The Public Service Loan Forgiveness program, established by President George W. Bush in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of on-time payments. However, the program has faced numerous challenges over the years, with many borrowers facing difficulties in qualifying for loan forgiveness due to confusing technical reasons and errors on the part of lenders. The Biden administration has taken steps to reform the program in order to address these issues and improve the overall experience for borrowers.
One of the major changes being implemented as part of the program overhaul is the centralization of loan servicing and customer service for PSLF borrowers on StudentAid.gov. Previously, loan servicing was handled by a single company, either FedLoan or Mohela. Going forward, a number of different companies will service the accounts, in addition to the Education Department itself. This change is aimed at providing borrowers with real-time and more accurate information on payment counts and form processing.
Temporary Suspension of Loan Forgiveness
As part of the transition to the new loan servicing system, the Education Department has announced a temporary suspension of PSLF form submissions and loan forgiveness processing. This partial pause, which began on May 1 and is expected to last through July, means that borrowers will not be able to see their PSLF payment counts on MOHELA’s website during this period. However, borrowers are still encouraged to continue making their loan payments, as these months will still count towards the 10-year requirement for loan forgiveness.
During this transition period, borrowers who qualify for debt cancellation can request a forbearance from their servicer if needed. Any overpayments made during this time will be refunded, and borrowers will still be able to submit forms to certify public service employment and apply for loan forgiveness once the transition is complete. It is important for borrowers to stay informed about these changes and to reach out to their servicer or the Education Department if they have any questions or concerns.
Overall, the changes being made to the Public Service Loan Forgiveness program are intended to streamline the loan forgiveness process and provide better support for borrowers. While the temporary suspension may cause some inconvenience, the long-term benefits of these improvements should ultimately make it easier for eligible borrowers to receive the debt relief they deserve.