Full student loan forgiveness under the Temporary Public Service Loan Forgiveness Rules (PSLF) might be closer than you think – but the time to apply is running out.
“You should hurry to do this because the program is far more inclusive than ever,” says Kristen Ahlenius, accredited financial advisor and director of education at Your Money Line, a financial wellness company.
Payment requirements for the program are more lenient under a limited waiver that expires October 31. Prior to the waiver, Ahlenius said, “PSLF was such a dismissed program for so long because it was so unattainable.”
The basic requirements for PSLF are to work for a qualified government employer, make 120 student loan payments, and have federal direct loans. But the program has many caveats, resulting in approval ratings below 2% and angry, confused borrowers.
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“People thought they were on the right track and submitted their application only to get a rejection,” says Betsy Mayotte, president and founder of the Institute of Student Loan Advisors. “This has especially happened to people who had the wrong type of credit and people who had the wrong payment program.”
In addition to direct loans, borrowers must make payments on an income-based repayment plan to be eligible.
The PSLF waiver addresses this criticism. More time is credited towards the required 120 months, including periods of hardship deferral, months in arrears and months without an income-related repayment. It also opens the door for borrowers with loans from the Federal Family Education Loan Program, or FFELP.
Here’s who should apply now and how to do it.
Who should apply now
Current and former public sector employees
Your professional field is the decisive criterion for the PSLF waiver. Your time with a qualified employer must coincide with the time your student loans have been repaid.
These types of employment typically qualify:
- federal jobs.
- State government jobs.
- jobs in local government.
- Jobs in tribal government.
- Jobs in non-profit organizations.
- Military service.
Your employer is what counts – not what you do. Payments don’t count if you work for a private employer, as a government contractor, or part-time. Parent PLUS loans and joint spousal consolidation loans also don’t qualify — regardless of your job.
Check the PSLF employer search tool to ensure your employment qualifies. “You might be closer than you think,” says Ahlenius.
FFELP loans are not typically eligible for PSLF. However, if you first consolidate your FFELP loans into a direct loan, your past payments will count towards forgiveness — thanks to the waiver.
The employment requirements continue to apply.
Previously rejected applicants
If you have been denied PSLF in the past, you could receive additional months on top of the 120 required for waiver forgiveness.
The Department of Education said it will reassess previously denied PSLF claims and will contact borrowers whose accredited time will be adjusted.
“Anyone who hasn’t heard anything should definitely get in touch again,” says Mayotte.
How to apply
Applying for the PSLF waiver involves just a few steps:
- Log on to studentaid.gov to ensure you have direct loans.
- Consolidate if you don’t have direct loans.
- Complete your Employer Attestation Form(s) with required signatures dated October 31st.
- Submit the form(s) to the Department of Education.
You must complete a separate Employer Attestation form for each eligible position. Using the PSLF help tool, available at studentaid.gov/pslf, instead of the paper form can streamline the process and help avoid errors.
“Anyone who works full-time for a period of time for a government employer or a 501(c)(3) has nothing to lose and everything to gain,” Mayotte says.