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For Immediate Release
04/05/2024
Media Contact: media@mohela.com


MOHELA Announces Updates from U.S. Department of Education to the Public Service Loan Forgiveness (PSLF) and TEACH Grant Programs

St. Louis, MO - April 5, 2024 - MOHELA, a governmental non-profit organization dedicated to helping the student loan borrowers it serves, is announcing changes being made to the servicing it currently performs for the Public Service Loan Forgiveness (PSLF) Program and the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program. Changes are being made by the U.S. Department of Education, Office of Federal Student Aid (FSA) under its "Next Generation of Federal Student Loan Servicing" vision announced in May 2022.

"As a federal contractor for the U.S. Department of Education, Office of Federal Student Aid, MOHELA will be supporting the government on its planned transition of servicing of the PSLF Program to StudentAid.gov," said a MOHELA spokesperson. "The decision to transition PSLF servicing to FSA was a years-long strategy first announced by the Department back in 2022, prior to MOHELA becoming the interim PSLF servicer, with FSA's long-term goal of a transition always set to take place around this time. During MOHELA's time as the interim PSLF servicer, MOHELA processed nearly $50 billion in PSLF forgiveness for nearly 700,000 borrowers at the direction of FSA - a record-high for the program. We remain committed to supporting FSA borrowers during this transition and beyond."

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. Any borrowers who are already working toward or are interested in PSLF, or are a TEACH Grant recipient, will work directly with ED. The customer's federal student loans will remain with a federal contractor for non-specialty servicing activities.

Borrowers seeking more information from ED about the transition can visit StudentAid.gov/streamlining.

Beginning July 2022, only 20 months ago, MOHELA began its work as the interim PSLF servicer on behalf of the government. During the history of the program, approximately 857,000 borrowers have received PSLF forgiveness. Of those who received PSLF forgiveness under the program, MOHELA processed nearly $50 billion in PSLF forgiveness for nearly 700,000 (80%) borrowers at the direction of FSA - the highest number of forgiveness processed in the history of the program. In contrast, directly prior to MOHELA becoming the sole PSLF servicer, only about 165,000 borrowers had received $10.5 billion in loan forgiveness during the previous five-year period from 2017 through June 2022.

*MOHELA does not have authority to process loan forgiveness for eligible borrowers until authorization is provided by FSA; the final decision to discharge loans is made by FSA as the owner of the loan, not MOHELA. Additionally, PSLF counters of eligible payments and PSLF forgiveness are processed from data contained in files from FSA.

Below is a timeline of MOHELA's work to support the federal government as its interim PSLF servicer.

  • July 8, 2021:
    FedLoan Servicing notified FSA that it would not accept an extension of its federal student loan servicing contract, which included processing for the PSLF Program. They stopped servicing loans in the fall of 2022.

  • January 26, 2022:
    At FSA's request, MOHELA agreed to participate as the government's PSLF contractor to support the 1.5 million PSLF borrowers in the interim while ED planned its future vision for servicing in preparation for the existing federal servicing contracts scheduled to end December 31, 2023.

  • May 19, 2022:
    FSA Announced the Next Generation of Federal Student Loan Servicing , which is the agency's long-term vision for a new online environment for borrowers. The vision included the transfer of servicing of specialty programs, including the PSLF Program and TEACH Grants, to StudentAid.gov.

  • July 1, 2022:
    MOHELA began its work as the interim PSLF servicer on behalf of the government.

  • July 7, 2022 – September 27, 2022:
    MOHELA received transfers of borrowers participating in the PSLF program from FedLoan Servicing.

  • October 31, 2022:
    The Limited PSLF Waiver period ended, which allowed borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF.

  • April 1, 2024:
    In alignment with FSA's vision for the Next Generation of Federal Student Loan Servicing, MOHELA began its contract with FSA for the Unified Servicing and Data Solution, which does not include servicing of specialty programs (TEACH Grants, PSLF, or Total and Permanent Disability).

  • April 2, 2024:
    FSA announced that ED will begin transitioning the PSLF servicing to FSA via StudentAid.gov beginning on May 1, 2024.