THE PUBLIC SERVICE LOAN FORGIVENESS (PSLF) OVERHAUL: WHAT YOU NEED TO KNOW.

Excellent news in the student loan world this week! The Department of Education announced an overhaul of the Public Service Loan Forgiveness (PSLF) program, which is expected to improve the PSLF status of over 550k borrowers… including many of you. The PSLF loan type and repayment plan requirements have been loosened to include payments made on ANY Federal student loan while working full-time in a qualified environment since the program’s inception in 2007.

Read on to learn about the changes and if you might need to take action. Here are the key takeaways:

1) ANY past payment on FFEL and Perkins loans will qualify for PSLF as long as they are consolidated to Direct Loans by 10/31/2022. That’s NEXT year, if you read that too fast…

2) Any plan payments made that were not counted towards PSLF due to being late, or in the wrong payment plan, will be considered qualifying payments.

#1 is certainly the most significant change for most borrowers. That said, if you’re pursuing PSLF (or wish to), consolidated all of your loans to Direct Loans right after you graduated, and have been using an Income-Driven Repayment (IDR) plan since, you need not take any action.

However, if you have FFEL and/or Perkins loans, or are unsure if you’ve made qualifying payments in the past, please follow these steps:

First, find out if you qualify for additional payments by logging into www.studentaid.gov and viewing your aid summary. Expand out all of the options and see if you took out any loans that DO NOT begin with the word “Direct”. If you find some, you may qualify.

If you HAD FFEL or Perkins loans, but have since consolidated them:

Did you work in a qualifying setting and make payments on these loans? If so, have you ever submitted an Employment Certification Form (ECF) for that time period? If so, you may receive automatic credit in the next few months. If not, complete the ECF using the PSLF Help Tool and send it to the applicable employer(s).

If you still have FFELL or Perkins loans:

Consolidate your FFEL Program loans and Perkins Loans into a Direct Consolidation Loan by Oct. 31, 2022. We suggest doing this ASAP using the PSLF Help Tool to guide you towards the loans that must be consolidated. This is important, because you cannot receive credit for payments under this limited-time period if you consolidate after that date. After the consolidation is complete, you’ll then use the Help Tool to submit a PSLF form to complete your Employment Certification on those loans.

If you made any payments on a Direct loan, submitted an ECF, and were told they are not qualified due to your payment plan or because they were late:

-Do nothing. You should be awarded credit in the coming months.

If you made any payments on a Direct loan, but have not completed an ECF:

It’s time to do that! Start with the PSLF Help Tool, and be sure you have your employer’s EIN number handy.

While we’re on the topic of PSLF, check out our interview with a recent physician PSLF recipient! We continue to add jobs to our jobs board at www.pslfjobs.com.

Finally… The end of the CARES Act payment and interest halt is less than four months away. Do you have your strategy in order before payments kick in at the end of January? Register for help from DWOQ and use the coupon code pslfjobs20 for a 20% discount.

About Author

Jason

Jason DiLorenzo is the Director and Founder of PSLFjobs, and the Founder of Doctors Without Quarters (DWOQ), a national student loan advisory and advocate for physicians who has managed over $2 billion in federal loan debt.

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