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The Education Department will cease all student loan forgiveness processing for a significant group of borrowers starting next week.

Student Loan Forgiveness Processing to Stop for Some Borrowers

Starting May 1, all Public Service Loan Forgiveness (PSLF) processing will be temporarily paused as the department transitions to StudentAid.gov. This will have significant repercussions for individuals obtaining student loan forgiveness through the program.

According to Forbes, the PSLF processing stoppage begins May and is likely to run until July. During that time, the Education Department will not process PSLF employment certifications, approve student loan forgiveness under PSLF, or update PSLF qualifying payment numbers.

Furthermore, student loan borrowers will be unable to obtain answers to any questions concerning their PSLF progress throughout the changeover period.

Borrowers who work for certain qualifying nonprofit or government organizations might have their federal student loan debt forgiven in as little as ten years under PSLF.

The program requires 120 qualifying payments, each of which must meet specific criteria. Borrowers who apply for PSLF financing must submit employment certification paperwork.

Until now, these papers had been completed by MOHELA, the department's contractual PSLF servicer. However, as part of a long-planned shift, the government will transfer PSLF services from MOHELA to the StudentAid.gov platform.

Borrowers will also lose full access to their PSLF data. This includes PSLF monitoring information that is available through their online MOHELA account, such as qualifying PSLF payment counts and allowed employment durations.

PSLF data will be accessible on StudentAid.gov after the transition is completed in July. Borrowers can still submit PSLF employment certification forms during the delay, allowing them to update their PSLF payment counts and, if eligible, earn student loan forgiveness. However, no forms will be examined during the transition period.

Student Loan Borrowers to Receive Boost Towards Forgiveness

Meanwhile over 3.6 million borrowers in the William D. Ford Federal Direct Loan (Direct Loan) Program will receive a considerable boost toward loan forgiveness, with many having their loans forgiven instantly.

This modification, which is presently ongoing and will continue until summer 2024, is projected to be finished by July 1, 2024. It will be applied automatically to all Direct Loans and Federal Family Education Loan (FFEL) Program loans controlled by the Department of Education at the time.

This modification is available to borrowers on an income-driven repayment (IDR) plan, those in the Public Service Loan Forgiveness (PSLF) program, and those with ED Direct or FFEL Program loans.

According to Marca, certain payments or months that were not previously credited for loan forgiveness will now be counted.

Eligible borrowers will be nearing the conclusion of their repayment tenure and closer to forgiveness. Some borrowers will automatically have their loans forgiven. Borrowers who have made more than the requisite number of payments may be eligible for a refund.

ED will review every borrower account that has at least one Direct Loan or FFEL Program loan. Eligible borrowers' payment counts will be updated automatically.

The payment count modification will count time toward IDR forgiveness, including all months in repayment status, regardless of payment type, loan type, or repayment plan, as well as 12 or more months of consecutive forbearance or 36 months of cumulative forbearance.

Tags

Student loan forgiveness, Student loan cancellation, Student loan debt