Student loan borrowers who go to the PSLF program for assistance face tremendous hurdles. The backlog of applications just continues to grow, making an already arduous process even more challenging. The PSLF program was originally created in 2007 under President George W. Bush. It enables employees of non-profit organizations and government entities to have their federal student loans forgiven after they make ten years’ worth of eligible payments. Recent events have added confusion and complexity to the process for millions of borrowers.
Perhaps the most recognized of these initiatives is the PSLF Buyback, which the Biden administration launched last year. Under this program, borrowers may retroactively apply for credit if they have made 120 months of qualifying employment. Plus, they can make up for any months they missed while in forbearance or deferment. As of last Friday, the Education Department still had an estimated 65,448 PSLF Buyback requests in the pipeline. Adding to an already large backlog of over 1.5 million pending applications for a new, more generous student loan repayment plan.
The backslide has only worsened since the 59,000 applications still pending when Trump left office—the most under review in history —were being examined. On March 7, the past administration finalized their executive order. This rule would have narrowed PSLF eligibility depending on what kind of organizations borrowers had worked at. This directive aimed to bar groups that engage in unlawful or criminal conduct, but its language has confused and alarmed a significant number of borrowers.
Education Department’s Ellen Keast represented the Department during these times, and recognized the pains inflicted on applicants. She stated, “The Department is working its way through this backlog while ensuring that borrowers have submitted the required 120 payments of qualifying employment.” The backlog has led to questions about the department’s capacity to adequately handle these applications. It further casts doubt on their compliance with the new eligibility criteria.
As financial aid expert Mark Kantrowitz put it, that’s the main point. Changes will still not affect borrowers’ credit for time worked if their organization is subsequently removed from the program, until changes are implemented. He noted that “borrowers who are affected by the processing backlog will eventually be switched into a qualifying repayment plan.”
Many borrowers remain worried about the processing backlogs related to switching repayment plans. Kantrowitz remarked, “The problem is the forms to switch into another plan are not being processed.” Millions of people are more confused than ever about what they should do. They fear if they will be able to reach forgiveness before the 10-year clock runs out.
Nancy Nierman urged eligible borrowers to complete their Buyback applications even with the current backlog. “If you are eligible for the Buyback, there’s no harm in submitting the application,” she said. Furthermore, borrowers are eligible to apply for Buyback while they submit forms to leave IDR and enter into a new repayment program.
To help answer these difficulties, applicants should take advantage of the PSLF Reconsideration portal located within their Federal Student Aid accounts. In response, Ellen Keast assured allies that this portal means an easier process for people looking to access Buyback benefits.
While the PSLF program aims to provide relief for public service employees, recent changes and administrative hurdles have created uncertainty for many borrowers. As they continue to face all of these hurdles, borrowers need to be vigilant about upholding their own student loan debt.