Savanna Hoffman
The Missouri Higher Education Loan Authority (MOHELA) is one of the leading student loan servicers in the United States. MOHELA borrowers are encouraged to stay informed about their loans and seek assistance if they encounter difficulties. While some loan places allow payments via credit card, it is generally not advisable, and in some cases, it may be illegal to pay off old debt with new debt. This paragraph introduces the topic of MOHELA student loans and discusses the relevant issue of payment methods, specifically addressing the question of whether MOHELA student loans can be paid with a credit card.
| Characteristics | Values |
|---|---|
| Can you pay Mohela student loans with a credit card? | No |
| Why? | It is not advisable and in some cases illegal to pay old debt with new debt. |
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What You'll Learn
Income-driven repayment (IDR) plans for federal loan borrowers
As of March 27, 2025, federal student loan borrowers can once again apply for income-driven repayment (IDR) plans. IDR plans allow borrowers to make monthly payments based on their income, providing a more affordable repayment option for low-income borrowers.
There are three IDR plans available: income-based repayment (IBR), Pay As You Earn, and income-contingent repayment (ICR). Each plan has slightly different criteria for eligibility and calculations for monthly payments.
Under IBR, your discretionary income is defined as the amount you earn over 150% of the federal poverty guideline for your location and household size. For a single person in the contiguous US, this threshold is $35,213 in 2025. Using this threshold, a borrower earning $75,000 per year would be expected to pay approximately $185 per month on IBR. Importantly, the amount paid on IBR will never exceed the amount that would be paid on a standard plan. Direct subsidized, unsubsidized, and consolidated loans are eligible for the IBR plan.
On the other hand, ICR calculates your monthly payment as 20% of your discretionary income, which is defined as any income above 100% of the poverty guideline. Alternatively, it can be calculated using the amount you would pay on a 12-year fixed repayment plan, and the lower of the two amounts is what you pay. Direct subsidized, unsubsidized, and consolidated loans are also eligible for the ICR plan.
The Pay As You Earn repayment plan shares eligibility criteria with the ICR plan, catering to borrowers with the same kinds of direct loans.
To apply for any of the IDR plans available to you, log in to the Federal Student Aid website or visit your loan servicer's website. The best repayment plan depends on your specific situation and eligibility.
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PSLF eligibility for public service workers
As of January 2023, Google search results suggest that Mohela does not directly accept credit card payments for student loans. However, some workarounds or alternative options may allow you to use a credit card indirectly to make payments. It is important to carefully consider the potential fees, interest rates, and terms associated with any approach you may come across. One option is to use a money transfer credit card to deposit funds into your bank account and then use those funds to pay your Mohela student loan. Some money transfer cards offer an introductory 0% APR period, which could provide a temporary buffer against interest charges, but it is crucial to have a plan to pay off the balance before the introductory period ends to avoid accumulating debt.
Now, here is the content on 'PSLF eligibility for public service workers':
The Public Service Loan Forgiveness (PSLF) program offers a path for public service workers to have their remaining federal student loan balance forgiven after committing to long-term employment in eligible public service jobs. To ensure that borrowers are on the right track, it is important to understand the eligibility requirements and take the necessary steps to qualify for PSLF. First and foremost, only federal student loans are eligible for PSLF. If you have private student loans, they will not qualify for this particular forgiveness program. However, there may be other assistance or repayment programs tailored for private loans, so it is worth exploring those options separately.
For PSLF, your employment must be full-time at a government organization, a 501(c)(3) non-profit organization, or another type of non-profit organization that provides a qualifying public service. Qualifying public services include emergency management, military service, public safety, law enforcement, public health, public education, public library sciences, school-based library and media services, public interest law services, early childhood education, public service for individuals with disabilities, public child or family service, public service to low-income communities, public service to elderly communities, and public service in rural areas.
Additionally, your federal student loans must be under a qualifying repayment plan, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), or the Standard Repayment Plan with a 10-year repayment period. While on one of these plans, you must make 120 qualifying monthly payments, which do not have to be consecutive. These payments should be made while you are employed full-time in a qualifying public service position. To help track your progress and ensure that your payments are qualifying, it is recommended to submit the Employment Certification for Public Service Loan Forgiveness form annually or whenever you change employers.
During the repayment period, it is important to keep your federal student loans in good standing to maintain eligibility for PSLF. This means avoiding loan delinquency or default. If you are having trouble making payments or keeping up with the loan terms, consider applying for an income-driven repayment plan or using deferment or forbearance options, which can provide temporary relief. Finally, after making the required 120 qualifying payments, you can apply for PSLF loan forgiveness. If approved, the remaining balance on your eligible federal student loans will be forgiven, and you will be free from those particular student loan debts.
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Pros and cons of consolidating federal loans
Pros of Consolidating Federal Loans
Consolidating federal loans can simplify the process of managing your student loans, especially if your loans have different loan servicers. This is because consolidation combines multiple loans into one, so you'll have a single loan with just one monthly bill and only one servicer to deal with.
Consolidating your loans can also lower your monthly payment, giving you more time to repay. Additionally, if you have an older student loan with a variable interest rate, consolidation will lock in a fixed interest rate, so your new payment won’t change over time.
Consolidating your FFEL or Perkins Loans will replace these older loan types with a new loan in the Direct Consolidation Loan program. This means you’ll get the benefit of new programs that are rolled out to help student loan borrowers manage their loans, which FFEL and Perkins loans are often excluded from.
Applying for consolidation is easy, free, and can be done through the Federal Student Aid website. Your credit score doesn't matter, and it shouldn't take longer than 30 minutes if you have all your information ready.
Cons of Consolidating Federal Loans
Consolidating your loans may increase the number of years in your payment plan, which means you'll pay more interest over time. Any unpaid interest will also be added to your principal balance, increasing the amount you'll pay in interest.
Consolidating your loans may also cause you to lose certain benefits, such as access to certain Income-Driven Repayment (IDR) plans or loan cancellation. For example, if you consolidate your current Direct Loans with other loans into a new Direct Consolidation Loan, you may no longer be eligible for President Biden’s plan for up to $20,000 in debt relief.
Additionally, if you're seeking Public Service Loan Forgiveness (PSLF), consolidating your loans may not be the best option. If your payment period in the Standard Plan is more than 10 years, then those payments will not count towards PSLF or IDR loan forgiveness.
Finally, consolidating your federal loans into a private consolidation loan will cause you to lose the federal loan’s benefits and protections, and the loan may no longer qualify for the student loan interest tax deduction.
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Private loan refinancing benefits
Refinancing private student loans can be a quick process with several benefits. Here are some advantages to consider:
Lower Interest Rates and Better Terms
Refinancing allows you to secure a lower interest rate, which can result in significant savings over the life of the loan. Lower interest rates mean lower monthly payments, making your loan more affordable. Additionally, you may be able to negotiate better loan terms, such as a longer repayment period, to reduce your financial burden.
Preserve Federal Loan Benefits
If you have both private and federal student loans, refinancing just the private ones is an option. This approach allows you to maintain the benefits associated with your federal loans, such as income-driven repayment plans, forbearance, deferment, and forgiveness programs. By refinancing private loans separately, you can take advantage of the benefits offered by private lenders while retaining the protections of federal loans.
Simple Process and Fast Approval
Refinancing private student loans is a straightforward process. You can compare top lenders and their interest rates online. Many lenders offer pre-qualification with a soft credit check, which does not impact your credit score. This allows you to get an estimate of the interest rate you may qualify for before submitting a full application. The entire process can be done quickly and easily online, providing fast approval and funding.
Switch Lenders
If you are unhappy with your current lender's customer service or want to explore other options, refinancing gives you the flexibility to switch lenders. You can choose a lender that better meets your needs and preferences, ensuring a more positive borrowing experience.
It is important to note that refinancing may not be suitable for everyone. For example, if interest rates are high, it may be advisable to wait until they drop below your current rate. Additionally, refinancing federal loans into private loans may result in the loss of certain federal benefits and protections. Therefore, it is essential to carefully consider your individual circumstances and seek financial advice before making any decisions.
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MOHELA's legal controversies
MOHELA, a “quasi-governmental entity" created in 1981 by the Missouri legislature, has been involved in several legal controversies. One of the most notable controversies is its role in Biden v. Nebraska, where the Supreme Court ruled that the State of Missouri had the legal right to challenge President Biden's debt relief plan due to potential harm to MOHELA. This resulted in the denial of debt relief to 40 million federal student loan borrowers.
In addition, MOHELA has been accused of mismanagement and abuse by the Student Borrower Protection Center (SBPC) and the American Federation of Teachers (AFT). In a “cease and desist” letter sent by MOHELA to the SBPC in March 2024, the company confessed to several improper practices, including failing to send bills to 2.5 million people, resulting in missed payments by 875,000 borrowers. MOHELA also admitted to not having adequate staff to meet customer needs and improperly calculating payment amounts or refunds for a small percentage of borrowers.
MOHELA has also been criticized for allegedly lying to student loan borrowers and forcing them to waive their rights under federal and state consumer laws. In October 2024, the SBPC and AFT sent letters to federal financial regulators warning about these potentially unlawful practices. MOHELA was also accused of updating its website terms of service to prohibit borrowers from sharing information about their accounts and publicizing information provided by MOHELA.
As a result of these controversies, MOHELA has faced investigations by multiple state attorneys general and regulators over alleged mismanagement of borrowers' accounts. MOHELA has argued that it is immune from lawsuits as an arm of the Missouri government. However, Senate Democrats, including Elizabeth Warren, have launched investigations into its work and urged the Department of Education to potentially drop its contract with the company.
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Frequently asked questions
No, you cannot pay off your Mohela student loan with a credit card.
Lenders that accept credit cards usually limit them to debit cards only. It is also not recommended to pay off old debt with new debt, and in some cases, it may be illegal.
Yes, you can pay off your Mohela student loan through other means such as direct bank transfers or cheque.
While it is possible to use a different credit card to pay off your loan, it is not advisable as you will likely incur additional fees and the interest rates may be unfavourable.
Using a credit card to pay off your Mohela student loan may offer rewards or benefits such as accumulating points or miles, which can be redeemed for travel or other perks.
