Do you Qualify for Public Service Loan Forgiveness?

Terrance Hutchins |

 

The Public Service Loan Forgiveness(PSFL) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. That is a mouthful so let’s break it a little more. Here is your qualifying checklist.

 

  • Be employed full time(based on your employer definition or 30 hours a week whichever is greater) by a US federal, state, local or tribal government or non profit organization. 
  • Have Direct Loans(or consolidate other federal student loans into a direct loan)
  • A direct loan is a loan received under the William D Ford Direct Loan program. Loans that do not qualify are: Federal Family Education Loan(FFEL), Federal Perkins Loans, Federally Insured Student Loans, National Defense Student Loans, Supplemental Loans for Students, Health Education Assistance Loan or Private Lenders.
  • If you have these types of loans you have the option to still receive forgiveness but would have to consolidate your loans. More on that later!
  • To check the type of loans that you have you can go to the link https://studentaid.gov/fsa-id/create-account/launch. 
  • Repay your loans under an income driven repayment plan(These rules have been temporarily suspended so keep reading for more information that is time sensitive!)
  • Make 120 qualifying payments
  • A qualifying payment is a payment made: after Oct 1, 2007, under a qualifying repayment plan, you paid the full amount due on your bill no later than 15 days from the due date while you were employed full-time by that qualifying employer you checked earlier.
  • Payments that do not count toward your 120 are payments that were made: while you were in school, during the grace period, during a deferment or a forbearance. You do get credit for payments made during COVID and the payments don’t have to be consecutive. You also get credit for extra payments. For example if your payment under the IDR is $100 and you pay $500 you get credit for 5 payments.

 

To verify if you are making qualifying payments you will want to submit a certification and application annually or when you change employers. This is extremely important if you have a direct loan and worked full-time for a qualifying employer during the COVID forbearance period as you will receive credit towards your 120 payments even if you did not make any payments!

 

You can download and fill out the form via this link https://studentaid.gov/sites/default/files/public-service-application-for-forgiveness.pdf. You can also access assistance on filling out the form via this help tool link. https://studentaid.gov/pslf/. You can mail, fax or upload the form to MOHELA’s website https://www.mohela.com/DL/secure/account/loginStep1.aspx



 

TEPSLF

 

In 2018 the Consolidated Appropriations Acts provided limited additional conditions under which if you made payments that weren’t under a qualifying repayment plan for PSFL, that these payments could be eligible towards your forgiveness. This is under a separate program called Temporary Expanded  Public Service Loan Forgiveness(TEPSLF). Very Creative!

 

To qualify for TEPSLF(similar to above) you would have to:

  • Made all your payments under a qualifying plan for TEPSLF(basically fill out the form, submit it and see if those payments qualified)
  • Had 10 years of FT employment with a qualifying employer that is certified by MOHELA, the Education Department’s loan servicer.
  • The amount you paid 12 months prior to applying for TEPSLF and the last payment you made before applying for TEPSLF were at least as much as you would have paid under an IDR plan and you made 120 of those payments while working for a qualifying employer
  • All the same post Oct 1, 2007 and due date payment requirements apply as referenced above.

 

PSFL Waiver

 

Here is the time sensitive information! The “limited PSFL waiver” was introduced as a way for borrowers to receive credit for past periods of repayment that would not have otherwise qualified under PSFL. You have to apply for this waiver by Oct 31, 2022(scary right!). 

 

So here is your PSFL waiver checklist:

 

  • As mentioned above, first check out the types of loans you have via the site https://studentaid.gov/fsa-id/sign-in/landing?redirectTo=%2F. At the bottom you will see a loan breakdown section. In the Loan Breakdown section, you’ll see a list of the loans you took out, even those you paid off or consolidated into a new loan.
  • If you expand “View Loans,” then select the “View Loan Details” arrow next to a loan, you’ll see a more detailed name for that loan. Direct Loans begin with the word “Direct.” Federal Family Education Loan Program loans start with “FFEL.” Perkins Loans include the word “Perkins” in the name. Parent PLUS loans(pour one out) are not eligible under the limited PSLF waiver.
  • Well don’t just stand there do something!  But only in these situations.
  • You have a FFEL, Federal Perkins or uncommon older federal student loan
  • Consolidate these loans into a direct consolidated loan by October 31st 2022. You can start that process via this link https://studentaid.gov/app/launchConsolidation.action. You will not receive credit for time in repayment if you don’t consolidate and submit your PSLF form by that date.
  • After consolidation, submit your PSFL form that we referenced earlier.

 

  • Key Points
  • Past periods of repayment will now count whether or not you made a payment, made that payment on time, for the full amount due, or on a qualifying repayment plan.
  • Forbearance periods of 12 consecutive months or greater, or 36 cumulative months or greater will count under the waiver. In fall 2022, ED will begin making account adjustments to include these periods. Forbearance periods provided by the COVID-19 emergency relief flexibilities are not included toward these months.
  • Months spent in deferment before 2013 will count under the waiver. Additionally, ED will include economic hardship deferment on or after Jan. 1, 2013. ED will apply these periods of deferment to your account in fall 2022.
  • Periods of default and in-school deferment still do not qualify.

Here is a  summary table from the Federal Student Aid Department. 

 

Normal PSLF Requirements

Included in Limited PSLF Waiver Until Oct. 31

Direct Loan payments only

Payments on Direct, Perkins, or FFEL Loans

Payments through Standard or income-driven repayment plans only

Payments through any repayment plan (including Graduated, Extended, and others)

Full, on-time payments only

Late or partial payments

Must be employed full-time by a qualified employer at the time of applying for forgiveness

Can get forgiveness if not employed by a qualifying employer at the time of applying for forgiveness

Period of service for Teacher Loan Forgiveness (TLF) can’t also count toward PSLF

Period of service for TLF can count toward PSLF, as long as you certify employment for that period

 

So now I am tired. I don't write this many words but I do it for the people. So if this applies to you make sure you are getting your PSFL form annually and check if your payments are qualifying. Even if they previously were not eligible they may be now but you have to act by October 31!!! I leave you in peace.