You’re Fired! Education Department to Take Over PSLF from MOHELA

Our apologies if the subject line startled you; in context, we wanted to alert you of an important loan servicing change coming next month… and yes, we were surprised to hear this as well.

As of May 1st, the Department of Education will be taking over the administration of the PSLF program from MOHELA, who only recently was “awarded” this contract from Fed Loans. Here’s the announcement from StudentAid.gov, and here’s MOHELA’s update. Key takeaways for you:

• If you’re on Auto-Debit with MOHELA now, this will not be disrupted, though there may be a break in access and communications during the transfer. Wait it out, as we believe that where administrative errors take place, borrowers will receive the benefit of any doubt.
• That said, ensuring your past and future payments qualify for PSLF remains your responsibility. The retroactive windows have now expired, and PSLF credit is only available to those with qualifying loans who have met core PSLF requirements along the way.
• MOHELA will still manage your loan payments, but they may transfer some accounts to other servicers… be on the lookout for such updates. It is only the administration of PSLF that will be transferred to StudentAid.gov.
• We can still submit PSLF forms through the PSLF Help Tool anytime. Processing will be delayed, but that’s nothing new at this point.
• During the transfer, you must keep current with qualifying payments towards PSLF. If you’re still not making payments (unless your IDR allows for a $0 payment), the “on-ramp” following CARES  payments through October does NOT count towards PSLF.

A silver lining here is that increasingly, action items like IDR changes, PSLF Forms, and consolidation can all be completed on line. MOHELA had increasingly become unavailable in person in recent months, and we expect this to be the case when ED takes over.

Ok, that’s all for now. It may still be a lot, but we’re here for ya…

Resources NOW

Existing BenElevate clients can log in and update their PSLF Summary anytime. If you can benefit from consolidation, changing your repayment plan, filing your taxes separately, or other strategic items that will lower your debt cost, we’ll follow-up with you.

30-Minute Support Session

If you’d like a BenElevate Advisor to help update or confirm your strategy, or complete action items with you live, or both, register with us at a 20% discount here, an incredible value at $120. The average PSLF savings is $70k.

If you’re not registered with BenElevate and are seeking ongoing, comprehensive support, check out our PSLF Concierge, which is currently discounted to $250 annually for borrowers of $50k or more in federal debt.

About Author

Jason DiLorenzo

Jason is the Founder of BenElevate, an early stage fintech company working to address the student debt crisis by bringing to bear tools, expertise, and bespoke solutions to streamline student debt management for borrowers and employers.