Changes to Public Service Loan Forgiveness (PSLF)
We receive several popular questions from prospective college students and their families. On the topic of student loans and borrowing, one common one is: What is Public Service Loan Forgiveness (PSLF)? PSLF is a key program that can help certain student loan borrowers lower their overall loan debt by working for certain organizations after college. Let's dig into the details of the program, and also highlight some recent changes.
PSLF forgives the balance of your federal student loan debt after you have made 120 qualifying payments while participating in a qualifying federal loan repayment plan and while working for a qualifying place of employment full time. To qualify, you must:
- work full time for a U.S. federal, state, local, or tribal government or not-for-profit organization
- have Federal Direct Student Loans
- be enrolled in an income-driven repayment plan
- make 120 qualifying payments
That's the gist of the program itself. You can learn more about it here. Recently, there have been some changes to the program to help benefit the borrower.
- Regarding payments, now any payment will qualify that is made no later than 15 days after the due date. This allows for the following:
- Prepayments will now count as a qualifying payment, which wasn't always the case.
- Lump sum payments will now count for as many qualifying payments as they cover. For example, if a borrower has a $50 monthly payment and she makes a $200 one-time payment in January, that borrower is now considered pre-paid until April, and her $200 payment will count as four qualifying payments. That prepayment used to only count as one payment.
- There are also two other user-friendly changes on the PSLF website. There have been enhancements made to the Help Tool: the interface has been modernized and functionality has been added to help keep track of a borrower's loan actions.
- There is now one form for borrowers to complete to certify their qualifying employment and apply for loan forgiveness. There used to be two forms. The new form is called the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application and can be found online here.
To read a full overview of PSLF, including details on requirements and applying, please visit the Federal Student Aid site here.
Please note that there is currently a temporary expansion of PSLF criteria in place until October 2022. You can learn more about that here.