“Intentionally spreading false and misleading claims about MOHELA’s work on behalf of Federal Student Aid does nothing to improve the experience for students and borrowers,” the company said in a statement Thursday. It said the company “suffered serious damage” from the allegations, and said the advocacy group did not “afford it the opportunity to explain the true facts and correct SBPC’s many mistakes.”

Student Borrower Protection Center and the American Federation of Teachers, which co-wrote the paper but is not named in the cease and desist letter, say they refuse to retract the report. They argue MOHELA’s 14-page letter does nothing more than confirm its improper practices. In response, the organizations on Thursday petitioned the Education Department’s Office of the Inspector General to audit the company.

“MOHELA appears to be even worse at damage control than it is at servicing student loans,” said Mike Pierce, executive director of the Student Borrower Protection Center. “Not only did MOHELA fail to offer credible evidence that we have our facts wrong, the company appears to have confessed in greater detail to many of the very abuses we allege in our report.”

The scrutiny has caught the attention of lawmakers. In the wake of the report, Sen. Elizabeth Warren (D-Mass.) invited the head of MOHELA, Scott Giles, to appear before the Senate Banking Committee on April 10. Neither Warren’s office nor MOHELA would confirm whether Giles has accepted the invitation.

In its cease-and-desist letter, MOHELA challenges the characterization of its efforts to push customers seeking the help of a call center rep to instead use self-service options. Advocates, according to the company, paint the “call deflection” practice as a nefarious internal scheme to deny borrowers help.

But the student loan servicer says the Education Department’s Federal Student Aid office directed all student loan servicers, not just MOHELA, to employ the practice in anticipation of a surge in call volume coming out of the payment pause.

A copy of the department’s July 2023 Communications Playbook that loan servicers shared with Congress last summer confirms MOHELA’s account. In the guidebook, the department said, “FSA will be providing messaging to servicers to help with coordinated call deflection efforts to promote self-service.”

At the time, the department had enacted a slew of customer service cuts — such as reducing its loan servicers’ call center hours — after Congress refused to increase the budget for the student aid office. MOHELA told senators in August that funding constraints from the aid office could affect call wait times and staffing levels, although the company had ramped up the number of customer service reps.

Pierce argues MOHELA is blaming the Education Department for its inability to adequately respond to borrowers while taking no responsibility for its role in developing and maintaining tactics that failed to meet borrowers’ needs. An audit would shed light on whether the company was driving decisions or in the passenger seat as the department ushered borrowers back into repayment, said American Federation of Teachers President Randi Weingarten.

“We’ll get to the bottom of it,” Weingarten said. “But the fact that [MOHELA] would have the audacity to blame someone else instead of doing their work is outrageous. This kind of corporate bullying should have no place in America.”

Another major allegation in the report claims MOHELA is responsible for a backlog of 800,000 unprocessed applications for the federal government’s Public Service Loan Forgiveness program. While the volume of applications fluctuates, the company said it has less than 15,000 new forms to process.

The company stressed that it does not have the authority to process loan forgiveness until authorization is provided by the Education Department, which it has said is routinely delayed in sending the necessary files to complete loan discharges. MOHELA is facing a class-action lawsuit from borrowers who allege the company repeatedly failed to process their PSLF applications.

“Teachers, nurses, and millions of other borrowers across the country know from firsthand lived experience that they have suffered because of MOHELA’s acts,” Weingarten said. “The truth is on our side.”

MOHELA took center stage in the legal fight that toppled President Biden’s plan to forgive up to $20,000 in federal student debt for 40 million Americans. Missouri, one of six states that sued to block the program, claimed the relief threatened the revenue of state entities that profit from federal student loans, including MOHELA. The quasi-state entity was never named in the lawsuit and said it played no role in the case.