Additional Coverage:
- Student loan servicer pauses payment counts tracking in a move experts say could cause confusion (cnn.com)
Chesterfield, MO—Student loan borrowers are facing a new wave of uncertainty as loan servicer MOHELA has temporarily halted tracking of loan forgiveness payment counts for income-driven repayment (IDR) plans. This action, impacting millions, follows ongoing legal challenges to President Biden’s student loan relief initiatives and comes amidst a backdrop of political wrangling over student loan forgiveness programs.
Borrowers contacting MOHELA, which services over 7 million federal student loan accounts, are being met with an automated message directing them to the Department of Education website for updates. The pause is linked to litigation surrounding the SAVE plan, an initiative designed to lower monthly payments for borrowers. Republican-led states have challenged the plan, claiming it overreaches executive authority and unfairly burdens taxpayers.
The Department of Education confirmed the pause, explaining that a court injunction against the SAVE plan and other IDR plans has necessitated the temporary removal of payment tracking. A banner on borrower accounts directs them to the department’s website for updates on the legal proceedings.
Experts are expressing concern about the confusion and anxiety this situation is creating for borrowers. Betsy Mayotte, president of the Institute of Student Loan Advisors, called the situation “unfortunate,” attributing it to the ongoing legal battle over the SAVE plan. Alyssa Dobson, director of financial aid at Slippery Rock University, described the situation as “mass chaos and confusion,” highlighting the difficulty borrowers face in accessing crucial information about their loan forgiveness progress.
The Department of Education maintains that borrowers can still access their Public Service Loan Forgiveness (PSLF) payment counts through their online accounts. However, the broader uncertainty surrounding IDR plans, coupled with the inability to track progress, is creating significant stress for borrowers who made life decisions based on the promised relief programs. Dobson emphasized the mental health toll this uncertainty is taking on borrowers, who are now questioning the future of their loan forgiveness plans.