PSLF Student Loan Forgiveness Gets Easier to Qualify For

 October 7, 2021
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Public Service Loan Forgiveness (PSLF) just got a lot easier to qualify for — at least for now.

Specifically, borrowers who were on the “wrong” payment plan may now be able to access PSLF as long as they submit a PSLF form or Direct loan consolidation request by Halloween of next year. So besides getting your costume and candy ready for Oct. 31, 2022, you might also want to get your student loan paperwork in order.

Here are three things to know about:

New Public Service Loan Forgiveness limited waiver opportunity

Usually, borrowers must make 120 payments on an income-driven repayment plan to qualify for PSLF. But the Department of Education announced on Oct. 6, 2021, that prior payments on almost any loan type and any repayment plan can count toward PSLF for a limited time.

The Department estimates that this rule change could help over 550,000 borrowers, with the average borrower getting 23 additional payments on their path toward PSLF. In effect, some borrowers could get loan forgiveness nearly two years sooner than they were expecting.

And if you’ve been making payments on the standard plan, extended plan, graduated repayment or another plan that doesn’t usually qualify for PSLF, you can get credit for those payments thanks to this limited waiver opportunity. This is regardless of whether the payments were made in full or on time.

This suggests that you could get credit for all the payments you did or did not make during the period of emergency forbearance, which started in March 2020 and will continue through Jan. 31, 2022. That said, the rules around this forbearance period have not been explicitly stated, so it’s a good idea to check with your loan servicer for more information.

As before, you should be able to get your remaining student loan balance forgiven once you’ve made 120 payments — and have met the other requirements for PSLF, such as working full-time in a nonprofit.

Parent PLUS loans are an exception

Unfortunately, this waiver applies to all federal loan types except for parent PLUS loans. You can still qualify for PSLF if you have parent PLUS loans, but you must consolidate them and put them on the income-contingent repayment (ICR) plan.

If you have not done so yet, your number of qualifying payments for PSLF will remain at zero until you do. Once you get your parent PLUS loans on an ICR, you can start making progress toward Public Service Loan Forgiveness.

Note that it’s only the parent PLUS loan that doesn’t qualify — graduate PLUS loan payments can be used toward PSLF.

What this announcement means for you

Depending on your loan situation, you might need to take action to get credit for your student loan payments.

  • If you have FFEL or Perkins loans: You must apply for Direct loan consolidation by Oct. 31, 2022, to fold these loans into the Direct loan program. After you consolidate, you must submit a PSLF form to your loan servicer.
  • If you haven’t submitted a PSLF form or Employment Certification Form (ECF) yet: You need to submit a PSLF form by Oct. 31, 2022, to get credit for all your student loan payments. While the PSLF and Employment Certification forms used to be separate, they’ve now been combined into a single form that you can access here.
  • If you have Direct loans but haven’t been assigned to FedLoan Servicing: This would most likely happen if you hadn’t submitted a PSLF form yet. In this situation, you also need to submit a PSLF form.
  • If you have Direct loans and have already submitted your forms: You shouldn’t have to do anything to get credit for your payments, even if they weren’t on income-driven repayment, as long as your employer was approved. However, it’s still worth checking with your loan servicer to make sure you’re on track to getting PSLF. It’s often a good idea to submit the form every year (even if it’s not required) so that the Education Department has a paper trail of your years of qualifying employment.

With these changes to the PSLF requirements, you may want to sign into your Federal Student Aid account to double check your loan types and status. Also make sure to familiarize yourself with the other PSLF criteria, especially around qualifying employment. If you could benefit from this limited waiver opportunity, make sure to take advantage of it and get credit for all the student loan payments you’ve made to date.

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