November 4, 2021
The U.S. Department of Education says it will reach out to federal student loan borrowers who may have been prematurely denied loan forgiveness under the revamped Public Service Loan Forgiveness (PSLF) program and will reprocess their applications.
The move comes after an NPR review of borrower documents, as well as information provided by people familiar with the rollout, revealed that FedLoan Servicing, which manages PSLF, continued to operate under the loan forgiveness program’s old rules for weeks after the overhaul’s Oct. 6 rollout. As a result, for at least three weeks, the servicer rejected the applications of some borrowers who appear to qualify for forgiveness under the new terms.
In a statement to NPR, Richard Cordray, head of the department’s office of Federal Student Aid (FSA), said, “[We] expect our servicers to provide clear, accurate information to borrowers, and we are taking steps to ensure they do so. We have requested information from [FedLoan’s parent company, PHEAA] about any borrower who submitted an application after October 6th and received a response inconsistent with the new program terms. FSA will ensure these borrowers gain the benefits of the new terms to secure the loan forgiveness they have earned.”