The Education Department will stop all student loan forgiveness processing for a critical cohort of borrowers starting next week. The temporary pause is part of a broader effort to transition the Public Service Loan Forgiveness program to a new servicing platform.
PSLF can wipe out the federal student loan debt for borrowers in as little as 10 years if they work for certain qualifying nonprofit or government organizations. The program requires 120 qualifying payments, each of which must meet certain requirements. To get PSLF credit, borrowers must submit employment certification forms. Up until now, these forms have been processed by MOHELA, the department’s contracted PSLF servicer. But as part of a long-planned transition, the department will be moving PSLF servicing from MOHELA to the StudentAid.gov platform.
Starting on May 1st, all PSLF processing will be temporarily halted as the department begins to implement the shift to StudentAid.gov. This will have major implications for borrowers pursuing loan forgiveness under the program. Here’s what you need to know.
All PSLF Processing Will Be Halted During Student Loan Forgiveness Pause Starting May 1
The PSLF processing pause begins on May 1st and is expected to last through July. During that time, the Education Department will not process any PSLF employment certifications, will not approve any student loan forgiveness under PSLF, and will not update PSLF qualifying payment counts. In addition, borrowers will not be able to get any questions about their PSLF progress answered during the transition.
Borrowers will also lose all access to their PSLF data. This includes PSLF tracking information accessible through their online MOHELA account such as qualifying PSLF payment counts and approved employment periods. Once the transition to StudentAid.gov is completed in July, borrowers will regain access to their PSLF data through that platform.
Student Loan Forgiveness Applications For PSLF Will Not Be Reviewed During The Pause
Borrowers can still submit PSLF employment certification forms during the pause, which will eventually allow them to update their PSLF payment counts and — if applicable — receive student loan forgiveness. But no forms will be reviewed during the transition period.
“Starting May 1, 2024, you can continue to submit your PSLF forms, but they will be put on hold and not processed until July,” said the Education Department on an informational website addressing the suspension.
“If you reach loan forgiveness during the processing pause, you can still submit your last Employment Certification Form (ECF) to apply to have your loans forgiven, but your application will not be processed until after the pause ends,” said the National Consumer Law Center in a new blog post discussing the PSLF pause.
Loan Forgiveness Delays Expected Once PSLF Processing Resumes In July
The PSLF processing pause is currently set to end in July, at which point student loan forgiveness processing should resume under the program. But the Biden administration and advocacy groups are warning borrowers to expect delays due to anticipated backlogs.
“Your qualifying payment counts will be updated after the transition is complete in July. At that time, you will be able to access a new PSLF dashboard on StudentAid.gov. You might also see delays and further updates to your eligible and qualifying payment counts,” said the department. The department warns borrowers not to resubmit a PSLF form a second time after the pause ends if they submitted one during the suspension period, as doing so “could cause delays with your submission.”
“We anticipate substantial PSLF processing delays after the pause ends,” said NCLC. Borrowers should expect “significant” delays in processing student loan forgiveness applications and updating PSLF qualifying payment counts.
Download PSLF Records Before May 1st To Mitigate Student Loan Forgiveness Disruptions
Because borrowers will lose access to their student loan forgiveness records associated with the PSLF program, including qualifying payment counts and other information, both the Education Department and advocates are urging borrowers to download and save their PSLF tracking information currently accessible via their online MOHELA account.
“If you want to save screenshots and correspondence for your personal records, we recommend accessing the portal by April 30, 2024,” said the department.
NCLC warned that borrowers not only will lose access to their PSLF records, but that they anticipate errors in PSLF tracking once the transition to StudentAid.gov is complete. This could jeopardize eligibility for student loan forgiveness under the program, or delay approvals, particularly as the Education Department simultaneously works to complete the related IDR Account Adjustment initiative.
“We strongly advise borrowers to download all PSLF payment count and tracking information from MOHELA by April 30th,” said the group in its blog post, as borrowers will lose access to this data and may not get it back in July.
Your Servicer Could Change As A Result Of PSLF Transition
MOHELA has been the designated loan servicer for the PSLF program since it took over from FedLoan Servicing. But with the upcoming transition to StudentAid.gov, borrowers with any servicer will be able to get on track for student loan forgiveness under the PSLF program without necessarily needing MOHELA to be their servicer. “Under the new USDS contract, all loan servicers will be able to service PSLF accounts,” said NCLC. “MOHELA will no longer be the only PSLF loan servicer.”
Borrowers currently with MOHELA could experience a servicing change as a result of the transition. And even those who remain with MOHELA will see changes to their loan servicing experience as the agency goes through its own transition to a different platform.
“If MOHELA is your loan servicer, your account might be transferred to their new servicing platform or another servicer after May 1,” warned the department.
“At some point in the future, the Department may transfer some accounts from MOHELA to other loan servicers,” said NCLC. “Make sure your contact information is up to date with your loan servicer and the Department of Education on StudentAid.gov, so you don’t miss any notices about your loans being transferred.”
Keep Making Student Loan Payments During PSLF Processing Pause
While student loan forgiveness processing under the PSLF program will be suspended, borrowers should continue to make their payments as required.
“Payments are still due during this pause, so continue to make payments to your loan servicer,” said the Education Department.
“The temporary pause on PSLF processing is not a payment pause,” warned NCLC. “Borrowers are still required to make timely monthly payments to MOHELA.” This includes borrowers who anticipate reaching the 120-payment threshold for student loan forgiveness under the PSLF program. “Unless you request a forbearance while your forgiveness application is processed, you will still be required to make payments until your application is reviewed and approved,” said the group.
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