Some student-loan borrowers are losing credits toward a key loan forgiveness program.
The Department of Education confirmed that it is adjusting its count of completed payments downwards for some borrowers pursuing Public Service Loan Forgiveness, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.
This means that those borrowers now have a longer path to achieving debt relief through PSLF, after losing some qualifying payments through this adjustment.
Politico first reported that the Education Department is rolling back credits the Biden administration granted to borrowers who experienced account mismanagement by their servicers.
A department spokesperson said that the Federal Student Aid office “identified multiple PSLF counter code errors stemming from changes implemented in May 2024 under the Biden Administration. These errors resulted in inaccurate payment counts for some borrowers.”
The issue has been resolved and “the vast majority” of affected borrowers have been notified, the spokesperson said, adding that the department “remains committed to ensuring that every qualifying payment is properly credited to a borrower’s account.”
The department did not comment on the number of borrowers affected by this adjustment. It’s the latest in the growing list of challenges borrowers have faced following the implementation of President Donald Trump’s student-loan repayment overhaul, which took effect on July 1.
Borrowers have told Business Insider that they’ve received incorrect monthly bills when their actual payments were higher. Some have also received erroneous past-due notices, saying that their accounts were about to default when that wasn’t the case. When attempting to seek clarity on those issues, borrowers have reported challenges getting assistance from their servicers.
The Education Department has previously said it’s aware of the ongoing issues and fixes them after they arise. Advocates said they’re concerned about the toll the confusion is taking on borrowers.
Julie Margetta Morgan, an Education Department official under Biden, said in a statement that “someone needs to stand up for borrowers here.”
“Make sure public servants get what they’re owed. Make servicers pay for errors they caused. Make Federal Student Aid accountable for the problems it caused too,” Morgan said. “Do all of that before you even think about reinstating a single loan.”
Have a story to share about student loans? Were your PSLF payments rolled back? Contact this reporter at [email protected].
