A Pause for the Public Service Loan Forgiveness Program

The Education Department has paused the processing of applications for student loan forgiveness by borrowers who work in public service jobs for about two months as it updates its systems and seeks to fix the problems plaguing its forgiveness program.

The pause for the Public Service Loan Forgiveness program began May 1, the department’s Office of Federal Student Aid said. Borrowers can still submit applications and all other forms, like those documenting their eligibility, but they won’t be processed until the pause ends in July, the office said.

As part of a long-planned effort, the Education Department is moving management of some aspects of the forgiveness program from a contractor’s website to a central dashboard on StudentAid.gov, the federal financial aid portal, so borrowers can easily get up-to-date information on their status, the department said. In a recent blog post, it called the changes “an exciting and necessary step” that would lead to faster reviews of applications.

During and after the pause, the 2.2 million borrowers working toward loan forgiveness in the public service program will continue to make loan payments on their assigned loan servicer’s website, the department said.

Millions began resuming regular payments on their federal student loans just months ago, after a three-year hiatus due to the pandemic.

Alpha S. Taylor, a staff attorney at the National Consumer Law Center, said that while some changes had been anticipated, the processing pause was unexpected. He said it was worrisome because some borrowers might have to delay making financial decisions until later this summer, after they get word on their eligibility for debt relief. Also, he said, a backlog may build up during the pause, causing more delay when the system starts up again.