ED to Pause PSLF, TEACH Processing During 3-Month Transition Period
By Hugh T. Ferguson, NASFAA Senior Staff Reporter
The Department of Education in a notice published on Tuesday explained its plans to pause processing for the Public Service Loan Forgiveness (PSLF) and Teacher Education Assistance for College and Higher Education (TEACH) Grant programs while undergoing an update of its systems and contact center to transition the management of the program from MOHELA to the department itself.
This update is part of the Unified Servicing and Data Solutions (USDS) servicing contract that goes into effect this spring. Currently, all borrowers who are enrolled in the PSLF or TEACH programs are being serviced by MOHELA, meaning the servicer is solely responsible for reviewing the forms submitted, tracking progress of borrowers enrolled in the programs, and providing customer service related to PSLF or TEACH. Beginning May 1, 2024, borrowers will no longer be able to access their PSLF progress, certified employment, or payment counts on MOHELA’s borrower portal.
When the transition is complete, ED will manage the administrative needs of the PSLF and TEACH programs. Functions like submitting forms, tracking and displaying progress, and customer service will all go through the studentaid.gov portal but borrowers will remain with their current servicer for the day-to-day functions of loan servicing, like making payments and customer service questions unrelated to the two programs.
According to the department, the processing pause will have three key impacts on the PSLF program.
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Borrowers will still be able to submit PSLF forms during this period, but they will not be processed until the pause ends.
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During this period, payment counts will not be updated, but payments completed during this period will be reflected on studentaid.gov when the pause is over.
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Finally, for borrowers who reach the number of qualifying payments for loan forgiveness during this period, any payments made in excess of the 120 qualifying payments will either be refunded or will be applied to any other outstanding federal student loans.
The processing pause for TEACH will also start May 1, 2024 as the program management transitions to ED, but will last into the fall of 2024. Participants in this program are advised to submit their form by mail now for the current or upcoming school year, and that form will be reviewed in the fall after the transition is complete, or they can wait until the transition is complete to submit their form through studentaid.gov.
Borrowers can learn more about the transition through Federal Student Aid’s (FSA) webpage.
Publication Date: 4/3/2024
Kristin P | 4/4/2024 1:2:43 PM
Does this pause also impact new applicants or only those already currently enrolled TEACH grant program?
Eileen E | 4/4/2024 11:19:27 AM
@james C. Thank you for your sarcastic remark. Dealing with financial aid has been a roller coaster ride for the last year. I am hoping things will slow down for a month or two. There have been too many changes in a short period of time.
@David S. I believe the last three former Secretaries of Education failed loan borrowers when it came to PSLF. In 2014 and 2015, I was constantly pressuring FedLoans and ED to provide more education about PSLF. Many loan borrowers were unaware of the issue with the type of loan they needed (FFEL vs. Direct) for the program. I remember saying that things were going to blow up in 2017, and I could see how staff members were struggling with it. Another frustration I have is that human resource departments are clueless about the program. ED needs to educate this group more too.
James C | 4/3/2024 3:28:36 PM
I was being sarcastic
David S | 4/3/2024 11:26:16 AM
Working with keenly aware, activist students who are at my school literally studying public policy, it's not uncommon for our staff to start a conversation about PSLF that's met with a cynical "but my understanding is that PSLF doesn't work and that borrowers wind up not receiving their forgiveness." We try to assure them that yes, there have been road bumps (not helped by a former Secretary of Education who refused to process applications) but that eligible borrowers get what they are entitled to. We try to help students understand and have faith that this works, and that we're not selling them an undeliverable bill of goods just to make their education sound less expensive.
This doesn't help.
Eileen E | 4/3/2024 10:55:00 AM
@james C. I hope so too. The ED hasn't been very successful with transferring loan data from one organization to another. Hopefully ED is able to handle this. ED wasn't successful managing loans back in 2009-2010. It is why ED hired loan servicers to help them.
James C | 4/3/2024 8:58:50 AM
I am confident the transition to the Department of Ed will be seamless and trouble free : )
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