The Department of Education is temporarily pausing student loan forgiveness for public sector workers such as teachers and nurses as they move management of the program in-house. The transition will impact about 2 million borrowers enrolled in the Public Service Loan Forgiveness program and is expected to last through July. This change is part of a larger overhaul of the federal student loan system to streamline processing and improve customer service.
The transition will also apply to the TEACH Grant program, which provides money to students planning to teach in low-income districts. The grants, which are converted to loans if requirements are not met, are also serviced by MOHELA. This larger overhaul of the federal student loan system will happen in phases over the next few years, aiming to make the system more efficient.
The PSLF program has had administrative problems in the past, with many borrowers being steered into forbearance by their servicer instead of making qualifying payments. The Biden administration has made it easier to qualify for the program, canceling $62.8 billion for nearly 876,000 borrowers to date. After the transition, borrowers will need to submit their PSLF forms through StudentAid.gov and will be able to track their payment progress on the website.
Borrowers will still be required to make monthly payments as usual, but forms to certify employment or apply for forgiveness will not be reviewed until the transition is complete. Once borrowers make their 120th qualifying payment, they can apply for debt relief. Borrowers impacted by the pause can request a forbearance from their servicer, during which they will not have to make additional payments.
Once the transition is complete, StudentAid.gov will provide real-time, accurate information on payment counts and processing for PSLF borrowers. Processing times will be faster and borrowers will be able to contact the Department of Education’s contact center directly for any questions about the program. For TEACH Grant recipients, forms documenting qualifying teaching service will not be processed during the transition, which will last into fall 2024. During the pause, the form can be submitted by mail or online in the fall.
