Overview
The Department of Education is temporarily pausing processing of PSLF applications & forms
Recently, the Department of Education announced that it is temporarily pausing the processing of all Public Service Loan Forgiveness (PSLF) forms as it transitions the servicing of PSLF to studentaid.gov.
From May through July 2024, the following PSLF activities will be paused:
- PSLF form processing—During this period, you can still submit PSLF forms, but they will not be processed until after the pause ends.
- Payment count updates—Your payment counts won’t be updated during the processing pause, but all payments—including payments made during the pause—should be reflected on your StudentAid.gov account at some point after the pause ends.
- Forgiveness of loans—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. 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. Any payments you make beyond the 120 qualifying payments should be refunded to you or applied to any other outstanding federal student loans you may have.
PSLF borrowers should download their information from their MOHELA account before April 30th
Borrowers should be prepared for errors to come up during the pause and the transition. To be ready to dispute any potential errors, you should download all PSLF tracking and payment count information currently available on your online account with MOHELA by April 30th, before the pause goes into effect.
For more tips on how to save this information, see the video from the Education Debt Consumer Assistance Project (EDCAP) below.
Why is the Department pausing PSLF processing?
The temporary PSLF processing pause is part of the Department’s implementation of the new student loan servicing contracts, often called the USDS contracts. For more information on the USDS contract and how it will impact borrowers, see the Department’s website explaining this process and read our previous blog post on these servicing changes.
One of the many changes under these new USDS contracts is that the Department is moving away from having MOHELA service all PSLF accounts, and is separating the handling of the PSLF program from other aspects of servicing a loan. That means that in the future, a borrower could have their loans serviced by another servicer, such as Nelnet, and could make their payments to Nelnet, even while a separate entity processes the borrower’s PSLF forms and tracks their PSLF qualifying payments.
Although the Department’s announcement states that it is transitioning the PSLF program from MOHELA to the Department of Education via studentaid.gov, the Department will not actually be directly servicing borrowers’ PSLF accounts after the transition is made. Instead, the Department will rely on its private contractors (called “BPO contractors” or BPOs), to handle most of the PSLF servicing responsibilities. The BPOs will work under the FSA brand, meaning that they will identify themselves as FSA, and not private contractors. The BPOs will process PSLF employment paperwork, make qualifying payment and forgiveness determinations, and update the borrowers’ studentaid.gov accounts.
Though the PSLF program will be handled by the BPO contractors after the transition, it is not entirely clear how this will impact other aspects of loan servicing. The loan servicers, including MOHELA, will still be responsible for sending bills and collecting payments for borrowers who are pursuing PSLF relief. We will update this blog as we get more information from the Department on the roles and responsibilities of the loan servicers after the transition to studentaid.gov and the BPOs.
Is my account still with MOHELA during the pause?
If you are pursuing PSLF and your loans are already being serviced by MOHELA, your loan will still be serviced by MOHELA during the pause. MOHELA will continue to perform regular servicing tasks such as sending borrowers billing statements, collecting payments, applying forbearances to borrowers’ accounts, and reporting loan information to the Department of Education.
MOHELA will also still be available to answer basic PSLF account questions and refer borrowers to PSLF resources. Borrowers will still be able to log into their MOHELA account and studentaid.gov to access their loan information. However, because errors may occur during the processing pause and transition to the BPOs, PSLF borrowers should save their records from their online MOHELA accounts before April 30th in case these disappear during the pause or transition.
Is MOHELA still going to service my loans after the transition to the new BPOs?
Maybe. Right now, MOHELA is the only loan servicer that services student loan accounts for borrowers who have submitted PSLF Employment Certification Forms. However, under the new USDS contract, all loan servicers will be able to service PSLF accounts. MOHELA will no longer be the only PSLF loan servicer. At some point in the future, the Department may transfer some accounts from MOHELA to other loan servicers. 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.
Do I still have to make payments on my loans during the processing pause?
Yes! The temporary pause on PSLF processing is not a payment pause. Borrowers are still required to make timely monthly payments to MOHELA.
Should I still submit my PSLF Employment Certification Form (ECF) during the processing pause?
It depends. If you will reach 120 qualifying PSLF payments during the pause and need to submit your ECF to apply for forgiveness, you can still do so, but it is best to do so using the Department’s online PSLF Help Tool. Be aware that your application for forgiveness will not be processed until after the pause ends, and it may take several months for the review to be completed.
If you are not close to forgiveness yet, it may be best to wait to submit your ECF until the pause is over to submit your form. But if you do submit the ECF during the pause, it is best to do so using the online PSLF Help Tool to reduce the risk of your paperwork getting lost in the transition.
What should PSLF borrowers expect after the pause ends?
We anticipate substantial PSLF processing delays after the pause ends. Borrowers should be prepared for significant delays in processing Employment Certification Forms (ECF), updating PSLF payment counts, and processing loan forgiveness applications for eligible borrowers.
Additionally, it is very likely that some borrowers’ account information, including qualifying payment counts, may be inaccurately reported on studentaid.gov or may not be reported at all for some time after the processing pause. Therefore, as mentioned above, we strongly advise borrowers to download all PSLF payment count and tracking information from MOHELA by April 30th, as that information may not be available or accessible on MOHELA’s website during and after the processing pause.
Having an issue with MOHELA during the PSLF processing pause?
If you have problems with your loan servicer that you can’t resolve, file a complaint with the FSA Ombudsman. You can also share your story with NCLC to help us make the student loan system better for borrowers.
