What You Need to Know About the PSLF Limited Waiver Opportunity

Great news for public service employees! On Oct. 6, 2021, the U.S. Department of Education (ED) announced a change to Public Service Loan Forgiveness (PSLF) program rules for a limited time. Through 10/31/2022 borrowers may receive credit for past payments made that would not otherwise qualify for PSLF. That means if you’ve previously been denied PSLF, you may be eligible under the temporary waiver.

The PSLF waiver addresses two major causes of rejection.

Ineligible Payments
With the new rules, past payments made on federal student loans under any repayment plan count as qualifying. These previously ineligible loan payments can be recounted toward 120 total payments need for PSLF. Even partial loan payments or late loan payments can be counted through 10/31/2022.

Ineligible federal student loans such as FFEL or Perkins Loans
With the new rules, payments made on federal student loans that weren’t Direct loans can now be counted. You will need to consolidate FFEL & Perkins Loans to a Direct Consolidation Loan by Oct. 31, 2022.

Some rules haven’t changed.

You must still have worked at least 120 months or 10 years for in qualifying employment. You must still have federal student loans. Private loans are never eligible for PSLF. The PSLF program rules haven’t changed in the long term. That means if you expect to get PSLF after 10/31/2022 you will need to be enrolled in an income-driven repayment plan and make payments on Direct Loans.

Don’t miss the 10/31/2022 deadline.

For now these updates are part of a limited waiver opportunity. If you fail to act before the opportunity expires you will not be able to take advantage of these rules. Long term changes to the PSLF program have been proposed however they have not been decided or passed at this time. Don’t jeopardize your loan forgiveness by waiting to get credit for your public service work.

Steps to take if you have FFEL or Perkins Loans.

Step 1: Apply for a Direct Consolidation Loan
https://studentaid.gov/app/launchConsolidation.action Be sure to carefully assess Perkins Loans for cancellation benefits before consolidation. Consolidation removes any Perkins Cancellation benefits.

Step 2: Fill out & submit a PSLF form after consolidation is complete
After consolidation is complete, submit a PSLF form https://studentaid.gov/sites/default/files/public-service-application-for-forgiveness.pdf

Steps to take if you have Direct Loans but have never filled out a PSLF form.

Step 1: Fill out a PSLF form for all past employers since 10/1/2007.

Make sure you get credit for your full duration of employment since 10/1/2007 (the first time you could make a qualifying payment toward PSLF). You can’t receive credit under the PSLF waiver unless you file a PSLF form by Oct. 31, 2022. On the form, check the first box “I just want to find out how many qualifying payments I have made or if my employer is a qualified employer. ” If you’ve worked for <10 years in public service. Check the second box “I just want to find out how many qualifying payments I have made or if my employer is a qualified employer.” if you’ve worked 10 or more years in public service while making student loan payments.

What to do if you have Direct Loans and have already filled out a PSLF form.

If you have submitted forms for all your eligible employment, you may automatically receive credit for prior payments under the following conditions: wrong federal loan type, wrong repayment plan, made the payment late, or did not pay the full amount due.
You should submit a new PSLF form if you’ve worked 10 years and should get credit for 120 payments today. You should submit a PSLF form if you don’t have all past employment certified. Automatic updates are likely to take months and won’t count periods of non-federal employment that haven’t been certified.

How long will it take to get credit for my payments under the PSLF waiver?

It’s likely that automatic updates will take several months. If you believe you qualify today, you may opt to have your loans put in forbearance while you wait for your PSLF form to be evaluated. Direct Loans are still in forbearance through 8/31/2022 so no payments will be due until after that time.

What if I’ve been paying on my loans for more than 10 years?

If you’ve never gotten loan forgiveness under PSLF before and have made >120 payments on your Direct Loans when your loan forgiveness is approved, you will get a refund for the payments over 120. If you’ve received loan forgiveness prior to 10/6/2021, or if you have FFEL loans you will not be refunded any overpayment that happened because of the PSLF waiver.

What if I’m no longer working at a qualifying employer?

If you made at least 120 months of federal student loan payments while working at a qualifying employer, you are eligible to receive PSLF even if you’re currently working somewhere else. It’s important you take advantage of this before 10/31/2022.

Additional Resources

PSLF Form

Direct Consolidation Loan Application

Federal Student Aid PSLF Limited Waiver Opportunity Announcement

Coach Q&A: Public Service Loan Forgiveness Pitfalls