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You're not alone if you feel like you have whiplash trying to keep up with the student loan repayment news cycle. It’s nearly impossible to navigate a seemingly ever-changing landscape. That’s why we’ve decided to break down the current headlines to ensure you understand what changes are imminent, what could be on the horizon, and how you’ll be affected.
- PSLF processing is currently paused
If you’re a PSLF hopeful, you’re almost certainly making your student loan payments to MOHELA. MOHELA was the exclusive contracted servicer for PSLF support until May 1st. As of May 1st, PSLF form processing is on pause as the program's service will move to management through studentaid.gov.
What does this mean for you? If you’re currently with MOHELA, your loan will likely remain part of their loan service portfolio. During the transition of PSLF administration, employment certification form processing will be paused. Form processing is expected to resume in July of 2024. During this time, payments will still be due.
- MOHELA student loans may change servicers!
In addition to no longer tracking repayment progress for PSLF, MOHELA will also be downsizing its overall loan portfolio. Currently, we expect the transfer of ~12% of accounts to a new loan servicer. Don’t be surprised or alarmed if this happens to you or one of your staff. Transferring servicer platforms can be stressful, so to mitigate our team recommends downloading your repayment history with MOHELA, keeping an extra close eye on your email, and logging into your account more frequently to check for updates.
- The Biden Administration has a new plan—but it’s not approved yet
The Biden Administration announced a new plan for student loan repayment reform. This plan includes debt cancellation for borrowers experiencing hardships, those who enrolled in low-financial-value programs, and for those who entered repayment over 20 years ago. Please be advised these proposals are not yet approved and we recommend not making any repayment decisions until there are final updates.
A few other student loan updates:
- Total forgiveness under PSLF reached $1.8 Billion
- Nearly 20,000 borrowers have received forgiveness under the Public Service Loan Forgiveness Program
- The Temporary Expanded Public Service Loan Forgiveness Program (which is a different program from traditional PSLF) remains well funded as of the most recent report published by the Department of Education (June 2023).
