Student Loan Borrowers Could Get Debt Relief Now That PSLF Is Back

• The Ministry of Education has resumed processing applications for public service loan forgiveness.
• Processing has been suspended since May as borrowers were transferred out of service provider MOHELA.
• The department will prioritize debt relief for borrowers who met PSLF requirements during the pause.

A major student loan forgiveness program is back in operation.

As of July 1, the Department of Education resumed processing applications for the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.

Application processing has been suspended since May to allow the department to transition borrowers from student loan company MOHELA, which was previously the sole servicer for PSLF. Now, the task of administering PSLF will be split among multiple federal servicers, and the Department of Education will oversee the program through studentaid.gov.

According to Federal Student Aid, the department is currently working to update the PSLF payment count to ensure that all payments made by borrowers during the application processing suspension are accounted for. Because the Department of Education oversees PSLF, borrowers will see a series of updates, including the ability to monitor the status of their application and track PSLF progress on their student aid dashboards.

Additionally, federal student aid guidelines indicate that it would prioritize loan forgiveness for borrowers who met PSLF requirements during the processing pause.

“You will first receive a notice from the Department of Education that your release request has been approved, followed by a separate notice from your service provider once the release is complete,” the guide says.

Borrowers who believe they have met the payment amount required to receive relief but do not see it reflected in their accounts can contact their debt collector to request a forbearance period. However, if their request is denied, the forbearance period will not count toward their relief and they will be responsible for payments and interest accrued during that period.

These changes to PSLF are a result of the Department of Education’s efforts to reorganize the student loan industry and make it easier for borrowers to navigate repayment and forgiveness programs. The department is also working to finalize its one-time account adjustments, in which it assesses borrowers’ payments on PSLF and income-driven repayment plans to ensure they are current, which could lead to them meeting debt relief requirements.

Other debt relief measures are also in the works. The Department of Education is currently finalizing its broader debt relief plan, which is expected to benefit more than 30 million borrowers, with a goal of implementation this fall. However, the presidential election and likely legal challenges could jeopardize that relief, leaving the fate of broad loan relief uncertain.