The Status of IDR & PSLF Credits for Separated JCLs...

The mechanisms and timeline...

The Department of Education (ED) updated their PSLF banner on their Joint Consolidation Loan Separation News and Updates web page this week: “Borrowers who are pursuing Public Service Loan Forgiveness (PSLF) will temporarily see missing payments on any new Direct Consolidation Loans that are a result of separating their joint consolidation loan. Updated PSLF information will display in spring 2026.”

This is the first time Federal Student Aid (FSA) has communicated a focused season/year for PSLF credit for separated JCL loans.

This is the first time Federal Student Aid (FSA) has communicated a focused season/year for PSLF credit for separated JCL loans.  It, in conjunction with other reporting, confirms that borrowers may not see accurate PSLF counts for many months after separation, even if they applied on time and are fully eligible.  It reinforces that the issue is related to systems and processing, not borrower eligibility, which seemingly confirms an administrative delay rather than a policy change toward PSLF and Income-Driven Repayment (IDR) credits.

Because Joint Consolidation Loans (JCL) have existed for decades, most JCL borrowers have likely made 20 years of payments—the threshold for undergraduate loan discharge under the Income-Driven Repayment (IDR) Forgiveness Plan. Around 84% of DoUsPart! Members are public servants with qualifying months toward Public Service Loan Forgiveness (PSLF), and most expect discharge once they receive proper credits. Many JCL borrowers worked to pass the Joint Consolidation Loan Separation Act (JCLSA) in 2022 to access PSLF, either through the PSLF Waiver Program or the IDR account adjustment. Despite separating their loans, borrowers continue to accrue interest through IDR payments or forbearance while waiting for credits from the IDR One-Time Adjustment or PSLF Waiver. Federal Student Aid’s (FSA) PSLF Banner confirms that borrowers will remain in limbo for some time.

A recent discussion with Senator Warner’s office in late 2025 confirms that ED still acknowledges its responsibility to deliver IDR and PSLF credits to JCL borrowers who have applied or received separation.

DoUsPart! continues to monitor and archive Department of Education (ED) JCLSA guidance for separation and IDR/PSLF credits. ED has not made any substantial changes to its published News and Updates or Phase II procedures, both released in mid to late 2024. A recent discussion with Senator Warner’s office in late 2025 confirms that ED still acknowledges its responsibility to deliver IDR and PSLF credits to JCL borrowers who have applied or received separation. Forecasts for system updates have ranged from as early as September 2025 to February 2026, with recent reports supporting the February timeline, which will be discussed next.​

The National Student Loan Data System (NSLDS) is ED’s central record for tracking student loan repayment and IDR/PSLF payments—and the source of ongoing tracking issues for JCL borrowers. JCL loans have not been systematically tracked in NSLDS since July 2006, unlike mainstream student loans. When the JCL program was struck from the Higher Education Act (HEA), ED stopped tracking JCL loans in NSLDS, keeping only limited records for ‘Primary Borrowers’ and relying on servicers for most details. A 2022 video published to DoUsPart! Facebook group covers this in more depth. While the JCLSA restored borrowers’ statutory rights and guaranteed separation, the process for reintegrating them into NSLDS remains unresolved, as FSA has not yet implemented the necessary policy and procedures. As a result, FSA and servicers offer inconsistent guidance on the timing and process for the issuance of IDR and PSLF credits. Additionally, court injunctions have created backlogs for other repayment programs, further delaying progress for JCL borrowers.

Adam Minsky’s recent Forbes article  provides a good vehicle for examining the current landscape and mechanisms and how it may affect JCL borrowers through the first quarter of 2026.

The following excerpts from Minsky's article help shed light on how things may work.  Some insights are provided to add relevant commentary and perspective.

The Education Department provided limited details in its court filing about how IDR student loan forgiveness progress will be tracked for borrowers with eligible student loans going forward.

“ED no longer employs a regularly scheduled process for assessing whether a borrower has reached the qualifying number of months for a discharge,” explained the department in its filing. The department then outlined its current process.

Likely, the new administration’s response to court injunctions and approach to the various IDR repayment plans drove them to suspend the existing process.

ED contracts with several loan servicing companies, which as relevant process student loan applications, track the status of existing student loans, and report data to ED,” said the department. “Every month, the loan servicers record when a borrower has accrued progress that month towards loan forgiveness, and report that progress to the National Student Loan Data System (’NSLDS’), a student loan database maintained by ED. NSLDS then checks whether borrowers enrolled in IDR plans have reached their particular threshold for a discharge. Currently, NSLDS does not check eligibility on any specific schedule.

There is a strong likelihood that servicers of Direct Consolidation Loans, following separation, will only credit IDR and PSLF for the newly created loans. This is because re-consolidation typically resets payment counts, and the Department of Education (ED) has yet to fully implement its policies for the PSLF Waiver and IDR Adjustments. Until credits for separated JCL borrowers are instituted under ED’s current policies and procedures, ED will rely solely on records for the new Direct loans from servicers.

It remains unclear how the National Student Loan Data System (NSLDS) determines whether borrowers in IDR plans have met discharge thresholds, but the process appears to be manually, not systemically, triggered. Adjustments to PSLF/IDR credits based on prior JCL payment history require records from the previous JCL servicer. Generally, JCL servicers must retain loan records for three years. However, under 34 CFR § 682.414, a lender is required to retain loan records for at least 3 years after the borrower's full repayment or at least 5 years after full payment from another source. Because the Treasury paid off the JCL during separation, the five-year retention period should apply.

Currently, there is no clear guidance on how to locate and credit prior payments. According to a supervisor in AidVantage’s Consolidation Department, payment counters for JCLs were supposed to transfer and be credited to new consolidations, but this has not generally occurred. Other sources suggest that ED is awaiting a data integration to properly credit qualifying JCL payments.

The department further explained that currently, its systems are only set up to check eligibility for student loan forgiveness under the Income-Based Repayment, or IBR, plan. The department anticipates updating its systems to include the ICR and PAYE plans in February 2026, with discharge determinations made every other month going forward. However, the filing suggests that all of this will essentially be occurring in the background; without the tracker, individual student loan borrowers will have no easy way to clearly and accurately assess their progress and view their eligibility for student loan forgiveness.

In 2023, Nelnet Diversified Services (NDS), a division of Nelnet, was awarded a five-year contract as the primary entity for federal student loan servicing and data management, including critical National Student Loan Data System (NSLDS) data exchange and integration functions. It is highly likely that administrative changes and the Department of Government Efficiency (DOGE) 's activities in 2025 disrupted or delayed these contracting arrangements. A deduction is that NDS would be integrating ICR and PAYE plans in February, along with, or followed shortly after by JCL payment credits.  Based on the PSLF banner on the JCLSA News and Updates page and ED’s projected timeline in Minsky’s Forbes article, the data integration for JCL payment credits discussed above would align with that timeline.

Clearly, a lack of transparent and consistent communication from ED, FSA, and their servicers forces speculation and deduction rather than clearly understood policy and procedure.  

Stay tuned.