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lite.cnn.com - on gopher - inofficial | |
ARTICLE VIEW: | |
Student loan forgiveness for public-sector workers will be temporarily | |
paused. Here’s what you need to know | |
By Katie Lobosco, CNN | |
Updated: | |
6:00 AM EDT, Tue April 30, 2024 | |
Source: CNN | |
Student loan forgiveness for such as teachers and nurses will be | |
temporarily paused beginning May 1 as the Department of Education | |
moves management of the program in-house. | |
The transition is expected to last through July and will impact about 2 | |
million borrowers enrolled in the Public Service Loan Forgiveness | |
program, or PSLF, which cancels student debt remaining after an | |
eligible borrower has made 120 monthly qualifying payments. | |
The federally contracted student loan servicer MOHELA (Missouri Higher | |
Education Loan Authority) is currently tasked with servicing the | |
accounts of these borrowers. But after the transition, borrowers will | |
find their up-to-date payment counts and other information at the | |
Federal Student Aid office’s . | |
The change will also apply to the Teacher Education Assistance for | |
College and Higher Education (TEACH) Grant program, which provides | |
money to students who are planning to teach certain subjects in | |
low-income districts. The grants, which are converted to loans if | |
requirements aren’t met, are also serviced by MOHELA. | |
The transition is of the federal student loan system that will happen | |
in phases over the next few years. It’s meant to streamline | |
processing and improve customer service. | |
The PSLF program had previously been plagued by administrative | |
problems. Many borrowers, for example, were inappropriately steered | |
into forbearance by their student loan servicer when they could have | |
been making qualifying payments that counted toward the 120 required | |
for debt relief. The Biden administration has made it easier to qualify | |
for the program, canceling $62.8 billion for nearly 876,000 borrowers | |
to date through PSLF. | |
Here’s what borrowers need to know: | |
Where will my loans be once the transition is complete? | |
The loans will still be held by a student loan servicer. | |
But MOHELA will handling the loans of borrowers enrolled in PSLF. An | |
estimated 1 million borrowers could soon see their loans transferred | |
away from MOHELA, according to the Department of Education. | |
However, borrowers will submit their PSLF forms – to certify eligible | |
employment or apply for forgiveness – through StudentAid.gov. The | |
website is also where borrowers will be able to track their payment | |
progress. | |
Do I have to make payments during the processing pause? | |
Yes, monthly payments are due like they are normally. | |
Borrowers will be able to submit forms to certify employment or apply | |
for forgiveness – but they won’t be reviewed until the transition | |
is complete. | |
What happens if I make my 120th payment during the pause? | |
Normally, once borrowers make their 120th qualifying payment, they can | |
apply for debt relief. But since forms won’t be processed during the | |
pause, borrowers will have to wait for their debt to be canceled. | |
Impacted borrowers can request a forbearance from their servicer, | |
during which they won’t have to make additional payments. But any | |
payments that are made in addition to the 120th will be refunded to the | |
borrower or applied to their other outstanding federal student loan | |
debt, according to the . | |
Will I be able to see my progress during the pause? | |
No, borrowers will not be able to see their PSLF payment counts. The | |
information will be available on StudentAid.gov after the pause ends. | |
What will be different after the transition? | |
After the transition is complete, StudentAid.gov will provide | |
real-time, accurate information on payment counts and processing. | |
Borrowers will also be able to call the Department of Education’s | |
contact center directly for any questions about PSLF. | |
Processing times will be faster, the department said. | |
What if I have a TEACH Grant? | |
are converted to loans when the recipient does not complete the | |
required four years of teaching service. He or she must teach in a | |
low-income school district and in a high-need subject area such as | |
math, science, a foreign language or special education. | |
Once the four years are completed, the grant recipient must submit a | |
form documenting qualifying teaching service. Those forms won’t be | |
processed during the transition, which will last into fall 2024 for the | |
TEACH Grant program. | |
During the pause, the form can be submitted by mail or the recipient | |
can wait until the fall to upload it online. | |
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