The Temporary Expansion of Public Service Loan Forgiveness (PSLF)
You may have heard that the federal Public Service Loan Forgiveness (PSLF) program is offering a temporary expansion of eligibility criteria. This is big news, as it means many more federal loan borrowers could qualify for loan forgiveness than could previously. Could you be one of them? We've included details below.
PSLF was designed for individuals who have been paying off their Federal Direct Loans in a qualified payment plan while working in an eligible public service organization at a full-time capacity for at least ten years. Once these individuals have made 120 qualifying payments toward their loans, the remaining loan balance may be forgiven.
On October 6, 2021, the U.S. Department of Education announced some temporary changes to PSLF that expand the program's eligibility criteria. These changes are only in effect until October 31, 2022. They include the following:
- Repayment plan expansion: Now, payments made under any repayment plan count. The payments must have been made on or prior to October 21, 2021 and on a Direct Loan, and the borrower must submit a PSLF form by October 31, 2022.
- Loan type expansion: Now, payments that were made on a Perkins Loan or a loan within the Federal Family Education Loan (FFEL) program count, as long as the borrower consolidates those loans into a Direct Loan and submits a PSLF form by October 31, 2022.
- Payment type expansion: Now, payments made that were less than the amount due or a few days late count as long as they were made on or prior to October, 21, 2021 and on a Direct Loan, the borrower was working in eligible employment, and a PSLF form is filed by October 31, 2022.
Remember that this temporary expansion still requires borrowers to have Direct Loans, so if you have other types of federal loans, you'll need to consolidate those loans into a Direct Consolidation Loan before October 31, 2022.
To apply for PSLF, you'll need to submit the PSLF form for every qualifying employer you've worked for while in repayment. It's wise to do this every time you change employers. Both you and your employer need to sign the form. The U.S. Department of Education can then certify that your employer(s) does indeed qualify.
Once you hit your 120 qualifying payments, you'll need to submit the PSLF form one final time to apply for forgiveness.
We're hosting a PSLF webinar with a subject matter expert on Thursday, May 19, 2022 at 6:30 p.m. If you're planning to apply for PSLF, we strongly recommend that you attend. You'll hear the full details on the temporary expansion of eligibility criteria noted above, and have the opportunity to ask any questions you have about the program. You can register here.