The Biden administration announced changes to PSLF (Public Service Loan Forgiveness), a major federal student loan forgiveness program that has been troubled by issues and poor acceptance rates since its inception.
The administration plans to ease major rules that previously limited PSLF eligibility to specific types of federal student loans and repayment programs.
Here’s a rundown of the PSLF’s recent adjustments, including who could be eligible and how to apply for relief.
All repayment options will qualify for loan forgiveness under the Public Service Loan Forgiveness Program (PSLF)
Payments paid under any repayment plan can now count as a qualified payment towards PSLF. The adjustments are retroactive to the establishment of the PSLF program in October 2007, but not before. As a result, payments made before October 2007 are still ineligible for PSLF.
Payments on Non-Direct Federal Student Loans, including, FFEL loans are now eligible for PSLF.
Payments on non-Direct federal student loans such as FFEL and Perkins loans will get included towards PSLF if the borrower was working in qualified PSLF employment at the time of the payments were made. Amount paid on private student loans and Parent PLUS loans before Direct loan consolidation will still be ineligible.
Payments made before direct loan consolidation may qualify for PSLF.
Amount paid before Direct loan consolidation will get counted towards PSLF. Historically, combining loans “reset the clock” on a borrower’s repayment period, including for PSLF reasons.
PSLF Changes for Military Personnel
The Department also announced revisions to the PSLF for military personnel. “Months spent on active duty will count toward PSLF, even if the service member’s loans were on deferment or forbearance rather than inactive repayment.”
PSLF reimbursements that declined due to the technical issue will restore.
The Department noted that “too many payments do not count toward PSLF due to technical limits regarding borrowers’ choice of the payment plan, duration, and amount of payment.”
How to Apply for Expanded PSLF Relief
The adjustments to the PSLF program are being referred to as a “Limited PSLF Waiver” by the Department. The relief can only get provided for a limited period: one year, with a deadline of October 31, 2022. Some of the comforts will be provided automatically by the Department.
Payments that refuse to owe to recognized technicalities will automatically be adjusted.
Borrowers should be satisfied that their job during the given period qualifies them for PSLF before combining.
Borrowers who already have all Direct-program federal loans must either apply for PSLF student loan forgiveness by October 31, 2022, or certify their job by that date to be eligible for PSLF waiver benefits.
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