An apparent Education Department data error is causing student loan forgiveness credit to be wiped out overnight, setting borrowers back and causing widespread panic. The glitch is just the latest in a series of major administrative errors borrowers have encountered as the department and its contracted loan servicers rush to implement major changes to federal student loans in the wake of legislative and regulatory updates.
“PSLF Qualifying Months of Employment Incorrect,” reads a new banner message displayed on borrowers’ account dashboards at StudentAid.gov, the department’s web portal for managing federal student loans. “The number for your PSLF qualifying months of employment is incorrect. We are working to fix the data issue and will provide an update soon. We apologize for the confusion caused by this error.”
Here’s what we know about the newest problem impacting federal student loans, and what borrowers should know.
Student Loan Forgiveness Credit For PSLF Normally Displayed On Account Dashboards
PSLF, or Public Service Loan Forgiveness, allows borrowers to discharge their federal student loans after making 120 qualifying payments, equivalent to 10 years. Typically, a qualifying payment must be made on a Direct federal student loan under either a 10-year Standard repayment plan or an income-driven repayment plan while the borrower works as a full-time employee for an eligible nonprofit or public institution. After the 120th qualifying PSLF payment, the borrower would be entitled to have their student loans discharged.
To get PSLF credit, borrowers must periodically confirm their employment by completing a PSLF employment certification form signed by their employer. Once the Education Department processes the form, borrowers can view their qualifying PSLF payment count and student loan forgiveness progress on their account dashboard at StudentAid.gov. The qualifying payment count should increase each time a borrower certifies their PSLF employment, provided they are meeting all of the eligibility rules of the program.
Qualifying PSLF Payments For Student Loan Forgiveness Suddenly Disappear
But earlier this week, borrowers began reporting sudden drops in their earned PSLF credit. Months that had previously counted toward student loan forgiveness, in some cases from prior years, were abruptly erased, even though they had apparently met all PSLF criteria for the period. Some borrowers received a formal notification with a heading titled, “Qualifying Payment Reduction Notice.”
Borrowers have taken to public forums to voice their frustrations and concerns.
“WTF! I just submitted my employment certification like I do every year and I was up to 103 payments,” wrote one user on Reddit. “Now my payments say only 88 and every payment since 24 is listed as ineligible even though they were previously qualified. This is beyond infuriating I feel like this entire process is a scam and now my payments have been delayed even further.”
“Payment count suddenly changed?” wrote another student loan borrower on the forum. “I was at 115 payments on my tracker. I made my 120th payment in July, submitted ECF – Student Aid didn’t show June/July payments – was waiting for my form to process. Got an email tonight that said ‘you have a message from Student Aid’ – login and now my payment counts have all dropped to 99 or 96 and the payments shown are from 2024!? What is going on! This was suppose to be a happy month – finally hitting my goal, Student Aid is making this nothing but stressful.”
“It’s a total mess and it’s happening to almost everyone,” wrote another user on Reddit. “Imagine if mortgages were serviced with this much chaos and (let’s call it what it is) cruelty. It for sure feels like we’re being punished over and over again for taking out student loans.”
PSLF Data Glitch May Be Source Of Erased Student Loan Forgiveness Credit
The Education Department did not respond to a request for comment by Friday. However, on Thursday, the new banner message appeared on borrowers’ StudentAid.gov account dashboards, suggesting that a “data issue” may be responsible for the erased student loan forgiveness credit. But that banner message, which is now seemingly displayed on all account dashboards, is causing even more confusion, as it tells borrowers that their qualifying PSLF payment counts are incorrect, even if their student loan forgiveness credit has been unaffected.
In the meantime, borrowers are reporting that the department’s call centers for the Office of Federal Student Aid are confirming that the drop in student loan forgiveness credit is due to a data issue that they are working to correct.
“Called Student Aid back – was told that every call they’ve had this morning has been about this issue, that I can be assure my payments do still qualify and its an error that will be fixed,” wrote one of the original Reddit community members in an update on Thursday. “They are waiting for the Department of Education.”
Latest In Series Of Glitches Impacting Student Loan Forgiveness And Repayment Programs
If true, this would be just the latest in a series of major administrative debacles the department and its contracted student loan services have forced upon borrowers. Earlier this week, MOHELA, one of the department’s contracted loan servicers, began sending borrowers erroneous delinquency notices, falsely alerting borrowers who had no payments due on their student loans that they suddenly owed thousands of dollars in past-due payments and were at risk of defaulting. Prior to that, the department contacted scores of borrowers and instructed them to reapply for their repayment plan because their monthly payments had been calculated incorrectly.
Other borrowers have been reporting major problems accessing affordable income-driven repayment plans through the department’s online application systems. Some borrowers haven’t been able to enroll in specific repayment plans that they qualify for, while others have received incorrect payment calculation estimates for their student loans based on their income. Borrowers also continue facing major processing backlogs for student loan forgiveness programs, such as for PSLF Buyback.
Earlier this week, two student loan borrower advocacy organizations called on the department and the White House to pause payments and interest on student loans until the system can function properly, citing “mounting administrative failures.”
“Systemic failures, such as preventable mistakes from student loan servicers and lack of oversight from the Department of Education, are causing borrowers to suffer on an unprecedented scale,” said the Student Debt Crisis Center and the Debt Collective in a joint statement on Wednesday.
What Borrowers Should Do If Their Student Loan Forgiveness Credit For PSLF Has Dropped
For now, borrowers on track for PSLF who have experienced a reduction in their student loan forgiveness credit within the last week may want to adopt a wait and see approach, at least for the moment. While the Education Department has released no specific details on the scope of the issue or the timeline for relief, the banner message on StudentAid.gov, and information being provided to borrowers via the department’s call centers, suggest this is a glitch that the department is aware of and is working to fix.
In the meantime, borrowers should maintain good records. Download and retain all available correspondence related to student loan forgiveness and PSLF progress including your payment history and income-driven repayment plan letters from your loan servicer. Retain all letters and notices from the department related to your qualifying PSLF payment count. And take screenshots of any reductions or improper adjustments of your PSLF payments, including via the month-by-month breakdown of payments available on your PSLF Tracker at StudentAid.gov. It may also be prudent for borrowers whose student loans have been impacted by these issues to reach out to their federal elected officials, such as their congressperson or United States senator’s office, both to make them aware of the issue, and also to enlist their help in getting the Education Department to fix it.
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