Some student-loan borrowers might get debt cancellation now that a major forgiveness program is back

The Public Service Loan Forgiveness program was paused in May as borrowers were transitioned away from MOHELA. Applications are now being processed.

• The Education Department has resumed processing Public Service Loan Forgiveness applications.
• Processing has been paused since May as borrowers were transitioned away from servicer MOHELA.
• The department will prioritize debt relief for borrowers who met PSLF requirements during the pause.

A major student-loan forgiveness program is once again up and running.

As of July 1, the Education Department resumed processing applications for the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.

Application processing had been paused since May to allow the department time to transition borrowers away from student-loan company MOHELA, which had previously been the sole servicer of PSLF. Now, the task of managing PSLF will be split among several federal servicers, and the Education Department will oversee the program through studentaid.gov.

According to Federal Student Aid, the department is now working to update PSLF payment counts to ensure any payments borrowers made while application processing was paused are accounted for. With the Education Department overseeing PSLF, borrowers will see a range of updates, including the ability to monitor the status of their application and track PSLF progress on their student aid dashboards.

Additionally, Federal Student Aid's guidance said it would prioritize loan forgiveness for borrowers who met PSLF requirements during the processing pause.

"You will first receive a notice from ED that you have been approved for forgiveness followed by a separate notice from your servicer once the discharge is complete," the guidance said.

Borrowers who believe they have reached the amount of payments required for relief but do not see that reflected in their accounts can contact their servicer to request a forbearance. However, if their application is denied, the forbearance period will not count toward their relief, and they will be responsible for payments and any interest accrued during that period.

These changes to PSLF result from the Education Department's efforts to overhaul the student-loan industry and make repayment and forgiveness programs easier for borrowers to navigate. The department is also working toward completing its one-time account adjustments, in which it evaluates payments borrowers have made on PSLF and income-driven repayment plans to ensure they are up to date, potentially bringing them to the debt relief requirements.

Other debt relief efforts are in the works, as well. The Education Department is finalizing its broader debt relief plan — intended to benefit over 30 million borrowers — with the goal of implementation this fall. However, the presidential election and likely legal challenges could jeopardize that relief, leaving the fate of broad loan forgiveness uncertain.