On October 6, 2021, the U.S. Department of Education announced a temporary change to Public Service Loan Forgiveness (PSLF). Through October 31, 2022, borrowers will receive credit for past payments that would not otherwise have qualified for PSLF.
The goal is to allow borrowers with previously disqualified loan types, repayment plans, and payments to accumulate credit toward the 120 qualifying payments required to have their loan balances forgiven.
Why has this relief been made available? Well, to date, only 16,000 borrowers have received full loan forgiveness under the original PSLF program. However, the Department estimates 550,000 people who had previously consolidated loans could get some additional qualifying payment credit toward PSLF. This includes:
- 22,000 borrowers with loans totaling $1.74 billion who will be eligible to have their loans discharged with no further action taken.
- 27,000 borrowers with loans totaling $2.82 billion who may be eligible for loan forgiveness after filing PSLF Certification forms.
Already, thousands of borrowers have reported that their loans have been forgiven through the waiver.
Let’s look at the differences between the original PSLF program and this new Temporary Waiver.
Original PSLF Program | Temporary Waiver Opportunity |
| Borrowers who have Federal Family Education Loans (FFEL) or Perkins Loans were ineligible for forgiveness | FFEL and Perkins loans payments are now eligible and court toward the required 120 payments (though you will have to consolidate into a federal Direct Loan) |
| Payments in non-income driven repayment plans did not count toward the required 120 payments | Previous payments outside of income-driven repayment plans now count toward the required 120 payments. All repayment plans are eligible. |
| Previous late payments and partial payments were not credited toward the required 120 payments | Previous late payments and partial payments now count toward the required 120 payments |
| Borrowers who consolidated their federal student loans to qualify for PSLF would lose all previous payment credits toward the 120 qualifying payments | Payments made prior to consolidation will now count toward the required 120 payments |
| Borrower must be employed full-time by a qualifying employer at the time of forgiveness | Borrower does NOT have to be employed full-time by a qualifying employer at the time of forgiveness |
No changes have been made to qualifying employers or the total amount of payments needed (120) under the Temporary Waiver. Additionally, only payments made on or after October 1, 2007 while working full-time (30+ hours per week) will qualify.
For payments to count, your loan status must have been “In Repayment.” The Department does not intend to look at actual payment history for a borrower. Rather, you will receive credit for any month after October 2007 that you (1) had qualifying employment and (2) were in an “In Repayment” status. If you were in a deferment, non-COVID related forbearance or grace period, those payments will not count (unless you are Active Military). Suspended payments during the COVID Forbearance from March 13, 2020 through May 1, 2022 will count for everyone that meets other program requirements.
What to do now:
- Go to studentaid.gov/pslf, login with your Federal Student Aid ID (or create one) and make sure your contact information is up to date so the U.S. Department of Education can communicate directly with you.
- If you have a Direct Loan, have made 120 payments, and have applied for PSLF, you should receive automatic forgiveness soon.
- If you have a Direct Loan, have made 120 payments, and have NOT applied for PSLF, you need to apply for PSLF right away.
- If you have a FFEL or Perkins loan, you need to consolidate into a Direct Loan, then apply for PSLF.
AccessLex Institute provides up-to-date information on the status of PSLF and a number of free resources, including an online webinar series. Additionally, AccessConnex allows recent graduates to schedule a meeting with an Accredited Financial Counselor for unbiased information related to their specific financial situation. Counselors can discuss anything from budgeting/money management, loan forgiveness/repayment, or debt reduction to more in-depth topics related to financial planning (big ticket purchases) and retirement planning. You can register for a free account here.