Fed Loan Program Is Ending: What It Means for Student Loan Borrowers
The Fed Loan Program is ending, and with it, FedLoan Servicing will cease its contract with the U.S. Department of Education. This major change in the student loan servicer landscape will affect millions of federal borrowers in the coming months.
FedLoan Servicing previously managed Public Service Loan Forgiveness (PSLF) applications. Now, that responsibility will be transferred to MOHELA, a smaller loan servicer that is stepping into a larger role within the Department of Education.
MOHELA and AidVantage Take Over Student Loan Forgiveness
MOHELA is currently collaborating with AidVantage—another loan servicer that replaced Navient—to handle loan consolidations. After consolidation, those borrowers are returned to MOHELA for ongoing servicing.
The major players in this transition include MOHELA, AidVantage, Nelnet, Great Lakes, and Edfinancial. These changes are happening alongside the end of Covid forbearance, impacting how and when borrowers must resume payments.
Limited PSLF Waiver and Its Critical Deadline
A significant concern for borrowers is the Limited PSLF Waiver, which is under a strict deadline of October 31, 2022. This waiver could help many achieve student loan forgiveness, but the transfer of millions of borrower files from FedLoan to MOHELA and others has caused delays.
The backlog in the PSLF approval process may prevent eligible borrowers from receiving timely confirmation of forgiveness or qualifying credit months. If the waiver is not extended, this could push relief into 2023, creating financial uncertainty.
What Borrowers Must Know About Fed Loan Program
Due to the Fed Loan Program ending, some borrowers may need to resume payments after the forbearance ends—even if they qualify for forgiveness under the Limited PSLF Waiver. Without confirmation from FedLoan or MOHELA, borrowers could be making payments on loans that should already be forgiven.
This scenario creates undue hardship and stress for those managing federal student loan debt. Timely processing and transparency are critical to ensure that all borrowers receive the forgiveness they’re entitled to.
Get Help Navigating the Fed Loan Program
At Hope Credit, we are committed to keeping clients updated on every change in these evolving federal programs. If you have questions about the Fed Loan Program ending, your PSLF status, or how to work with MOHELA or AidVantage, we’re here to help.
Visit our office at 6375 S Pecos Rd #224 Las Vegas, NV 89120, or call us at (760) 916-9313. Business hours are Monday – Friday, 8:30 am to 5:00 pm. You can also reach us by email at support@hopecredit.net.
Stay informed, stay proactive, and let us help you navigate your student loan forgiveness journey.