Overview
The Division of Training is quickly pausing processing of PSLF purposes & varieties
Lately, the Division of Training introduced that it’s quickly pausing the processing of all Public Service Mortgage Forgiveness (PSLF) varieties because it transitions the servicing of PSLF to studentaid.gov.
From Could by way of July 2024, the next PSLF actions might be paused:
PSLF type processing—Throughout this era, you possibly can nonetheless submit PSLF varieties, however they won’t be processed till after the pause ends.
Cost rely updates—Your cost counts gained’t be up to date throughout the processing pause, however all funds—together with funds made throughout the pause—must be mirrored in your StudentAid.gov account in some unspecified time in the future after the pause ends.
Forgiveness of loans—In the event you attain mortgage forgiveness throughout the processing pause, you possibly can nonetheless submit your final Employment Certification Kind (ECF) to use to have your loans forgiven, however your software is not going to be processed till after the pause ends. Except you request a forbearance whereas your forgiveness software is processed, you’ll nonetheless be required to make funds till your software is reviewed and permitted. Any funds you make past the 120 qualifying funds must be refunded to you or utilized to another excellent federal scholar loans you could have.
PSLF debtors ought to obtain their info from their MOHELA account earlier than April thirtieth
Debtors must be ready for errors to return up throughout the pause and the transition. To be able to dispute any potential errors, you need to obtain all PSLF monitoring and cost rely info at the moment accessible in your on-line account with MOHELA by April thirtieth, earlier than the pause goes into impact.
For extra recommendations on easy methods to save this info, see the video from the Training Debt Client Help Mission (EDCAP) beneath.
Why is the Division pausing PSLF processing?
The momentary PSLF processing pause is a part of the Division’s implementation of the brand new scholar mortgage servicing contracts, typically known as the USDS contracts. For extra info on the USDS contract and the way it will impression debtors, see the Division’s web site explaining this course of and browse our earlier weblog submit on these servicing adjustments.
One of many many adjustments below these new USDS contracts is that the Division is shifting away from having MOHELA service all PSLF accounts, and is separating the dealing with of the PSLF program from different elements of servicing a mortgage. That implies that sooner or later, a borrower might have their loans serviced by one other servicer, reminiscent of Nelnet, and will make their funds to Nelnet, even whereas a separate entity processes the borrower’s PSLF varieties and tracks their PSLF qualifying funds.
Though the Division’s announcement states that it’s transitioning the PSLF program from MOHELA to the Division of Training by way of studentaid.gov, the Division is not going to truly be straight servicing debtors’ PSLF accounts after the transition is made. As a substitute, the Division will depend on its non-public contractors (known as “BPO contractors” or BPOs), to deal with many of the PSLF servicing obligations. The BPOs will work below the FSA model, that means that they may establish themselves as FSA, and never non-public contractors. The BPOs will course of PSLF employment paperwork, make qualifying cost and forgiveness determinations, and replace the debtors’ studentaid.gov accounts.
Although the PSLF program might be dealt with by the BPO contractors after the transition, it isn’t fully clear how this can impression different elements of mortgage servicing. The mortgage servicers, together with MOHELA, will nonetheless be accountable for sending payments and gathering funds for debtors who’re pursuing PSLF aid. We are going to replace this weblog as we get extra info from the Division on the roles and obligations of the mortgage servicers after the transition to studentaid.gov and the BPOs.
Is my account nonetheless with MOHELA throughout the pause?
If you’re pursuing PSLF and your loans are already being serviced by MOHELA, your mortgage will nonetheless be serviced by MOHELA throughout the pause. MOHELA will proceed to carry out common servicing duties reminiscent of sending debtors billing statements, gathering funds, making use of forbearances to debtors’ accounts, and reporting mortgage info to the Division of Training.
MOHELA may also nonetheless be accessible to reply primary PSLF account questions and refer debtors to PSLF sources. Debtors will nonetheless be capable of log into their MOHELA account and studentaid.gov to entry their mortgage info. Nonetheless, as a result of errors could happen throughout the processing pause and transition to the BPOs, PSLF debtors ought to save their information from their on-line MOHELA accounts earlier than April thirtieth in case these disappear throughout the pause or transition.
Is MOHELA nonetheless going to service my loans after the transition to the brand new BPOs?
Possibly. Proper now, MOHELA is the one mortgage servicer that providers scholar mortgage accounts for debtors who’ve submitted PSLF Employment Certification Types. Nonetheless, below the brand new USDS contract, all mortgage servicers will be capable of service PSLF accounts. MOHELA will not be the one PSLF mortgage servicer. In some unspecified time in the future sooner or later, the Division could switch some accounts from MOHELA to different mortgage servicers. Ensure your contact info is updated together with your mortgage servicer and the Division of Training on studentaid.gov, so that you don’t miss any notices about your loans being transferred.
Do I nonetheless should make funds on my loans throughout the processing pause?
Sure! The momentary pause on PSLF processing is just not a cost pause. Debtors are nonetheless required to make well timed month-to-month funds to MOHELA.
Ought to I nonetheless submit my PSLF Employment Certification Kind (ECF) throughout the processing pause?
It relies upon. If you’ll attain 120 qualifying PSLF funds throughout the pause and must submit your ECF to use for forgiveness, you possibly can nonetheless achieve this, however it’s best to take action utilizing the Division’s on-line PSLF Assist Software. Bear in mind that your software for forgiveness is not going to be processed till after the pause ends, and it could take a number of months for the overview to be accomplished.
If you’re not near forgiveness but, it could be finest to attend to submit your ECF till the pause is over to submit your type. However for those who do submit the ECF throughout the pause, it’s best to take action utilizing the net PSLF Assist Software to cut back the danger of your paperwork getting misplaced within the transition.
What ought to PSLF debtors count on after the pause ends?
We anticipate substantial PSLF processing delays after the pause ends. Debtors must be ready for important delays in processing Employment Certification Types (ECF), updating PSLF cost counts, and processing mortgage forgiveness purposes for eligible debtors.
Moreover, it is rather possible that some debtors’ account info, together with qualifying cost counts, could also be inaccurately reported on studentaid.gov or is probably not reported in any respect for a while after the processing pause. Due to this fact, as talked about above, we strongly advise debtors to obtain all PSLF cost rely and monitoring info from MOHELA by April thirtieth, as that info is probably not accessible or accessible on MOHELA’s web site throughout and after the processing pause.
Having a difficulty with MOHELA throughout the PSLF processing pause?
If in case you have issues together with your mortgage servicer that you could’t resolve, file a criticism with the FSA Ombudsman. It’s also possible to share your story with NCLC to assist us make the scholar mortgage system higher for debtors.
