WASHINGTON, DC – APRIL 10: U.S. Secretary of Education Miguel Cardona (R) testifies … [+]
The Department of Education will stop processing all student loan forgiveness for a critical cohort of borrowers starting next week. The temporary pause is an element of a broader effort to transition the general public service lending program to a brand new servicing platform.
PSLF can eliminate federal student loan debt for borrowers in as little as 10 years in the event that they work for certain qualified nonprofit or government organizations. The program requires 120 qualifying payments, each of which must meet certain requirements. To obtain a PSLF loan, borrowers must submit employment certification forms. Previously, these forms were processed by MOHELA, the department’s contracted PSLF service provider. But as a part of a long-planned transition, the department will move PSLF care from MOHELA to the StudentAid.gov platform.
Beginning May 1, all PSLF processing will temporarily stop because the department begins implementing the transition to StudentAid.gov. This may have a major impact on borrowers searching for loan forgiveness under this system. Here’s what that you must know:
All PSLF processing will stop through the student loan forgiveness pause starting May 1
The PSLF processing pause begins May 1 and is anticipated to last through July. During this time, the Department of Education won’t process PSLF employment certifications, approve PSLF student loan forgiveness, or update PSLF qualifying payment numbers. Additionally, borrowers won’t give you the option to receive answers to questions on their PSLF progress through the transition.
Borrowers can even lose all access to their PSLF data. This includes PSLF tracking information accessible through their online MOHELA account, corresponding to: B. Qualified PSLF payment figures and approved periods of employment. Once the transition to StudentAid.gov is complete in July, borrowers will regain access to their PSLF data through this platform.
Student loan forgiveness applications for PSLF won’t be considered through the pause
Borrowers can proceed to submit PSLF employment certification forms through the pause, which can ultimately allow them to update their PSLF payment counts and, if applicable, receive student loan forgiveness. However, no forms might be reviewed through the transition period.
“As of May 1, 2024, you may continue to submit your PSLF forms, but they will be put on hold and not processed until July,” the Department of Education said in a press release Information website take care of the suspension.
“If you achieve credit forgiveness during the processing pause, you can still submit your final Employment Certification Form (ECF) to apply for credit forgiveness, but your application will not be processed until after the pause ends,” the National Consumer Law Center says in a brand new one blog entry Discussion concerning the PSLF break.
Loan forgiveness delays are expected once PSLF processing resumes in July
The PSLF processing pause is currently scheduled to finish in July. At this time, student loan processing under this system should resume. But the Biden administration and advocacy groups are warning borrowers to expect delays resulting from expected backlogs.
“Your qualified payment counts will be updated after the transition is complete in July. At this time, you will be able to access a new PSLF dashboard on StudentAid.gov. There may also be delays and further updates to your eligible and qualifying payment numbers,” the department said. The department warns borrowers to not file a PSLF form a second time after the pause ends in the event that they filed it through the suspension period because doing so “could result in delays in your filing.”
“We anticipate significant delays in PSLF processing once the pause ends,” NCLC said. Borrowers should expect “significant” delays in processing student loan forgiveness applications and updating PSLF-qualified payment numbers.
Download PSLF records before May 1 to avoid disruptions to student loan forgiveness
Because borrowers will lose access to their student loan forgiveness records related to the PSLF program, including qualified payment figures and other information, each the Department of Education and advocates are urging borrowers to download and save their PSLF tracking information , which they’ll currently access through their online MOHELA account.
“If you would like to save screenshots and correspondence for your personal records, we encourage you to access the portal by April 30, 2024,” the department said.
NCLC warned that not only would borrowers lose access to their PSLF records, but they might also face PSLF tracking errors once the transition to StudentAid.gov is complete. This could jeopardize eligibility for student loan forgiveness under this system or delay approvals, particularly because the Department of Education concurrently works to finish the related IDR account adjustment initiative.
“We strongly encourage borrowers to download all PSLF payment counting and tracking information from MOHELA by April 30,” the group said in its blog post, as borrowers will lose access to this data and should not receive it back in July.
Your servicer may change in consequence of the PSLF transition
MOHELA has been the designated loan servicer for the PSLF program since acquiring FedLoan Servicing. But with the upcoming transition to StudentAid.gov, borrowers with any servicer will give you the option to use for student loan forgiveness under the PSLF program without necessarily needing MOHELA as a servicer. “Under the new USDS contract, all loan servicers will be able to service PSLF accounts,” NCLC said. “MOHELA will no longer be the sole PSLF loan servicer.”
Borrowers currently working at MOHELA may experience a service change resulting from the transition. And even those that remain with MOHELA will see changes of their loan servicing experience because the agency undergoes its own transition to a distinct platform.
“If MOHELA is your loan servicer, your account could be transferred to their new servicing platform or another servicer after May 1,” the department warned.
“At some point in the future, the department may transfer some accounts from MOHELA to other loan servicers,” NCLC said. “Make sure your contact information for your loan servicer and the Department of Education is current on StudentAid.gov so you don’t miss any loan transfer notifications.”
Continue making student loan payments through the PSLF processing pause
While student loan forgiveness processing under the PSLF program is paused, borrowers should proceed to make payments as required.
“There are still payments due during this pause, so continue making payments to your loan servicer,” the Department of Education said.
“The temporary pause in PSLF processing is not a payment pause,” NCLC warned. “Borrowers remain required to make on-time monthly payments to MOHELA.” This includes borrowers who expect to satisfy the 120-payment threshold for student loan forgiveness under the PSLF program. “Unless you submit a forbearance request while your forgiveness application is being processed, you will be required to continue making payments until your application is reviewed and approved,” the group said.
