SDCC Statement: Servicing Failures Erase PSLF Payment Credit, Harming Borrowers

FOR IMMEDIATE RELEASE

August 7, 2026

Contact:

Natalia Abrams

Email: natalia@studentdebtcrisis.org

WASHINGTON D.C. — Borrowers are waking up to find their hard-earned progress toward Public Service Loan Forgiveness (PSLF) impacted by a catastrophic system failure, as their qualifying payment counts have been abruptly and inexplicably reduced on StudentAid.gov. While the Department of Education offers a vague acknowledgement of a "data issue," its refusal to disclose the full scope or provide a concrete timeline for restoration is an unconscionable betrayal of the people our nation depends on most.

"The Department of Education not only has no response for the latest offense in a long line of preventable errors, they also have no excuse," said Sabrina Ashley, SDCC Executive Director. “The Department of Education continues to fail and borrowers repeatedly pay the price. ED has created the perfect storm for complete system failure: fire over half your staff, begin implementation of a massive overhaul, and predictably fail when you can’t service borrowers in any meaningful capacity. The logical next step is a payment pause while ED and servicers sort out their mess.”

This is not an isolated incident. The need for an immediate pause on federal student loan payments and interest continues to grow in urgency following a pattern of servicing failures including recent erroneous delinquency notices from MOHELA, incorrect repayment calculations, and processing backlogs affecting IDR and PSLF Buyback applications. Borrowers are being asked to make consequential, irreversible financial decisions inside a system that cannot reliably track progress toward forgiveness they have already earned.

SDCC urges the Department of Education to publicly disclose the scope and cause of this error, restore all improperly removed PSLF credit without requiring further borrower action, and ensure no borrower is penalized for a failure that is not of their making. SDCC will continue monitoring this situation and provide updates and resources to affected borrowers.

For more information or to schedule an interview, please contact Natalia Abrams via email natalia@studentdebtcrisis.org.

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