Teachers, one of the largest teachers’ unions in the US, is suing a major federal student loan servicer, alleging it “misleads and misinforms borrowers”.

The lawsuit alleges the Higher Education Loan Authority of the State of Missouri (Mohela) committed a series of abuses including deflecting calls from borrowers and illegally deducting payments from borrowers’ bank accounts without their consent.