For years, the PSLF program has been administered by FedLoan Servicing, the Direct loan servicing wing of the Pennsylvania Higher Education Assistance Agency (PHEAA). Last year, FedLoan announced that it would not be renewing its contract with the Department of Education, which was set to expire in December. This would mean that the 8.5 million student loan borrower accounts handled by FedLoan Servicing would need to be transferred to a new loan servicer, including all borrowers currently on track for PSLF.
At nearly the last minute, PHEAA and the Department reached an agreement to extend FedLoan’s contract for another year, delaying the looming loan servicing transfers. But the Department still needed to find a new loan servicer to take over FedLoan accounts and administer the PSLF program going forward once the contract extension expires.
Other borrowers whose federal student loans are serviced by FedLoan Servicing but are not on track for PSLF will have their loans transferred to other Education Department loan servicers such as Aidvantage, Edfinancial, and Nelnet