The U.S. Department of Education recently announced a temporary period during which borrowers may receive credit for payments that previously did not qualify for Public Sector Loan Forgiveness (PSLF).
The PSLF program forgives the remaining balance on direct loans after borrowers have made 120 qualifying payments under a qualifying repayment plan while working full-time for a U.S. federal, state, local or tribal government or a not-for-profit (501(c)3) organization. As a 501(c)3 institution, Vanderbilt University is an eligible employer, allowing employees to qualify for PSLF.
Recent changes to the PSLF program include the following:
- The PSLF program is limited only to borrowers with direct loans. However, under the waiver period, if borrowers consolidate their loans (including currently non-eligible loans) into direct loans and submit relevant PSLF documentation by Oct. 31, 2022, they would be eligible for the PSLF program.
- The consolidation of loans and submission of PSLF documents would allow previously ineligible payments to count toward the program, a benefit particularly useful for Federal Family Education Loan (FFEL) borrowers and Perkins Loan borrowers.
- Under the waiver, periods of repayment on loans before consolidation count, even if on a repayment plan that is not eligible under normal PSLF requirements.
- Under normal PSLF requirements, if an individual received Teacher Loan Forgiveness, the period of five years that led to eligibility for this program does not count under PSLF. However, with the waiver, this period can count toward PSLF if certification documentation is provided.
- Periods during the COVID-19 pandemic, where loan payments were paused by executive and congressional action, can count toward the accretion of credits toward the PSLF program. Even though payments were not made during this 26-month (and counting) period, credits can still be used toward PSLF.
Qualifying for PSLF
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) that provides a qualifying 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.
How do I apply?
You will need to submit the PSLF Certification and Application form, which will determine if you are making qualifying PSLF payments, and verify that your employer is eligible. Learn more about the PSLF program at Studentaid.gov. You also can review the PSLF FAQ page or contact FedLoan Servicing at 1-855-265-4038.
PSLF requirements that are waived
Here is a comparison of changes lasting until Oct. 31, 2022.
|Normal PSLF requirements||Changes until Oct. 31, 2022|
- Making 120 qualifying payments or the equivalent
- Being employed by government, 501(c)3 not-for-profit, or other not-for-profit organization that provides a qualifying service*
- Working full time
- Having Direct Loans or consolidating into Direct Consolidation Loans
- Certifying qualifying employment for the periods you seek credit toward PSLF
*Employment at a for-profit organization does not qualify.