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A key student-loan forgiveness program will soon be paused. Here's what you need to know.

Ayelet Sheffey   

A key student-loan forgiveness program will soon be paused. Here's what you need to know.
  • Processing of Public Service Loan Forgiveness applications will be paused beginning in May.
  • It's a result of the Education Department transitioning PSLF accounts away from servicer MOHELA.

Millions of student-loan borrowers will soon be impacted by a series of changes to a major student-loan forgiveness program.

The Education Department recently posted new guidance surrounding upcoming reforms to the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.

Student-loan company MOHELA currently manages the entire PSLF portfolio, but according to the department's guidance, that'll soon change. The task of managing the program will be split up among several different servicers, and the Education Department will manage the overall program through, where borrowers will be able to track their payments and progress toward forgiveness.

Here's what borrowers in PSLF should know.

What will happen to PSLF applications?

Beginning on May 1, the Education Department will be pausing all processing of PSLF applications as the program transitions from MOHELA. While borrowers can still submit their applications during this time, they will be placed on hold until processing resumes in July.

During the processing pause, the department also said borrowers will not be able to access their PSLF history on MOHELA's portal, so it recommends that borrowers "save screenshots and correspondence for your personal records" by April 30.

Which company will manage PSLF?

Instead of MOHELA being the sole servicer of PSLF, several different companies that already help service student loans — including Nelnet and Aidvantage — will work with the Education Department to process borrowers' PSLF applications and payments. However, the Education Department maintains that it will "fully manage" the program.

This change resulted from the Education Department's announcement last year to overhaul student loan servicing and make the system easier for borrowers to access. It awarded five companies contracts to service student loans and emphasized that "vendor accountability is a central goal of the new servicing contracts, which provide rewards for better customer outcomes and impose consequences for failing to meet expectations."

What will PSLF look like after the transition?

A key change borrowers can expect once the transition is complete is the ability to check their PSLF status directly on According to the department, borrowers will be able to access a dashboard that tracks their applications and payments, and it should also result in "a decrease in processing time for PSLF forms," per the guidance.

Despite application processing being paused from May to July, borrowers are still expected to make their payments. Any payments made during that time will count toward eventual forgiveness, and any additional payments will be refunded.

As Business Insider previously reported, these changes come following months of scrutiny over MOHELA's handling of PSLF. Sen. Elizabeth Warren is holding a hearing next week to address MOHELA "impeding public servants' access to PSLF relief," and Warren, along with Senate Majority Leader Chuck Schumer and Sen. Bernie Sanders, called for a federal investigation into the company's practices.

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