Student loan updates have dominated media headlines recently, and you may be trying to make sense of them to understand which may apply to you. Here’s a synopsis of everything we know at this moment:
Biden’s student loan application is live, but held up in court
The application for broad loan forgiveness of up to $20k went live on October 17th,and can be completed in less than 60 seconds by attesting that you meet the qualifications. Unfortunately, a Federal appeals court threw a “temporary stay” into the mix just days later. Read our ongoing coverage of this story and find the application link here. While we are unable to predict an outcome, it is clear that the Biden administration is committed to providing this relief.
The White House extends critical components of the PSLF “Limited Waiver”
You may remember back in April when we shared the story of the “IDR Waiver” aimed at 20-to-25-year forgiveness programs. That wasn’t technically a waiver, but rather a “one-time account adjustment” which automatically gives borrowers IDR credit for payments made under other plans. This week, the Dept of Ed announced that this adjustment won’t be completed until July of 2023, and you now have until May 2023 to consolidate FFEL and Perkins loans to Direct to position them for forgiveness. That said, our understanding is that the PSLF waiver offers broader benefits and is the optimal path for PSLF candidates. As more details emerge, we will continue to provide updates.
More details regarding the PSLF Overhaul
Back in October of 2021, the White House announced the PSLF “Limited Waiver” and overhaul. This latter “Overhaul”, referencing permanent changes to PSLF, is now coming to light. Changes were first previewed in July, a fact sheet was released this week, and final details are due out in November. Basically, all changes are positive, and benefit different borrowers to different degrees based on your circumstances. Check out our initial blog on “The Future of PSLF” (as the White House has billed it) here, and stay tuned for updates.
Have you spoken to Mohela lately?
We reported earlier how overwhelmed Fedloan had been while trying to process all of these PSLF waivers. Well they passed that problem onto Mohela when they transferred all the PSLF account there is summer. Our colleagues over at Mohela indicate a backlog of over 400k PSLF forms and about 7k pouring in each day. This week we’re getting reports back from clients that Mohela has an automated answering service turned on at certain times saying that the queue is completely full, and it is not possible to even get on hold for customer service. If you must get through sooner, we recommend trying back on alternative days and times. Our contacts tell us the best time to call is between 7pm and 9pm CT.
As always, our dedicated team of student loan advisors is standing by to sort all of this out for you with a student loan consultation. That’s enough news for now.
Brandon Barfield is the President and Co-Founder of Student Loan Professor, and is nationally known as student loan expert for graduate health professions. Since 2011, Brandon has given hundreds of loan repayment presentations for schools, hospitals, and medical conferences across the country. With his diverse background in financial aid, financial planning and student loan advisory, Brandon has a broad understanding of the intricacies surrounding student loans, loan repayment strategies, and how they should be considered when graduates make other financial decisions.