What’s Changed and What Hasn’t with PSLF

November 5, 2021

Out of all the student loan forgiveness programs out there, Public Service Loan Forgiveness (PSLF) is the most generous by far. Unfortunately, many borrowers haven’t been able to take advantage of PSLF due to narrow and confusing guidelines around the type of work, loans, and payments accepted for the program.

Thanks to recently announced changes from the Department of Education, more borrowers are now eligible for PSLF and closer to having their debt forgiven. Although this expansion—which affects loan types, repayment plans, and qualifying payments—is exciting and much-needed, the changes will only last through October 31, 2022

Here’s a rundown of what’s changed and what hasn’t with this limited waiver to the PSLF rules.

Changes: Eligible Loan Types

Previously, only Direct Loans were eligible for PSLF. Now, other federal loans, such as FFEL loans (an old loan program that ended in 2010) and Perkins loans are eligible.

For borrowers with FFEL and/or Perkins loans, the first step toward forgiveness begins with consolidating those loans and submitting a PSLF form certifying your employment. (Certification is the process of verifying that you work or worked full-time for an employer that is eligible for PSLF.) Once that’s done, the Department of Education will count your previous payments on those old loans toward PSLF. Considering that you need to make 120 qualifying payments in order to have the remaining balance forgiveness, this is a pretty big deal. 

Borrowers who have already consolidated their FFEL and/or Perkins loans into the Direct Loan Program also benefit from the changes. Consolidation used to reset your payment count to zero, but these temporary changes will now count your pre-consolidation payments toward that magic 120 number. (This doesn’t apply to borrowers who refinanced their loans into private loans, unfortunately.)

If you’ve consolidated and have already certified your eligible employment for PSLF, the Department of Education says it will automatically update your payment count to reflect your prior payments. What if you consolidated but didn’t certify employment for the eligible jobs you had while you were paying your old loans? No worries! All you have to do is submit PSLF forms for those jobs in order to have those payments counted.

In all three situations, your employment will only be certified if you’re working—or worked—full-time for a qualifying employer (more on this later). And all paperwork must be submitted by the October 31st deadline; of course, the sooner you can tackle this, the better. If you have an account with Summer, you can use our online tools to both consolidate your loans and fill out the PSLF form. 

Changes: Repayment Plans

The waiver also loosens the restrictions on which repayment plans qualify for PSLF. Rather than only accepting payments made under income-driven repayment (IDR) plans, the department will now include any loan payments made by October 31, 2022 for borrowers who have certified employment. So if you’ve previously made payments under a standard, graduated, or extended repayment plan, those payments will now be counted.

If you’ve already certified your employment, there’s nothing for you to do here as the department is reviewing borrowers’ payment history on its own. If you haven’t, you have until October 31, 2022 to certify and benefit from these temporary changes. 

Changes: Qualifying Payments 

In the pre-waiver days, only payments made in full and no later than 15 days after the due date counted toward the 120 goal. Not anymore. If you’ve made late payments, partial payments, and/or overpayments, the department will count those payments toward PSLF. 

Again, if you’ve certified at least some employment, the department will automatically count the payments made during that period. Otherwise, you’ll have to submit the form by—you guessed it—October 31, 2022 for those payments to count.

No Changes: Employer Requirements

While these changes will allow many borrowers to become eligible for PSLF, one thing that isn’t changing is the program’s requirements for qualifying employers and full-time work. Borrowers still have to work full-time for a government agency, 501(c)(3) non-profit organization, or nonprofit that provides approved public services (excluding partisan groups and labor unions) in order for their payments to count toward the 120 figure. You can read more about PSLF’s employer requirements on our blog.

The Road Ahead

If any of these changes have made you eligible for PSLF, we recommend taking action as soon as possible. Remember: this expansion is temporary and ends on October 31, 2022. Also, save records of your payments and submitted PSLF forms just in case the Department of Education misses something. 

The department will make more announcements regarding the PSLF waiver as well as streamlined updates to the application process in the weeks and months ahead. Bookmark our blog to stay up to date on any PSLF news, including if the Department of Education decides to make additional changes or make the waiver permanent. If you have any questions about the program in the meantime, email us at hello@meetsummer.org and one of our experts will be happy to help you.

Want your  employer to offer Summer as a benefit? If so, refer us to your HR or benefits team. Email us with details at hello@meetsummer.org, and we’ll take it from there.

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