PSLF Updates 2024: Everything You Need to Know

Bookmark this page for essential updates for all borrowers navigating the Public Service Loan Forgiveness (PSLF) program. With changes on the horizon, it’s vital to stay informed and prepared. Here’s everything you need to know about the 2024 updates to PSLF.

If you’d prefer, watch my update here:

Starting May 1, 2024, the management of the PSLF program will transition from MOHELA to the Department of Education’s Federal Student Aid Office (FSA). This pivotal change marks a significant step towards improving the program’s administration and efficiency.

But what does this mean for you, the borrower?

Let’s break it down:

Processing Pause and What It Means

One of the immediate impacts of this transition will be a processing pause from May to July 2024. During this period:

• PSLF forms can still be submitted, but processing will resume only after the pause.

• Continue making payments as usual to ensure uninterrupted progress towards loan forgiveness.

• All your PSLF information, including payment counts, will be securely transferred to FSA’s new PSLF database.

Keeping Records Is Key

Given the digital transition, it’s prudent to maintain personal copies of your PSLF forms and payment records. This ensures you have all necessary documentation at your fingertips, should any discrepancies arise during the transfer.

Impact on Loan Servicing

MOHELA will remain your loan servicer, albeit with a new .gov domain and updated branding to reflect its integration with FSA. This change, already underway, aims to streamline communication and enhance service delivery.

Unaffected Deadlines

Importantly, this transition does not affect the IDR account adjustment deadline or the double consolidation deadline. These critical timelines remain as scheduled, ensuring that borrowers can plan accordingly.

Related: PSLF Weighted Average Consolidation Rules

To navigate this transition smoothly, consider the following actionable steps:

Continue Payments: Keep up with your scheduled payments to MOHELA during the transition to avoid any disruptions in your progress toward forgiveness.

Document Everything: Save copies of your payment records and PSLF forms. This documentation will be invaluable for verifying your payment history.

Avoid Duplicate Submissions: If you submit a form during the pause, resist the urge to resubmit it post-July to avoid processing delays.

Stay Informed: Regularly check FSA’s website and your email for updates regarding the transition. Keeping abreast of official communications will help you adjust your strategies as needed.

No, the program qualifications, application process, and even the PSLF form should remain the same at this point. The changes being made are meant to streamline the application and management process and in doing so, hopefully improve its efficiency.

The idea is that there will be a “one-stop shop” for borrowers going forward. In this central platform, they should be able to track their payment count and forgiveness application status. You should also be able to electronically sign and submit forms, get reminders to certify their employment and apply for reconsideration of a rejected application in one place.

The new process will also include new automation as well as removing the need to transfer the loan to a new student loan servicer. These two changes should make everything go a bit faster.

Related: Public Service Loan Forgiveness: What It Is, How It Works

The upcoming changes are part of a larger effort to revamp how student loans are serviced and shift borrowers to a unified repayment portal under the Federal Student Aid brand.

Historical Concerns with Loan Servicing: First FedLoan, then MOHELA

Historically, a single student loan servicer had responsibility for all aspects of the Public Service Loan Forgiveness program to maintain consistency. First it was the Pennsylvania Higher Education Assistance, operating as FedLoan Servicing. They played this role for 12 years until it withdrew from federal servicing in 2021. The company faced intense criticism for how it handled the program, resulting in separate lawsuits from the New York and Massachusetts attorneys general.

The Missouri Higher Education Loan Authority (MOHELA), which stepped in in 2022, has not seen much improvement. Complaints from borrowers have centered around incorrect payment count, long wait times for calls, and delays in application processing. MOHELA is contending with a class-action lawsuit filed by disgruntled borrowers seeking PSLF. Both MOHELA and its predecessor associate these servicing problems with the program’s complex structure and insufficient communication from the Education Department.

Moving to a Support Model Instead

After these two episodes, the Education Department has decided to take a new approach. They’ve engaged several contractors who manage the government’s $1.6 trillion student loan portfolio like EdFinancial, Aidvantage, and Nelnet. They will now lend behind-the-scenes support to borrowers seeking to benefit from PSLF. This adjustment is aimed at providing the Department of Education with greater direct control and oversight of the program instead of having a single point of failure like they did in the past, which is good news.

The Future of the PSLF Program

In the revised platform, MOHELA will retain some involvement in aspects of PSLF, but will now work in conjunction with other loan servicers and everything will be accessed through StudentAid.gov.

Change, especially in the context of loan forgiveness, can indeed be daunting. However, the shift to FSA management heralds a new era of efficiency and reliability in the PSLF program. By taking proactive steps and staying informed, borrowers can protect their interests and continue making strides towards loan forgiveness.

For more information about the streamlining process check out https://studentaid.gov/announcements-events/streamlining-loan-web-experience. 

The PSLF administration is getting centralized for a number of reasons but mostly so that you can better manage your progress towards forgiveness centrally at StudentAid.gov. This does cause a transition period away from the current MOHELA platform and into the FSA site which means application processing will pause from May to July of 2024. During this time you will still owe payments even if you have an application pending if you have not received a decision by April 30, 2024.

Have questions or need further clarification? Feel free to leave Book A Call with Me. And for those keen on staying updated with the latest developments, consider signing up for our free newsletter—a valuable resource for all things PSLF.

Here’s to navigating these changes with confidence and continuing your journey towards financial freedom. Peace until our next update.