PSLF: An Unforgiving Forgiveness Program

February 19, 2019

Created by Congress in 2007, the PSLF program promises the forgiveness of any remaining loan debt owed after a borrower makes 120 qualifying monthly payments (e.g. 10 years) while working for a government or non-profit employer. In other words, if you’re a public school teacher in a 20-year loan repayment plan, all remaining debt is wiped out halfway through. Poof. Gone! Sounds pretty straightforward, right? Unfortunately, the devil is in the details.

According to government estimates, one in four Americans works for a public service employer that would qualify them for PSLF. On that basis, it’s likely that approximately 11 million of the 44 million existing student loan borrowers could have a shot at forgiveness.

Since the first set of eligible borrowers reached their 10-year forgiveness mark in 2017, however, only 28,000 borrowers have submitted applications for PSLF––far short of projections. Even more startling is the fact that the government has forgiven loans for only 98 borrowers. Yes, you read that correctly: 98 borrowers.

This cannot be the outcome Congress had envisioned for PSLF, so what’s going on here?

Addressing the Lack of Public Awareness

The overall lack of public awareness is largely attributed to the government’s failure to properly inform borrowers about PSLF. Little effort was put into promoting the program when it was first passed into law. If you weren’t among the lucky few who read about PSLF in the news when it was created in 2007, it’s quite possible you would have had no idea to apply.

Even now in 2019, the PSLF program remains largely unknown to many student loan borrowers––though there has been progress. Approximately 800,000 people have submitted PSLF certification forms since 2007––the step before officially applying. However, that number represents less than 10% of those who are likely eligible for PSLF.

There are many smart ways to improve the low number of applicants. The government could require every public service employer to provide the PSLF certification form, along with the W-2 form, during the onboarding process for all new employees. Or public service employers could voluntarily opt to provide their employees with the certification form along with a process to re-certify them for each year of employment.

Not only is this clearly better for employees, it is also better for employers. It’s not hard to imagine that employers could leverage the PSLF program as a recruitment and retention tool to attract highly-educated talent (read: large student debt loads) to their organization who might otherwise be tempted to apply for higher-paying jobs in the private sector.

Increasing the Application Rate for PSLF

Even if you were lucky enough to find out about PSLF early on, there was no shortage of hurdles you had to jump through to meet a strict set of conditions. The U.S. Department of Education recently reported that 99 percent of rejected applicants in the pool of 28,000 were denied for “not meeting program requirements.”

In 2010, the government switched from issuing what were known as “FFEL loans” to “Direct loans.” Only Direct loans are eligible to be forgiven under PSLF. If you enrolled in the early years of the program, it’s likely you had at least some FFEL loans. If you weren’t told to “consolidate” (e.g. convert) your FFEL loans into Direct loans (hint: many weren’t), you lost precious years to put towards your 10-year count. Even now, many borrowers remain unaware of their loan type and struggle to thread the needle through the strict set of conditions required for forgiveness.

Selecting the right repayment plan for your loans is yet another PSLF requirement that creates heartburn for borrowers. In what seems like a cruel trick on unsuspecting college grads, you are permitted to certify for PSLF in a 10-year standard plan, which is the default repayment option for borrowers. However, since your loans are only forgiven after a minimum of 10 straight years of loan payments, being in a 10-year standard plan ensures you’ll have paid off every last loan––leaving you without a cent of forgiveness.

Worse yet, a number of borrowers who certified for PSLF were enrolled in graduated and extended repayment plans, left only to find out later that these plans did not qualify for forgiveness. Thankfully, Congress intervened last year and created a special program to help these borrowers––however, confidence in the program was significantly damaged in its wake.

What's a Borrower to do?

Despite the doom and gloom, another reason for the low number of forgiven loans is that the Department of Education has been very slow to process applications. As the Department implements a more standardized review process, we firmly believe there will be a steady uptick in the number of loans forgiven this year and beyond.

With that in mind, let’s repeat what we said in the first sentence: Public Service Loan Forgiveness is the most generous government forgiveness program. Some of the borrowers who received forgiveness saved well over $100,000, and at least one received $170,000 in forgiveness. The average borrower saved $56,326. Either way, that’s a lot of money. If you play your cards right and closely adhere to the program requirements, then you could do the same.

In short, if you have a hefty sum of federal student loans and you’re working for a government or non-profit employer, we recommend submitting a certification form for PSLF.

  • Even if you’re not sure you’re going to continue to work in public service for the long haul, you have nothing to lose by submitting a form in the chance that you do. Let’s face it––no one can predict the future, but you’ll be kicking yourself years from now if you passed up the opportunity and could have benefitted from PSLF.
  • Be sure to check that you have Direct loans by logging into, and we highly recommend enrolling in an Income-Driven Repayment plan to maximize your forgiveness dollars.
  • It’s a good habit to submit a new certification form every year so you can make sure you’re staying on track, and always submit a certification for each new employer along the way.

If you have any questions about the certification process or PSLF more generally, you can always write us at Service Loan Forgiveness (PSLF) is at once the most generous government forgiveness program for student loan borrowers and yet also the most contentious.

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