A lot has happened over the past two years, and as the emergency relief from federal student loan payments is scheduled to come to an end, you may be preparing to make student-loan payments; you can revisit our story from the Summer newsletter for ways to prepare. There are also things you can do to prepare yourself for loan forgiveness.
Student loan forgiveness has been a hot topic in the media the past two years. In reality, Federal Student Aid (FSA) and the Department of Education (ED) have been administering forgiveness under The Public Service Loan Forgiveness Program (PSLF) for several years, granting the first loan forgiveness in the fall of 2017.
The PSLF Program, established under the College Cost Reduction and Access Act of 2007, permits Direct Loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer to have the remainder of their loan balance forgiven.
If you have researched PSLF in the past and found you did not qualify, there is a new limited waiver that could make you eligible. Until October 31, 2022, if you are a federal student loan borrower, you can get credit for payments that previously did not qualify under PSLF or Temporary Expanded Public Service Loan Forgiveness (TEPSLF). Under this waiver, credit for past payments may be given even if payments were made:
- after the due date
- in the amount less than the amount due
- under a non-eligible payment plan
There are several things you can do to take advantage of the waiver before the limited PSLF waiver deadline, which is October 31, 2022:
1. Make sure you confirm your employer(s) are qualified
To be eligible for PSLF, you must work for a qualified employer; this is unchanged with the waiver. Columbia College is a qualified employer; you also want to check your past employers using the Federal Student Aid’s PSLF Tool, so you receive credit for years worked. The help tool will certify your employer, walk you through the qualifications for PSLF/ TEPSLF, and generate the form(s) you will need to complete and submit to be considered for qualification.
- To use the tool you will need to log in using your FSA ID.
- Have your employer information ready; the tool uses the Federal Employer Identification Number which is located on your W2.
2. Make sure you know your loan types and status
If you do not know your loan type or the status, you can review your aid summary at studentaid.gov/aid-summary/loans.
3. Take action to consolidate Loans, if needed
Only Direct Loans are eligible for PSLF. If you still have FFEL and Perkins Loans, you can only get credit for past payments if your loans are consolidated into Direct loans and your PSLF form is filed for prior employment by the waiver deadline. There are pros and cons to consolidation; after understanding all of your options, you may choose to consolidate.
4. Make sure you review waiver changes
With this limited PSLF waiver, payment counts now include any loan program, any payment plan, and any loan type, excluding parent plus loans. The FSA announcement https://studentaid.gov/announcements-events/pslf-limited-waiver explains how the waiver works.
5. Make sure you review what is not changing under the limited waiver
There are many PSLF requirements that remain unchanged by the limited waiver. Among them:
- Making 120 qualifying payments or the equivalent
- Being employed by government, 501(c)(3) not-for-profit, or other not-for-profit organization that provides a qualifying service
- Working full time
- Having Direct Loans or consolidating into Direct Consolidation Loans
- Certifying qualifying employment for the periods you seek credit toward PSLF