Federal loan payment pause includes PSLF borrowers
Payments on federal student loans for borrowers seeking PSLF are deferred until October 2023, when student loan obligations recommence. Interest began accruing again on Sept. 1. The months of nonpayment during the payment pause will be applied toward the 120 payments required to be eligible for PSLF, provided that you are still employed full-time by an eligible employer.
Put differently, even if you haven’t made a payment since March 2020 and won’t until October 2023, you will still be more than three years away from being forgiven.
One-time automatic account adjustment for PSLF borrowers
Regardless of the payment plan you’ve been on, any payments made toward your federal loans while working a qualifying PSLF job during or after October 2007 will count toward PSLF under the one-time IDR account adjustment. Previously, only payments made on certain repayment plans would qualify. PSLF will now also take into account any prior payments that were declined due to late consideration.
For all Direct Loans that qualify for PSLF, including consolidated and unconsolidated parent PLUS loans, the account adjustment will be made automatically. PSLF borrowers with Federal Family Education Loan Program (FFELP) loans, whether held by the federal government or the private sector, may also be eligible for a recount; however, they will need to combine their loans by the end of 2023. Dont delay, because the consolidation process can take time.
Borrowers are advised by the Consumer Financial Protection Bureau to file a complaint if they are attempting to obtain relief through account adjustments and are not getting the assistance they require from their servicer. Additionally, the government’s PSLF Help Tool can assist you in tracking your progress toward forgiveness and certifying employment periods.
Who qualifies for the PSLF account adjustment?
For borrowers who meet PSLF requirements, the following loans are eligible for the one-time account adjustment:
- Direct Loans, including those that have consolidated into one by the end of 2023 and those that have already done so
- Grad and parent PLUS loans, either consolidated or unconsolidated. It doesn’t matter if the student or another parent has a qualifying job; the parent who first took out the parent PLUS loan must work in a public service capacity in order for parent PLUS loans to qualify.
Some federal loans are not Direct Loans. By the end of 2023, for example, you will need to combine your commercially held FFELP or Perkins loans into a Direct consolidation loan. Next, before the year ends, you must confirm that you are employed by an eligible company and file a PSLF form.
If you currently have direct loans, consolidating is not necessary. Instead, all you have to do is confirm that you are employed by a program-eligible company and, before the end of 2023, submit a PSLF form via your loan servicer.
In the spring of 2023, you will begin to notice the account adjustment if the recount places you at 120 payments. All other eligible borrowers will see the adjustment in 2024.
Find the latest
Reconsideration for PSLF applications
Beginning April 2022, borrowers whose applications were rejected for PSLF in the past can request a reconsideration online at studentaid.gov. Anyone who thinks their application should be reconsidered can submit a request.
To confirm employment or payment decisions, you will be able to submit one or more requests for your application to be reconsidered. No additional documentation is required with your request; however, after it has been reviewed, additional information may be required. There was no deadline provided.
The law still requires you to meet employment and payment requirements, including the current waiver that counts payments that were previously ineligible.
To figure out if you need a reconsideration of your employer, you can use the PSLF Help Tool. If your employer isn’t eligible, consider supplying documentation as to why the not-for-profit organization you work for should qualify.
The Federal Student Aid office did not indicate how long it would take to review each submission. Make sure your studentaid.gov account has the most up-to-date contact information so you can receive correspondence. More information about reconsideration of payment counts and employer qualifications are available on the federal student aid website.
Are PSLF applicants still eligible for Biden’s cancellation?
President Biden unveiled a proposal in August 2022 to forgive up to $20,000 in federal student loan debt for each borrower. But on June 30, 2023, the Supreme Court closed this plan after considering two significant student loan cases and ruling that the plan was illegal. PSLF applicants shouldn’t anticipate further relief from Biden’s student debt relief plan, even though he is actively pursuing a plan B for student debt cancellation.
Who’s gotten PSLF so far?
The Department of Education reported in November 2022 that 359,790 borrowers were eligible for forgiveness under the one-year waiver of payment rules that ended on October 31. Most have seen their balances discharged already.
For borrowers whose loans were discharged or are scheduled to be discharged, the average balance is roughly $67,000.
As of October, only approximately 12,527 borrowers had had their discharges handled via the conventional PSLF procedure. 31, according to education department data.
» READ: How I Got My Loans Forgiven Through PSLF
How to get Public Service Loan Forgiveness
PSLF is only available for loans that are a part of the federal direct loan program. Private student loans aren’t eligible.
To qualify for PSLF, you can combine other federal student loan programs, such as Federal Family Education Loans or Perkins Loans.
Don’t consolidate your Perkins loans if you are eligible for Perkins loan cancellation, which offers forgiveness following five years of public service. With your remaining federal student loans, you are still able to take part in PSLF.
Work full time for a qualifying employer
The program’s eligibility is based more on your employer than it does on the kind of work you do. Qualifying employers can include:
- Government organizations at any level.
- 501(c)(3) nonprofits.
- AmeriCorps or the Peace Corps.
- Nonprofits whose main goal is to deliver a qualifying public service but do not hold 501(c)(3) status
- Religious organizations.
Complete an employment certification form to confirm that your employer qualifies. Send the form to MOHELA Servicing, the contractor that currently oversees PSLF for the department. When the form is processed, your loans will be transferred to MOHELA to be serviced going forward.
Make sure you’re on track for forgiveness by submitting a fresh form every year or whenever you change jobs. Although it’s not necessary, it’s a good idea to submit the form annually for your records. When you’re qualified, you can also apply for forgiveness and have your employment certified retroactively.
You must put in at least 30 hours a week of full-time work for your qualifying employer. You may still be qualified if you work two qualifying employers part-time and put in at least 30 hours a week on average.
Switch to income-driven repayment
Your payments must be made on the regular 10-year plan or one of the four income-driven repayment plans if the waivers are not granted.
If you follow an income-driven plan and make all of the required payments, you will save the most money. By the time you’ve made enough payments to be eligible for PSLF, you will have paid off the debt if you follow the normal plan.
While payments made under the current one-time account adjustment do not normally count toward PSLF, they do under the graduated or extended federal repayment plans.
Make 10 years’ worth of payments
You must make 120 monthly loan payments. These payments must be made:
- For the full amount due.
- On time, meaning within 15 days of your due date.
- On or after Oct. 1, 2007.
- while you’re employed full-time by a recognized company and participating in a recognized repayment plan
If you make payments during a grace period, in deferment or forbearance, while enrolled in school, or if your loans are past due or in default, they are not considered considered.
The payments do not need to be consecutive. For instance, you could start making qualifying payments, pause them through forbearance, and then pick up where you left off when you resume repayment.
Additionally, you have the option to switch employment, working for both qualifying and non-qualifying employers. However, payments are only deducted from your PSLF when you work for an eligible employer.
Beginning in July 2023, early or lump-sum payments will be included in determining the 120 required for forgiveness. Up until the date of your yearly recertification, you can repeat this process more than once. For instance, if you paid $500 toward your $100 monthly bill, that would apply to your next five payments.
Apply to forgiveness
After fulfilling all prerequisites, proceed to submit the application for Public Service Loan Forgiveness. You have two options for doing this: submit an online application via the Education Department or mail a paper application to MOHELA, the student loan servicer. When you apply, you must be employed full-time by a qualified company. The Education Department advises that you fill out the form every year and whenever you change jobs.
You must submit an employment certification form for each employer you had while making the 120 payments, in addition to the application, for your current employer. For your current employer, you only need to submit one of these forms if you have been filling them out on a regular basis.
MOHELA will notify you when it receives your paperwork. You don’t have to pay back the loan while your application is being processed.
Don’t qualify for PSLF? You have other options
Youre not alone if you dont meet PSLFs strict requirements. You also have other options:
- Explore other paths to forgiveness. While it is one of the most well-liked federal student loan forgiveness programs, PSLF is not the only one. However, watch out for loan forgiveness scams.
- Stay on income-driven repayment. Depending on the plan, your remaining balance will be forgiven after 20 or 25 years for all four income-driven plans. However, unlike with PSLF, the forgiven amount may be taxable.
- Consider refinancing. Refinancing your student loans can help you save money and pay off your debt more quickly by reducing your interest rate. However, federal loans that have been refinanced are no longer qualified for income-driven repayment plans or forgiveness programs. You need stable finances and good credit to qualify.
FAQ
What are the new rules for PSLF 2023?
Furthermore, starting in the fall of 2023, all PSLF borrowers with a PSLF form that has been approved will start to see the payment count adjustment applied to their PSLF counts. Consolidating at any point between January 2023 and April 30, 2024 will grant you credit for the same PSLF periods that you are currently eligible for.
Has anyone been forgiven for public service loan forgiveness?
About 662,000 borrowers have been eligible for forgiveness under the limited PSLF waiver as of mid-July 2023. Some borrowers who submitted their applications before the deadline may still be able to have their applications processed from the waiver period even though the limited PSLF waiver period has ended.
How much can be forgiven under PSLF?
After making 120 qualifying monthly payments, qualified borrowers who work full-time for nonprofit organizations or federal, state, local, or tribal governments may be eligible for loan forgiveness under the PSLF. Your federal direct student loan balance will be canceled once the required payments have been made.
Read More :
https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service
https://www.nerdwallet.com/article/loans/student-loans/public-service-loan-forgiveness