Qualification

For the last month or so, the federal government and the Department of Education have been unclear as to what would be offered in terms of PSLF Forgiveness. Thankfully, The Department of Education has finally taken action.  Using the COVID Emergency Relief powers as a legal justification for what would otherwise require congressional approval, Direct Loan borrowers are being given a new PSLF Waiver that allows them to have additional months counted towards PSLF based on two things:

• The certification of these additional months by the individual’s employer
• Payment for those months, be they late, less than the full amount, under a previously ineligible plan or toward a previously ineligible loan type.

Recently, a limited-time amendment was made to the PSLF Program. From October 6, 2021, through October 31, 2022, any payments you have made on loans that would not previously qualify now do. With more uncertainty on the horizon, we urge you to take advantage of this waiver while it is available.

Decision

Under the limited PSLF waiver, your credit toward PSLF will include any repayments you have made to Federal Family Education Program loans (FFEL), Perkins loans, and most Direct loans. All payments you have made now qualify, even if you did not pay the total amount or pay it on time. 

To qualify, you will need to consolidate your loans into the Direct Loan Program before October 31, 2022 if you have any loans that are not Direct loans.

Under the previous rules, you would qualify for PSLF forgiveness on the remaining balance of your loan if:

1. You had a Direct Loan into which you made income-based payments
2. Had made 120 qualifying payments (meaning that payments had been made within 15 days of the due date)
3. And worked full-time (at least 30 hours a week) for a qualifying employer

Maintenance

The new PSLF Waiver has criteria that differ a bit from the previous iteration. As such, you should take a look at these updated criteria to make sure that you are eligible for the new PSLF waiver. If you are eligible, it may help you on the road to student loan forgiveness.

• Your student loans must be Direct Loans.  If you have FFEL or Perkins loans, those must be consolidated into a Direct loan before you can become eligible.
• Any of the current payment plans are eligible, not just the income-based plans
• Any payments can be counted, not just full and on-time payments; payments can be partial and received late, so long as an effort to pay has been made
• Applicants must be working 30 hours per week for a government or non-profit organization, and the time worked must be certified by the employer