Some borrowers pursuing Public Service Loan Forgiveness are seeing previously displayed payment counts reduced as the Education Department corrects coding errors in its loan-servicing system.

The U.S. Department of Education said it is correcting "coding errors" that resulted in inaccurate PSLF payment counts. The changes are not the result of a new PSLF policy, according to the Student Loan Servicing Alliance, reported CNBC on Thursday.

Borrowers See PSLF Counts Change

PSLF allows eligible government and nonprofit workers to have their federal student debt forgiven after making 120 qualifying monthly payments. Some borrowers have reported unexpectedly lower payment counts, including one case in which a borrower’s count fell from nearly 120 to 94, reported CNBC.

Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York, told CNBC that some clients had seen their PSLF counts drop.

"It’s concerning when someone who relies on numbers reported to them by the government finds out that, through no fault of their own, those numbers were incorrect," Nierman said.

The Education Department did not immediately respond to Benzinga’s request for comment.

Student Loan System Faces Broader Changes

The adjustments come as the federal student-loan system undergoes a broader overhaul. Millions of borrowers are transitioning away from the Biden-era Saving on a Valuable Education, or SAVE, plan, while the new Repayment Assistance Plan, or RAP, has become one of the replacement options for eligible borrowers.

For borrowers taking out federal student loans on or after July 1, payments generally must be made under RAP for them to qualify for PSLF. The Tiered Standard Repayment Plan, which is the default for new borrowers, does not qualify for PSLF.

The new law also limits repayment options for many Parent PLUS borrowers, potentially affecting their path to PSLF.

Separately, the Education Department recently corrected a court filing after incorrectly stating that five student-loan borrowers had most recently reported zero income. The agency attributed that error to technical problems with its National Student Loan Data System and said a 2024 system update removed some older income information.

Some Borrowers Could See Counts Rise

Scott Buchanan, executive director of the Student Loan Servicing Alliance, said the PSLF adjustments were "purely technical accounting errors" and noted that some borrowers could see their counts increase.

Higher education expert Mark Kantrowitz said borrowers whose counts changed have not necessarily been given a reason for the adjustment.

"When a borrower isn’t given a specific explanation, they are unable to verify whether the change was accurate," Kantrowitz said.

Borrowers who believe their qualifying payments were incorrectly removed can submit a PSLF reconsideration request, while consumer advocates recommend keeping records of payment counts and employment certifications.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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