How do I know if I received loan forgiveness?
Your loan servicer will track your qualifying monthly payments and years of repayment and will notify you when you're getting close to the point you would qualify for forgiveness of any remaining loan balance. To determine if your remaining loan balance will be forgiven, contact your loan servicer.
Log in to StudentAid.gov to track your PSLF progress. For updates on your application status, visit MOHELA's website or contact them at 1-855-265-4038.
PSLF processing times vary based on whether you've previously submitted employment documentation and other factors. But you can generally expect to wait one to three months for your loan forgiveness application to be fully processed.
You'll be notified or see a $0 balance
You will receive notification of your loan discharge via email, mail and/or your online loan servicing account (depending how your communication preferences are set). It will also be reflected when you log in to the Federal Student Aid site using your FSA ID.
Specifically, new Consolidation loans may have their payment counts temporarily set to 0 while the payment count update is processing. We appreciate your patience while we work to accurately update your payment counts. Please log in to mohela.com to manage your loans and check out your PSLF tracker information.
Public Service Loan Forgiveness (PSLF)
PSLF Forgiveness: When you reach 120 or more qualifying payments for PSLF, your account is eligible to be placed into a forbearance and no payment will be due. To process forgiveness, a final review of your account will be conducted, which will take at least 90 business days.
Many factors impact processing times, including if your loans were with another servicer and require a transfer, if the form had any missing fields such as an employer's EIN, the number of PSLF forms we receive, and if ED is reviewing your employer's eligibility, among other factors.
About $1.7 billion of the forgiveness went to borrowers who have been paying on their student loans for 20 years on an IDR plan but have not received their forgiveness. In total, the administration said it has forgiven $45.7 billion in loans through the IDR plans for 930,500 borrowers.
What if my application is approved? If you qualify for forgiveness, cancellation, or discharge of the full amount of your loan, you won't have to make any more payments on that loan. If you qualify for forgiveness, cancellation, or discharge of a part of your loan, you'll need to pay back the remaining balance.
In total, the Administration has now approved debt cancellation for nearly 3.9 million hard-working Americans totaling almost $138 billion in relief. Many of these borrowers planned their lives and families around the promise of forgiveness through programs such as Public Service Loan Forgiveness (PSLF).
Will my credit score go up after my student loans are forgiven?
As long as your loans were in good standing at the time they were discharged and your accounts are being reported properly to the credit reporting bureaus, you won't see a huge difference in your score. On the other hand, you could see your score drop if your account wasn't in good standing prior to the discharge.
If you work full time for a government or nonprofit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you've made 120 qualifying payments—i.e., 10 years of payments.
Credit card debt forgiveness could hurt your credit
You stop making payments to your creditors as you save for your settlement. Creditors typically report the debt as "settled" rather than "paid as agreed" on your credit report once it's paid off. This shows that the creditor wasn't able to collect on the full debt.
PSLF processing takes several months, and total time to loan forgiveness is at least ten years, requiring 120 qualifying payments. Timelines can vary based on individual circ*mstances. In some cases, it could even take longer.
The accusations against the Missouri Higher Education Loan Authority, better known as MOHELA, were laid out in a 47-page report released Wednesday by the American Federation of Teachers and the Student Borrower Protection Center, which alleged four in 10 of MOHELA's borrowers have been affected by “servicing failures,” ...
The PSLF application process can take a few months. It may take longer if you haven't been submitting regular PSLF Forms, or shorter. During the wait, you have the option of continuing to make payments or putting your loans into forbearance.
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.
MOHELA is one of several companies servicing 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.
If your qualifying payment total is at 120 or more, 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 MOHELA to change your forbearance preference.
Monitor the status of all of your loans (ones serviced by MOHELA and other Federal Student Loan providers) by logging into your Federal Student Aid account.
What is the average wait time for MOHELA?
MOHELA reported an average wait time of less than two minutes to connect with its customer service representatives via telephone in July 2023. Complaints referenced in the class-action lawsuit say wait times reached up to nine hours in 2022.
MOHELA borrowers recently reported an average hold time of over 2 hours, only adding to an already stressful and frustrating experience associated with student loan debt.
The Biden administration has wiped out loans totaling $127 billion for 3.6 million borrowers — the biggest wave of student debt cancellation since the government began backing educational loans more than 60 years ago.
| State | Number of people who applied or were deemed automatically eligible for relief | Number of fully-approved applications sent to loan servicers for discharge |
|---|---|---|
| Alaska | 38,000 | 24,000 |
| Arizona | 496,000 | 314,000 |
| Arkansas | 222,000 | 144,000 |
| California | 2,315,000 | 1,473,000 |
Borrowers Could Be Short Of Student Loan Forgiveness Threshold. Since not all past loan periods count toward student loan forgiveness under the IDR Account Adjustment, even borrowers whose loans originated more than 20 or 25 years ago may not quite have reached the milestone for discharge.
References
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