- The government made key changes to the Public Service Loan Forgiveness program in 2021.
- PSLF forgives the student debt of workers in the public sector after 10 years of eligible payments.
- The most recent changes make it easier for past payments to qualify a borrower for forgiveness.
- Read more of Insider’s student loan coverage here.
About 550,000 borrowers may be closer to student loan forgiveness due to changes in the Public Service Loan Forgiveness Program, the Department of Education made last year. A limited-time waiver through October 2022 will temporarily alter the rules of the PSLF program and make it easier for borrowers to qualify for forgiveness.
What is Public Service Loan Forgiveness?
Public Service Loan Forgiveness, or PSLF, forgives the debts of graduates employed in the public sector following at least 10 years of service and eligible payments. Your particular job isn’t important, only that you work for a public service employer. There’s no limit to the amount of money that can be forgiven.
Here are the basic requirements to qualify:
- Be an employee of the US federal, state, local, or tribal government, or an eligible not-for-profit organization (this includes military service)
- Work full-time for that employer
- Make 120 qualifying payments
You won’t be eligible for the program if you work for a labor union, partisan political organization, or for-profit company (which includes government contractors).
What are the new changes to the PSLF program?
All repayment plans now count for PSLF
Until October 31, 2022, borrowers may receive credit for past payments that wouldn’t normally be eligible for PSLF. All you need is qualifying employment — it doesn’t matter the repayment plan, or if the payment was made in full or on time.
Parent PLUS Loans are not eligible for PSLF, even with this waiver, though Grad PLUS Loans are eligible.
Previously, you had to repay your loans under an Income-Driven Repayment Plan to be eligible for PSLF, but now past payments under any plan count.
Direct Loans and Direct Consolidation Loans count for PSLF
If you have Direct Loans or Direct Consolidation Loans, the government’s changes will apply to you. If you consolidate previously ineligible loans (like Perkins Loan or FFEL Loans) into Direct Consolidation Loans by October 31, 2022, these changes will also apply.
Non-payments ($0 towards your loans) on IDR plans during the student loan payment freeze due to the COVID-19 pandemic have counted towards the 120 monthly payments you need to make to qualify for PSLF. Under the waiver, the guidelines are a little murkier on non-payments made on other payment plans.
“Logic tells us that if a Direct Loan borrower was and is eligible for the ongoing repayment pause, then yes, their non-payments on a Standard Repayment Plan should count toward PSLF progress,” said Andrew Pentis, certified student loan counselor and higher education finance expert at Student Loan Hero.
The government didn’t explicitly confirm what happens in this scenario, so you should contact your federal loan servicer and confirm the new eligibility rules for PSLF, Pentis said. FFEL and Perkins Loans still aren’t eligible for the repayment pause. You’ll need to consolidate any non-Direct Loans to possibly become eligible for non-payments to count for PSLF — though it isn’t guaranteed.
What should you do next?
- Visit your Aid Summary page and verify your loan details. You’ll need to log into your account, then go to the loan breakdown section and see the types of loans you’ve taken out. You may need to verify your employment to determine if you’re eligible for PSLF.
- Submit your PSLF Certification and Application Form. You need to submit this form annually or when you change employers. You don’t have to fill out separate forms for previous years and the government recommends you use the PSLF help tool to assist you in filling it out. The government will use the information you input to let you know if you’re making qualifying PSLF payments.
- If you have Perkins or FFEL Loans, consolidate them into a Direct Consolidation Loan by October 31, 2022. You won’t get credit for payments under this waiver period if you consolidate after the deadline. After you’ve consolidated, submit your PLSF form to your loan servicer.
To learn more about the PSLF program and its changes, contact your loan servicer or read the Department of Education’s fact sheet.