Beginning on May 1, the Department of Education will temporarily pause student loan forgiveness for public-sector workers, such as teachers and nurses, as they move management of the program in-house. This transition is expected to last through July and will impact about 2 million borrowers enrolled in the Public Service Loan Forgiveness program (PSLF), which cancels student debt after 120 qualifying payments. The current servicer for these borrowers, MOHELA, will no longer manage their accounts, and borrowers will find their payment information on the Federal Student Aid office’s website.
In addition to PSLF, the transition will also impact the Teacher Education Assistance for College and Higher Education (TEACH) Grant program, which provides grants to students planning to teach in low-income districts. If requirements are not met, these grants are converted into loans, also serviced by MOHELA. This change is part of a larger overhaul of the federal student loan system aimed at streamlining processing and improving customer service. The PSLF program has faced administrative challenges in the past, with many borrowers facing issues such as inappropriate forbearance recommendations.
During the transition, borrowers will still have a student loan servicer, but MOHELA will no longer be the sole servicer for PSLF borrowers. Forms for certification of employment or forgiveness will need to be submitted through StudentAid.gov, where borrowers can also track their payment progress. Monthly payments will still be due as usual, but forms will not be processed until the transition is complete. Borrowers can request forbearance during this time if needed and any additional payments made will be refunded or applied to other federal student loan debt.
After the transition, StudentAid.gov will provide real-time information on payment counts and processing times, with the goal of faster processing overall. The Department of Education’s contact center will also be available to assist borrowers with any questions about PSLF. For TEACH Grants, recipients must complete four years of teaching service in a low-income school district in a high-need subject area. Forms documenting qualifying teaching service will not be processed during the transition, which will last until fall 2024 for the TEACH Grant program. Recipients can submit the form by mail during the pause or wait to upload it online in the fall.
