Public-sector workers' student loan forgiveness is temporarily on hold. Here's what you need to understand.
Around two million borrowers registered in the Public Service Loan Forgiveness (PSLF) program, which clears off any remaining student debt after an eligible person has paid 120 monthly qualifying payments, can expect disruptions through July. Currently, MOHELA, a federally contracted loan servicer, deals with such individuals' accounts. After the transition, these borrowers will notice their updated payment records and other details at the Federal Student Aid website.
The upcoming change affects not just the PSLF program but also the Teacher Education Assistance for College and Higher Education (TEACH) Grant program. This scheme offers money to students keen on teaching specific disciplines in impoverished regions. Similar to PSLF, the TEACH Grants transform into loans if certain conditions aren't met. MOHELA has been servicing these programs as well.
The revamp of the federal student loan system, slated to occur in stages over the next few years, intends to smooth out procedures and boost customer service. Despite its previous issues, the Biden administration has canceled over $62.8 billion and helped nearly 876,000 borrowers under the PSLF program.
Here's what you should know:
Where are my loans after the transition?
Your loans will remain under the control of a student loan servicer.
MOHELA won't be the sole servicer of the loans for individuals participating in PSLF. Approximately one million borrowers may witness their loans being shifted from MOHELA, the Department of Education reveals.
Nonetheless, borrowers can submit their PSLF forms to confirm eligibility or seek forgiveness through StudentAid.gov. This is also the platform they'll use to track their progress.
Do I need to make monthly payments?
Yes, your required monthly payments are due just like usual.
Although you can send in forms to verify your employment or request forgiveness, they won't be assessed during the transition.
If I pay my 120th qualifying payment, what happens?
Typically, when an individual pays their 120th eligible payment, they can go for forgiveness. However, as the forms won't be evaluated during the paused period, you'll have to wait until your debt is cancelled.
Impacted borrowers can request a forbearance from their servicer, prolonging their delay in making more payments. However, extra payments beyond the 120th will be reimbursed to borrowers or applied to their remaining federal student loans, states the Department of Education.
Can I monitor my progress during the pause?
Borrowers won't be able to view their PSLF payment totals. The information will become available on StudentAid.gov after the termination of the pause.
What gets different post-transition?
After the transition, the website will display real-time, precise information regarding payment counts and processing. Moreover, borrowers could contact the Department of Education's contact center for PSLF queries.
Faster processing times are also promised.
What's the status of my TEACH Grant?
If you have a TEACH Grant, it gets transformed into a loan if you fail to complete four years of teaching at a low-income school or in an in-demand subject. Topics may include math, science, a foreign language, or special education.
The four-year period’s completion necessitates submitting a form detailing your service breadth. These forms will not be processed during the transition, which continues until the autumn of 2024 for the TEACH Grant program.
During the hiatus, you can send the form by mail or defer uploading it online.
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Source: edition.cnn.com
