New Public Student Loan Forgiveness program changes: what you need to know
PSLF is going to suck just a little less under new rules.
The Public Student Loan Forgiveness (PSLF) program has needed fixing for a long time. It’s a broken system, even for the few able to receive forgiveness in the end.
This is another reason we started Dolr. The relief systems that are in place for a select few are not working.
If you are signed up with Dolr, you’re already on the fastest path to $0 debt. You don’t have to worry about PSLF since we’re getting you extra cash for your student loans at no cost to you. 😊
If you have federal student loan debt and are interested in pursuing PSLF, there are a few changes to take note of.
The Department of Ed announced an overhaul of the PSLF program to help an estimated 550,000 teachers, nurses, social workers and other public service workers become eligible for student debt relief.
We’re going to summarize their plan and how you can take steps today to recover lost time and money should you decide to pursue PSLF.
You only have until October 31, 2022 to act on these changes.
The process is still difficult to navigate and given the complexity of the new changes, we expect more issues with this program down the line.
For now, we’ll do our best to summarize the new changes and the next steps you can take to act on them if you’re interested.
PSLF at a glance
The Public Student Loan Forgiveness (PSLF) program offers employees of U.S. federal, state, local, or tribal government or not-for-profit organizations the opportunity to have their federal student debt forgiven.
Typically to qualify for PSLF, you must
- be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service);
- work full-time for that agency or organization;
- have Direct Loans (or consolidate other federal student loans into a Direct Loan);
- repay your loans under an income-driven repayment plan*; and
- make 120 qualifying payments.
*This provision is being waived through October 31, 2022 as part of the new changes to the PSLF program. More on this below.
The hoops borrowers need to jump through to receive PSLF has been a source of contention since the inception of the program. Submitting applications each year, ensuring you’re on the right repayment plan, ensuring your loans are correctly consolidated, etc.
It’s a lot. The process has more obstacles to eligible borrowers than necessary.
Some borrowers planned their financial lives around having their loans forgiven and have faced rejections from these obstacles.
After years of complaints, The Department of Education has approved a temporary waiver of some key requirements for PSLF in an attempt to fix the errors of the past.
Key PSLF requirements are waived until October 31, 2022
For a limited period of time, borrowers may receive credit for past payments made on loans that would otherwise not qualify for PSLF.
Under the new rules, any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment. – StudentAid.gov
That leaves three requirements to receive loan forgiveness:
- Employed by government, 501(c)(3) not-for-profit, or other not-for-profit organization that provides a qualifying service
- Work full-time
- Have Direct Loans or consolidate into Direct Consolidation Loans
In a nutshell: if you verify your employment through the PSLF tool you should be able to take advantage of this waiver for your Direct Loans.
We cover the next steps to take advantage of this temporary waiver in detail below.
Next steps depend on your loan type
The changes apply to student loan borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by Oct. 31, 2022.
How to proceed next depends on your loan type. So the first step is to find out what kind of loan you have.
- Login to your Aid Summary on Studentaid.gov and scroll to the Loan Breakdown section
- Expand “View Loans”, then click the View Loan Details arrow to see the loan type:
a. “Direct”: Direct Loans
b. “FFEL”: Federal Family Education Loan Program
b. “Perkins”: Perkins Loans
d. Parent PLUS loans are not eligible under the limited PSLF waiver.
Now that you know what your loans are, here are the next steps based on your loan type.
| Loan Status | Borrowers With At Least One FFEL Program Loan, Federal Perkins Loan, or Certain Other Federal Student Loan | Direct Loan Borrowers Who Have Not Submitted an Employment Certification Form (ECF) or PSLF Form | Direct Loan Borrowers Who Have Already Submitted an ECF or PSLF Form |
|---|---|---|---|
| Who’s in This Group | You are part of this group if you have outstanding FFEL and/or Perkins loans, even if you also have outstanding Direct Loans. | You are a part of this group if you have only Direct Loans but are not assigned to FedLoan Servicing, or if you are assigned to FedLoan Servicing and have never submitted a form for the PSLF Program. | You are a part of this group if you have only Direct Loans and all of those loans are assigned to FedLoan Servicing. |
| How to Qualify | Consolidate your FFEL Program loans and Perkins Loans into a Direct Consolidation Loan by Oct. 31, 2022. After the consolidation is complete, you must then submit a PSLF form to your loan servicer. |
If you have not yet indicated that you are pursuing PSLF, now is the time to apply, because you can’t receive credit under these flexible rules unless you file a PSLF form by Oct. 31, 2022. | If you have not yet certified your employment previously or did not submit a form because your loans were not yet consolidated, file a PSLF form by Oct. 31, 2022. |
| Next Steps | Verify your loan types in your Aid Summary. Verify eligible employment by completing Step 1 of the PSLF Help Tool. If an employer is eligible and you have at least one loan that is not a Direct Loan, request a Direct Consolidation Loan by Oct. 31, 2022. Submit a PSLF form with the PSLF Help Tool by Oct. 31, 2022. |
Verify your loan types in your Aid Summary. Verify eligible employment and if eligible, submit a PSLF form with the PSLF Help Tool by Oct. 31, 2022. |
Verify your loan types in your Aid Summary. If you have unverified employment periods, verify eligible employment and if eligible, submit a PSLF form with the PSLF Help Tool by Oct. 31, 2022. |
Source: Studentaid.gov, Public Service Loan Forgiveness Limited Waiver Opportunity
We get it, this is still pretty tough to navigate. For now, start with the first step. Head into the PSLF tool and read the New Rules on PSLF. Contact your loan servicer or StudentAid.gov if you need help along the way.
These changes have by no means fixed this broken system. The Department of Ed must continue to overhaul this program for borrowers, so they can make good on the promises they have made to public servants.
Until then, we will keep working hard to find you more cash for your student loans, so you don’t have to worry about programs like these.
Keep accelerating to $0 student debt!
Keep up the good work. If you’re wondering where you can find additional sources of cash for your student loans, create a free account with Dolr. 😊
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