The Education Department confirmed on August 18 that it is rescinding some Public Service Loan Forgiveness (PSLF) credit borrowers had previously received, citing data errors from the Biden administration’s implementation of temporary relief initiatives. Borrowers began reporting sudden drops in their qualifying payment counts toward the 120-payment forgiveness threshold starting the previous week, pushing many further from eligibility to discharge their remaining student loan balances.
The reversals stem from “coding errors” the department says resulted from changes implemented in May 2024, when the Biden administration issued credits to address past servicing failures. Those credits brought borrowers closer to forgiveness under PSLF and income-driven repayment plans, as compensation for being steered into forbearance or having their records mishandled by loan servicers. More than 1.2 million borrowers had received $90.6 billion in forgiveness as of January 2026, with an average relief of nearly $75,000 per borrower.
A department spokesperson stated that while implementing changes required by the One Big Beautiful Bill Act, Federal Student Aid identified “multiple PSLF counter code errors” that resulted in inaccurate payment counts. “Like other missteps caused by the previous Administration, FSA has resolved the issue and already notified the vast majority of affected borrowers of updates to their payment counts,” the department said. However, the agency declined to specify how many borrowers are impacted or confirm whether legitimate PSLF credit rescinded in error will be restored.
Borrowers have reported losing credit for periods when they were making payments under income-driven repayment plans while employed in qualifying public service roles—work that should otherwise count toward forgiveness. One borrower told researchers that six months of previously qualifying payments disappeared overnight, pushing their expected forgiveness date from early 2027 to a year later. The department’s StudentAid.gov dashboard initially displayed a banner stating PSLF payment counts were “incorrect” and would be updated, but later changed to indicate updates were still “in progress.”
The credit rollback arrives amid broader turmoil in federal student loan administration. Student loans face major overhaul as SAVE plan ends, new repayment rules take effect on July 1, 2026, including a stricter requirement that payments must be made on time to count toward PSLF—previously, a 15-day grace period allowed some late payments to qualify. Borrowers are also contending with miscalculated monthly payments under income-driven repayment plans, false delinquency alerts, and massive application backlogs for loan forgiveness and discharge programs.
Julia Barnard, former student loan ombudsman for the Consumer Financial Protection Bureau, called the payment reversals “profoundly cruel.” She and other advocates argue the department should hold borrowers harmless for errors they did not cause. Randi Weingarten, president of the American Federation of Teachers—whose members represent the largest share of PSLF recipients—said the reversals mean “borrowers who could see the light at the end of the tunnel are now being forced to pay more and defer their dreams for months and years on end.” She warned the union would pursue “every legal option—including litigation—to make our members whole.”
The Biden administration had rushed to distribute credits ahead of the 2024 election, according to a former Federal Student Aid official. That official said the department faced pressure to “move on so we can say 1 million people were forgiven under PSLF,” but the agency underestimated the complexity of coordinating with loan servicers and correcting underlying data problems. The Trump administration is now correcting what it views as flawed implementation, even as it contends with staffing cuts that have reduced FSA personnel from 1,433 to 777 between January and December 2025.
Student debt forgiveness clears for 170,000 borrowers after court ruling earlier this month, but the PSLF credit reversals underscore the fragility of loan forgiveness gains. The Student Debt Crisis Center said on social media that “the federal student loan system is riddled with servicing errors, payment miscalculations, and ‘glitches’ erasing years of qualifying PSLF credits,” and called for a national pause on student loan payments until the problems can be fixed.
Sources
- Forbes — Education Department confirmation of PSLF credit rescissions, scope of rollback, and borrower impact
- Politico — Details on Biden-era errors, department staffing cuts, and advocacy group responses
- Brookings Institution — PSLF forgiveness statistics and program history
- Student Debt Crisis Center — Statement on systemic loan servicing failures
