Don’t Miss Out On The Public Service Loan Forgiveness Waiver
It is estimated that nearly 3.5 million public servants could get $145 billion in student loan forgiveness if they consolidated and applied for the Public Service Loan Forgiveness (PSLF) waiver, which expires on October 31, 2022. Unfortunately, many people aren’t attempting to use this waiver because they simply aren’t aware of it and the extended rules that could deem them eligible for student loan forgiveness.
Meagan Landress, consultant at Student Loan Planner and Certified Student Loan Professional®, had a lot to say about this issue. “I have nightmares about people missing out on the PSLF waiver. The waiver is a limited-time offer, so folks only have until October 31st, 2022 to apply to have past ineligible payments for PSLF considered. This is a big deal because if someone doesn’t know about this and it’s applicable to them, they may miss out on getting their past payments to count now towards PSLF’s 120 payment threshold or even getting their whole balance forgiven!”
With the October 31st deadline looming, it’s important to understand whether or not you qualify and what steps you need to take to submit your information in time.
Who Qualifies For This Forgiveness?
To qualify, you must have federal loans owned by the Department of Education. Private student loans are not eligible. You must also currently be or previously have been employed full-time (as a W2 employee) by an eligible employer.
These qualifying employers can be any U.S. federal, state, local, or tribal government agency, which also includes employers such as the U.S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts. Eligible not-for-profit organizations include organizations that are tax-exempt under section 501(c)(3) of the Internal Revenue Code, and organizations that are not tax-exempt under section 501(c)(3) of the Internal Revenue Code, but that provide a qualifying service.
You can also visit the Department of Education’s PSLF Help Tool, which will help you determine if your current or past employer is considered a qualifying employer under the PSLF program.
While working full-time for an eligible employer, under the current waiver:
- Any repayment status after October 1st, 2007, of any payment amount, can count towards PSLF, regardless of what type of Department of Education loan and regardless of what repayment plan,
- Any deferment before 2013 can count towards PSLF (not in-school deferment, however),
- Any extended forbearances (12 months or more consecutive, or 36 months or more aggregate) can count towards PSLF.
There’s An Awareness And Access Problem
The main source of communication about the PSLF waiver from the Department of Education and the loan servicer has been via email. They use the email address on file, which if incorrect or not updated, creates a big problem for awareness. Plus, this limited-time waiver requires action on the borrower’s end, such as submitting applications and contacting former employers. This process also requires a computer to complete a consolidation application and generate the employment certification form, which many individuals might not have easy access to.
However, the Department of Education has created helpful resources that can guide you through the process.
How Can You Take Action Now?
Even though the deadline is coming up quickly, you can still take action to qualify under this waiver. As long as your employer has signed your forms by October 31st, you will be eligible under the waiver. Learn more to see what steps you need to take to have your form reviewed and hopefully approved.
To sign up for PSLF or update your payment count:
- First, confirm your employment start and end dates, if applicable (use MM/DD/YYYY format) for ALL eligible employers.
- Get your employer(s) employer identification number (EIN), which can be found on previous W2 forms, or you can confirm with your HR department.
- Complete the online PSLF Help Tool for your eligible employers.
- Print and take the auto-filled Employer Certification Form (ECF) to those employers for their signature.
- Mail or upload the signed form(s) to Mohela (the PSLF servicer).
Make sure to submit the ECF by October 31st, 2022 to lock in the benefits of the current PSLF Waiver.
According to Meagan Landress, if you’re not eligible for the forgiveness right now, to maintain PSLF eligibility going forward, you need to:
- Work full-time for a qualified employer
- Have federal Direct Loans
- Be on an income-driven repayment plan
- Make 120 qualifying payments
So, even if you don’t qualify for full forgiveness right now, you can still take steps to have your student loan debt forgiven in the future.