The Pennsylvania Higher Education Assistance Agency (PHEAA) was solely responsible for servicing managed the U.S. Department of Education’s Public Service Loan Forgiveness (PSLF) program that offers eligible borrowers in public service the opportunity to have their remaining federal loan balances forgiven after completing 120 qualifying monthly payments. In its role, PHEAA oversaw various aspects of student financial aid programs, including loan guaranty, loan servicing, financial aid processing, and outreach for both state and national higher education initiatives. In July 2021, it was announced that PHEAA would cease servicing federal student loans, with the effective date set for December 14, 2021.
To facilitate a smooth transition, PHEAA began the process of migrating its federal loans and PSLF responsibilities to another federal student loan servicer. As part of this process, PHEAA gradually reduced its staff responsible for servicing these loans. However, in October 2021, the U.S. Department of Education announced a temporary expansion of the PSLF program’s eligibility requirements, leading to an unforeseen surge of hundreds of thousands of new applications. Unfortunately, PHEAA was inadequately staffed to handle this sudden influx effectively, prompting the agency to seek support.
In response to PHEAA’s request for assistance, Nelnet promptly assigned 120 full-time back-office associates to handle the processing of PSLF applications. With tens of thousands of applications in need of careful review to determine eligibility for loan forgiveness, Nelnet’s team diligently worked through the backlog. To ensure accuracy and compliance, Nelnet’s Quality Assurance associates conducted random spot-checks on applications during processing.
Through their collaboration, Nelnet provided valuable support to PHEAA during a critical period, helping process and review numerous PSLF applications and facilitating a smooth transition of accounts to the new loan servicer.