The deadline is fast approaching for teachers, first responders, firefighters, government employees and other public servants to file applications for limited waiver of public service loan forgiveness.
Eligible civil servants who have held an eligible position for 10 years or more may receive full loan forgiveness through the PSLF. A temporary waiver with extended benefits was introduced in October 2021 and extended in April 2022, making the forgiveness more accessible to millions of borrowers. The waiver includes more loan types and repayment plans that were previously excluded from the PSLF program. Borrowers with forbearance loans can also apply.
If you haven’t started your PSLF limited waiver application yet, the steps you need to take now don’t take as long as you might think. And, you don’t have to completely complete the process to meet the deadline. Instead, you must complete the application through the PSLF Help Tool portal by the end of the month. If you hold FFEL, Perkins, or other types of qualifying federal loans, you will need to apply to consolidate them into direct loans and complete the PSLF application before 8:59 p.m. PT (11:59 p.m. ET) October 31.
Here’s everything you need to know about applying for PSLF temporary relief, how to apply for and consolidate your loans, and what this week’s announcement about the future of the PSLF program means for you. To find out more, hereand if you are eligible for the PSLF program.
What is the PSLF program? Who can apply?
The PSLF program, first launched in 2007, was designed to help civil servants repay their loans faster.
The program works by providing loan forgiveness to eligible government officials who have made 120 eligible student loan payments. Yet before the program expanded last October, the approval rate was horrendous: nearly 99% of borrowers who had applied since 2008 were turned down.
To qualify for the PSLF, you must be employed full-time by a U.S. federal, state, local, or tribal government agency—this includes the military—or nonprofit organization. You must have Federal Direct Loans or other types of federally guaranteed loans that have already been consolidated into Direct Loans and you must make 120 qualifying payments or 10 years of payments. Examples of eligible borrowers for the PSLF are workers like teachers, nurses, and firefighters who serve their local communities.
Am I entitled to a loan forgiveness under the PSLF extended exemption?
The waiver only applies to federal loans, which make up the vast majority, more than 90%, of total student loan debt. Borrowers in government jobs may be able to receive forgiveness for FFEL, federally guaranteed loans from private lenders, Perkins loans, and other non-standard or non-targeted repayment plans. income for federal loans under the expanded waiver (see below).
Borrowers can also receive credit for past payments and periods of employment, such as active military service, for which they would not have qualified in the past.
The easiest way to determine if you qualify is to apply for the Limited Waiver.
What are the permanent changes to the PSLF program?
The Department for Education on Tuesday announced permanent changes to the Civil Service Loan Forgiveness Scheme, with the aim of extending student loan relief to more eligible borrowers. The permanent changes will take effect on July 1, 2023.
All payments made by eligible staff under income-tested repayment plans will receive credit for the entire period that their loans have been repaid, even if they have made late or partial payments, and regardless of the type of repayment plan.
Forgiveness credit will also be provided for:
- Any month in which the loans were in an eligible state of repayment, deferment, or forbearance prior to consolidation;
- Month a borrower’s account was in at least 12 consecutive months of forbearance;
- Months in which a borrower’s account has been in forbearance for at least 36 cumulative months in forbearance
- Any month spent in deferment (except school deferment) before 2013.
Most borrowers will not need to do any legwork to receive the above benefits. Their accounts will be automatically adjusted.
However, if you have ineligible loans – any federal loan that is not a direct loan or a federally managed FFEL loan – you will first need to consolidate your loans into a direct loan. You will then receive a credit for your previous repayment period.
For example, if you made six years of payments on a loan before consolidating it into a direct loan, those six years of payments would be applied to your account.
How to apply for the PSLF temporary waiver?
The Ministry of Education has a dedicated tool to guide your request for a limited waiver. The deadline to apply for the waiver is 11:59 p.m. ET on October 31, 2022, but the sooner you apply, the better. Some borrowers may not have to do anything to have their loan cancelled, but it’s a good idea to confirm your specific details.
If you have FFEL or Perkins loans, you will need to consolidate them into direct loans before applying for the PSLF waiver. As long as you complete the consolidation application and applying PSLF before the deadline, you can benefit from the extended waiver – even if your consolidation still takes several weeks.
You can consolidate eligible federal student loans into a direct loan online at the Federal Student Aid website. You can find the consolidation application here. By consolidating into a single direct loan and then applying for the expanded PSLF waiver, your past payments can now count for loan forgiveness, as long as you are in eligible government employment.
Am I eligible for the Biden loan forgiveness and PSLF forgiveness?
Anyone with an eligible federal student loan from the Department of Education who earned less than $125,000 in 2020 or 2021 ($250,000 for married couples filing taxes jointly) is eligible for loan forgiveness of up to up to $10,000. If you received a Pell Grant, you are eligible for loan forgiveness of up to $20,000. This includes anyone eligible for public service loan forgiveness.
Because PSLF borrowers follow income-driven repayment plans, Biden’s loan forgiveness may be applied automatically, according to Federal Student Aid. This is separate from the PSLF’s expanded waiver application, which provides full loan forgiveness to a greater number of public service borrowers.
How does the student loan payment suspension affect my eligibility for the PSLF?
Federal student loan repayments have been on pause for more than two years and have just been extended to resume after. Under the PSLF, each such suspended payment counts as an eligible loan payment during that period. So if your payments were suspended for 26 months, that counts as 26 payments on time, bringing you closer to your goal of 120.
What if I didn’t receive credit for past payments?
In the past, if you made payments but your loan officer had incomplete or inaccurate records, you had almost no recourse to counter their claims. Now, with the limited waiver and the announcement of permanent fixes to the program, you can request a forgiveness and have your previous payments count towards your debt and forgiveness.
Correction, January 25: This article previously stated that private loans would be eligible for student loan forgiveness under the new waiver. It was wrong. In addition to direct loans, only FFEL loans – which are federally backed, but often issued by private lenders – Perkins loans and other federal loans are eligible for the PSLF exemption.