OAKLAND – California Attorney General Rob Bonta issued a consumer alert today highlighting important information regarding recent changes to the Public Service Loan Forgiveness (PSLF) program. On Oct. 6, 2021, the U.S. Department of Education (ED) announced that over the coming months, it will be implementing critical improvements to the PSLF program that should provide more eligible public servants with the student loan forgiveness that they deserve. As part of these improvements, ED has launched a limited-time Public Service Loan Forgiveness Limited Waiver Opportunity that will run through Oct. 31, 2022, allowing eligible borrowers to receive credit for past payments made on loans that would otherwise not qualify under the PSLF program. This move by ED to improve the PSLF program follows a recent comment letter, led by Attorney General Bonta, that urged ED to take robust action to fix the broken PSLF program. Below, Attorney General Bonta provides additional information regarding the newly established waiver, including eligibility, and steps borrowers can take in order to utilize the program.
“Many of our brave public servants have dedicated their lives to protecting our communities on the promise of the PSLF program, only to be denied the loan forgiveness that they are entitled to. Our teachers, nurses, first responders, service members, and many others have been required to serve at the forefront of the COVID-19 pandemic, yet they have repeatedly been let down by a failed system,” said Attorney General Bonta. “We are extremely pleased to see the Biden Administration’s progress on fixing the broken PSLF program and its commitment to making good on our nation’s promise to those who have devoted themselves to serving others. I encourage all public servants who hold federal student loan debt to take advantage of the new PSLF Limited Waiver Opportunity and pursue the loan forgiveness that you are entitled to.”
How to Check if Your Payments are Eligible Under the Limited PSLF Waiver
Under the temporary rules, any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment. This temporary change will apply to student loan borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by Oct. 31, 2022.
There are two requirements in order to receive additional qualifying payments:
- Full-time employment: You must have worked full-time for a qualifying employer when prior payments were made. If you were employed in more than one qualifying part-time job at the same time, you will be considered full-time if you worked a combined average of at least 30 hours per week. You can receive credit only for payments made after Oct. 1, 2007, since that is when the PSLF program began. If you haven’t already, you must file a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF form) for any period for which you may receive additional qualifying payments.
- Loan consolidation: If you have Federal Family Education Loan (FFEL) Program loans, Federal Perkins Loans, or other types of federal student loans that are not Direct Loans, you must consolidate those loans into the Direct Loan program by Oct. 31, 2022.
How to Utilize the Limited PSLF Waiver
- You have Direct Loans and you’ve already had some PSLF employment certified: If you’ve already applied for PSLF and had at least some employment certified, ED will award any additional payments without further action from you. If necessary, Federal Student Aid may contact you to ask you to certify additional months of employment. You should look out for an email from Federal Student Aid in the coming weeks to let you know how many additional payments they have preliminarily determined to be qualifying. You don’t need to do anything until you receive an updated payment count or other communication from ED.
- If you know that you have qualifying employment that you have not yet certified with ED, you should certify that employment now by using the PSLF Help Tool at www.StudentAid.gov/pslf.
- You currently have Direct Loans and have not yet applied for PSLF: You will need to submit a PSLF form so ED can review your loans under the new rules and determine whether your current or past employers qualify for PSLF. You can submit this form through the PSLF Help Tool at StudentAid.gov/PSLF. Be aware that ED expects an influx of applicants due to the recent announcement, so you may see some delays in having your application processed. You will need to submit your application by Oct. 31, 2022.
- You have at least one federal student loan that is not a Direct Loan, such as a FFEL loan: You will need to submit a consolidation application and a PSLF form by Oct. 31, 2022 to ensure that payments made on loans that are not Direct Loans can be counted toward PSLF. Right now, ED recommends that you consolidate before using the PSLF Help Tool to certify employment. If you want to check your employer’s eligibility for PSLF before you consolidate, you can do so by logging into the PSLF Help Tool, which is available at StudentAid.gov/PSLF. If you have a mix of FFEL and Direct Loans, please refer to the sections above to understand how your Direct Loans will be affected.
- Federal Student Aid is working to update the PSLF Help Tool, but it will not be configured for borrowers with non-Direct Loans to submit a PSLF form until later this year. They will provide more information when this update is done. To find out more about loan consolidation visit StudentAid.gov/Manage-Loans/Consolidation.
- You previously tried to certify employment for PSLF but were denied: If the Department previously said your employer was not eligible for PSLF then you need to submit a new form through the PSLF Help Tool to see if you can receive credit toward forgiveness. You can also see which employers the Department has already deemed eligible through the PSLF Help Tool. Please note that this waiver does not affect qualifying employer rules. Your employer still needs to be a governmental organization, a 501c(3) organization, or a not-for-profit organization that provides a designated public service to get PSLF under normal rules and the Limited PSLF Waiver.
- You don’t know what kind of federal loans you have: It’s very common for borrowers to not know what kind of federal loans they have. You can see what loans you have by logging into your account on StudentAid.gov, going to the My Aid page (StudentAid.gov/aid-summary/), and scrolling down to the Loan Breakdown section. There, you’ll see a list of each loan you have borrowed, even if you have paid the loan off or consolidated it into a new loan. Direct Loans begin with the word “Direct.” Federal Family Education Loans start with “FFEL,” and Perkins Loans include the word “Perkins” in the name.
Additional Improvements to PSLF:
In addition to launching the limited PSLF Waiver, ED also plans to make the following important changes to the PSLF program:
- Simplify rules that determine qualifying payments for PSLF;
- Eliminate barriers that prevent military service members from receiving PSLF;
- Automatically give service members and other federal employees credit toward PSLF using a data matching program;
- Review denied PSLF applications and identify and correct errors in PSLF processing;
- Improve outreach and communication with PSLF-eligible borrowers; and
- Simplify the PSLF application process.
You can find additional information and helpful tools regarding the PSLF Program at www.ed.gov. Additionally, you can find a fact sheet on ED’s updated PSLF program here.