As of July 1, 2024, the PSLF program has successfully transitioned from MOHELA and now is fully managed by ED on StudentAid.gov. For all inquiries surrounding your PSLF discharge and any associated refunds, visit StudentAid.gov.
If you work in certain public service jobs and make 120 payments on your Direct Loan(s), you may be eligible to have your loans forgiven. If you are a teacher in a low-income school or educational service agency, you may be eligible for Teacher Loan Forgiveness.
It's because of processing delays on MOHELA's end. If you submitted an application to recalculate payments under the new income-driven repayment program, you may receive a forbearance letter. The forbearance will be lifted when the application is processed and the amount of your new payment is assessed.
In July 2024, AFT sued MOHELA for a wide range of unlawful practices, including illegally executing a “call deflection” scheme to deny service to borrowers who need help.
As part of its long-term vision for a new online environment for borrowers, the U.S. Department of Education (ED) will begin transitioning the servicing of the PSLF Program and the TEACH Grant Program from its sole interim PSLF servicer, MOHELA, to ED via StudentAid.gov beginning May 1, 2024.
During the on-ramp period (through Sept. 30, 2024), we automatically put your loan in a forbearance for the payments you missed. Here's what this means: Your account was no longer considered delinquent and was made current. We didn't report you as delinquent to credit scoring companies.
MOHELA is a company that services federal student loans by collecting and tracking payments. Also called the Higher Education Loan Authority of the State of Missouri, it's a nonprofit servicer that manages both federal and private student loans.
Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.
With forbearance, you won't have to make a payment, or you can temporarily make a smaller payment. However, you probably won't be making any progress toward forgiveness or paying back your loan. As an alternative, consider income-driven repayment. You have a limited amount of forbearance available.
The PSLF Program allows you to receive forgiveness of the remaining balance of your Direct Loans after you have made the equivalent of 120 qualifying monthly payments under an accepted repayment plan while working full-time for an eligible employer.
MOHELA is changing the backend processing system
In the background, MOHELA is leaving their long-time servicer processing technology called COMPASS. This is a legacy system from FedLoan/PHEAA. They're moving to a new system that Aidvantage and EdFinancial use, which hopefully will streamline servicer performance.
As of July 2024, the PSLF Program is now fully managed by the Department via StudentAid.gov, rather than by a single loan servicer, making it easier for borrowers to track their progress toward forgiveness.
If you work in certain public service jobs and have made 120 payments on your Direct Loans, you may be eligible to have your loans forgiven. If some or all of your payments were not made on a qualifying repayment plan for PSLF, you may be able to receive loan forgiveness under a temporary opportunity.
Your loans were not sold. ED will continue to own your loans; however, MOHELA will manage your loans and assist you on ED's behalf as your federal student loan servicer. This change in servicer will not impact the existing terms, conditions, interest rate or available repayment plans of your federal student loans.
If you have 120 or more qualifying payments, you can opt into forbearance and stop making payments on your loans. If you continue making payments, any overpayments will be refunded if you have no additional outstanding loans. You can contact your loan servicer to change your forbearance preference.
The U.S. Department of Education's COVID-19 relief for student loans has ended. The 0% interest rate ended Sept. 1, 2023, and payments restarted in October.
After at least 20 years of student loan payments under an income-driven repayment plan — IDR forgiveness and 20-year student loan forgiveness. After 25 years if you borrowed loans for graduate school — 25-year federal loan forgiveness.
A federal court recently blocked the implementation of the SAVE Plan. To comply with the court order and prevent incorrect billing, the Education Department directed MOHELA to place affected borrowers into forbearance.
Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.
Borrowers can access these records at studentaid.gov. If your Mohela loans are listed, they are federal. If the loans do not appear, they are private. A phone call to Mohela can also clarify any confusion about loan status.
Biden Administration Extends Student Loan Collections Pause Until 2025. According to Politico, the Biden administration indicated last week that it will not pursue involuntary collections activities against defaulted federal student loan borrowers until early 2025.
Your federal student loans may be placed in an “administrative forbearance” if an administrative or technical issue is impacting your ability to pay your bill. You'll be off the hook for student loan payments and interest accrual until the problem is resolved.
Starting May 1, 2024, you can continue to submit your PSLF forms, but they will be put on hold and not processed until July. We encourage you to use the PSLF Help Tool to submit your forms. This will speed up processing once the transition is complete.