The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
The biggest change announced by the Department of Education is that they will offer a limited waiver so that borrowers can have their payments counted, “regardless of loan type or repayment plan.” The Department estimates the waiver will bring over 550,000 borrowers an average of 23 payments closer to loan forgiveness and make 22,000 borrowers immediately entitled to the cancellation. This temporary waiver must be completed by October 31, 2022.
For more information:
Public Service Loan Forgiveness (PSLF)
PSLF Waiver Offers Way to Get Closer to Loan Forgiveness
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);
- 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.
Key Points: PSLF Summary of Changes
- For a limited time, you may receive credit for past periods of repayment on loans that would otherwise not qualify for PSLF.
- If you have FFEL, Perkins, or other federal student loans, you’ll need to consolidate your loans into a Direct Consolidation Loan to qualify for PSLF both in general and under the waiver. Before consolidating, make sure to check to see if you work for a qualifying employer.
- Past periods of repayment will now count regardless of whether you made a payment, made that payment on time, for the full amount due, on a qualifying repayment plan.
- Periods of deferment or forbearance, and periods of default, continue to not qualify.
Note: The qualifying employment requirement has not changed.
New Rules for Qualifying Payments
Under the new, temporary rules, any prior period of repayment will count as a qualifying payment, regardless of loan program, repayment plan, or whether the payment was made in full or on time. You continue to need qualifying employment.
This change will 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.