Overview
The Division of Training is quickly pausing processing of PSLF functions & types
Not too long ago, the Division of Training introduced that it’s quickly pausing the processing of all Public Service Mortgage Forgiveness (PSLF) types because it transitions the servicing of PSLF to studentaid.gov.
From Might via July 2024, the next PSLF actions might be paused:
- PSLF kind processing—Throughout this era, you’ll be able to nonetheless submit PSLF types, however they won’t be processed till after the pause ends.
- Fee depend updates—Your fee counts gained’t be up to date in the course of the processing pause, however all funds—together with funds made in the course of the pause—must be mirrored in your StudentAid.gov account sooner or later after the pause ends.
- Forgiveness of loans—In the event you attain mortgage forgiveness in the course of the processing pause, you’ll be able to 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 accredited. Any funds you make past the 120 qualifying funds must be refunded to you or utilized to every other excellent federal pupil loans you might 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 in the course of the pause and the transition. To be able to dispute any potential errors, you must obtain all PSLF monitoring and fee depend info at present accessible in your on-line account with MOHELA by April thirtieth, earlier than the pause goes into impact.
For extra recommendations on learn how to save this info, see the video from the Training Debt Shopper Help Venture (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 pupil mortgage servicing contracts, usually known as the USDS contracts. For extra info on the USDS contract and the way it will influence debtors, see the Division’s web site explaining this course of and skim our earlier weblog publish on these servicing adjustments.
One of many many adjustments below these new USDS contracts is that the Division is transferring away from having MOHELA service all PSLF accounts, and is separating the dealing with of the PSLF program from different points of servicing a mortgage. That implies that sooner or later, a borrower may have their loans serviced by one other servicer, corresponding to Nelnet, and will make their funds to Nelnet, even whereas a separate entity processes the borrower’s PSLF types 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 through studentaid.gov, the Division is not going to really be instantly servicing debtors’ PSLF accounts after the transition is made. As a substitute, the Division will depend on its personal 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 determine themselves as FSA, and never personal contractors. The BPOs will course of PSLF employment paperwork, make qualifying fee 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 solely clear how this may influence different points of mortgage servicing. The mortgage servicers, together with MOHELA, will nonetheless be chargeable for sending payments and accumulating funds for debtors who’re pursuing PSLF reduction. 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 in the course of the pause?
In case you are pursuing PSLF and your loans are already being serviced by MOHELA, your mortgage will nonetheless be serviced by MOHELA in the course of the pause. MOHELA will proceed to carry out common servicing duties corresponding to sending debtors billing statements, accumulating 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 fundamental PSLF account questions and refer debtors to PSLF assets. Debtors will nonetheless have the ability to log into their MOHELA account and studentaid.gov to entry their mortgage info. Nonetheless, as a result of errors might happen in the course of 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 in the course of the pause or transition.
Is MOHELA nonetheless going to service my loans after the transition to the brand new BPOs?
Perhaps. Proper now, MOHELA is the one mortgage servicer that companies pupil mortgage accounts for debtors who’ve submitted PSLF Employment Certification Types. Nonetheless, below the brand new USDS contract, all mortgage servicers will have the ability to service PSLF accounts. MOHELA will now not be the one PSLF mortgage servicer. Sooner or later sooner or later, the Division might switch some accounts from MOHELA to different mortgage servicers. Ensure your contact info is updated along 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 need to make funds on my loans in the course of the processing pause?
Sure! The momentary pause on PSLF processing shouldn’t be a fee 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) in the course of the processing pause?
It relies upon. If you’ll attain 120 qualifying PSLF funds in the course of the pause and must submit your ECF to use for forgiveness, you’ll be able to nonetheless accomplish that, 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 assessment to be accomplished.
In case you are not near forgiveness but, it could be greatest to attend to submit your ECF till the pause is over to submit your kind. However in the event you do submit the ECF in the course of the pause, it’s best to take action utilizing the web PSLF Assist Software to cut back the chance of your paperwork getting misplaced within the transition.
What ought to PSLF debtors anticipate after the pause ends?
We anticipate substantial PSLF processing delays after the pause ends. Debtors must be ready for vital delays in processing Employment Certification Types (ECF), updating PSLF fee counts, and processing mortgage forgiveness functions for eligible debtors.
Moreover, it is extremely probably that some debtors’ account info, together with qualifying fee counts, could also be inaccurately reported on studentaid.gov or will not be 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 fee depend and monitoring info from MOHELA by April thirtieth, as that info will not be accessible or accessible on MOHELA’s web site throughout and after the processing pause.
Having a problem with MOHELA in the course of the PSLF processing pause?
When you have issues along with your mortgage servicer you could’t resolve, file a criticism with the FSA Ombudsman. You can even share your story with NCLC to assist us make the coed mortgage system higher for debtors.
