Public Service Loan Forgiveness: What It Is, How It Works

PSLF discharges any remaining federal student loan balance after borrowers make 10 years' worth of payments.
Public Service Loan Forgiveness

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Public Service Loan Forgiveness is a federal program designed to encourage students to enter relatively low-paying careers like firefighting, teaching, government, nursing, public interest law, the military and religious work.

You must make 10 years’ worth of payments, for a total of 120 payments, while working for the government or a nonprofit before qualifying for tax-free forgiveness.

You can use the PSLF Help Tool on the federal student aid website to find out your eligibility based on the types of loans you have and your employer.

Public Service Loan Forgiveness has undergone temporary changes in the face of the COVID-19 pandemic.

  • First, all federal student loans were put into forbearance with no payments due through Dec. 31, 2022.

  • Second, the Education Department has issued a limited waiver through October 2022 of sometimes-onerous provisions for PSLF qualification.

The waivers for PSLF qualification mean that a broader range of past payments on federal loans will count toward forgiveness, as long as you were working for a qualified employer at the time.

You’ll find details on both those programs below.

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Federal loan payment forbearance

Federal student loan borrowers seeking PSLF don't need to make payments until the extended automatic forbearance expires on Dec. 31, 2022. As long as you're still working full-time for an eligible employer, those months of nonpayments will count toward the 120 payments needed to qualify for PSLF.

In other words, if you have not made payments since March 2020 and won't make another until December 2022, you are still 33 months closer to forgiveness.

Limited waivers for PSLF applicants

Under the limited waiver, any payments made toward your federal loans, regardless of the payment plan you’ve been on, will count toward PSLF. Previously, only payments made on certain repayment plans would qualify.

If you made payments in the past that were rejected because they weren’t considered on time, those will now count toward PSLF.

Any payments made on Federal Family Education Loan (FFEL) or Perkins loans after 2007 will retroactively count toward PSLF. Previously, payments on these loans were not counted toward PSLF.

If you have consolidated your non-direct loans prior to the limited waiver period, the payments made prior to consolidation will also count toward PSLF.

For members of the military, any time spent in active duty will count toward PSLF, regardless of whether loan payments were paused or not during that time.

If you have applied to PSLF in the past and been denied, the Education Department said that it will be reviewing rejected applications. The Department will also be reaching out to borrowers who can now receive forgiveness under PSLF but haven’t applied to make sure they’re aware of the temporary rule changes.

If you're seeking relief via the waiver and are not receiving the help you need from your servicer, the Consumer Financial Protection Bureau instructs borrowers to make a complaint.

Qualifying for PSLF under limited waiver programs

The limited waiver applies to borrowers with direct loans, those who have already consolidated into a direct loan, and those who consolidate into a direct loan by Oct. 31, 2022.

While grad PLUS loans are included under the limited waiver, parent PLUS loans are not.

Some federal loans are not direct loans. If you have FFEL or Perkins loans, for instance, you will need to consolidate your loans into a direct consolidation loan before October 31, 2022. You will then need to verify that you work for an eligible employer and submit a PSLF form — also before Dec. 31, 2022. You can technically submit a combined PSLF/Employer Certification Form prior to consolidating, but you must consolidate in order to get forgiveness.

If you already hold direct loans, there is no need to consolidate. Rather, you just need to verify you work for an employer eligible for the program and then submit a PSLF form through your loan servicer before Oct. 31, 2022.

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Reconsideration for PSLF applications

Beginning April 2022, borrowers whose applications were rejected for PSLF and Temporary Expanded PSLF can request a reconsideration online at studentaid.gov. Anyone who thinks their application should be reconsidered can submit a request.

You'll be able to submit one or more reconsideration requests of your application to certify employment or payment determinations. You won't need to provide more documentation with your request, but you might have to provide more information following its review. There was no deadline provided.

You still must meet payment and employment requirements under the law, which includes the current waiver that would count previously ineligible payments.

To figure out if you need a reconsideration of your employer, you can use the PSLF Help Tool. If your employer isn’t eligible, consider supplying documentation as to why the not-for-profit organization you work for should qualify.

Federal Student Aid did not indicate how long it would take to review each submission. Make sure your studentaid.gov account has the most up-to-date contact information so you can receive correspondence. More information about reconsideration of payment counts and employer qualifications are available on the student aid site.

Are PSLF applicants still eligible for Biden's cancellation?

President Biden announced a plan to cancel up to $20,000 in student loan debt for federal borrowers.

Borrowers with qualifying loans who are seeking PSLF can still qualify for Biden's debt relief.

PSLF borrowers who are already enrolled in an income-driven repayment plan are likely to be among those who receive cancellation automatically since the Department of Education already has their income information.

Borrowers who are likely to receive Biden’s cancellation automatically may also choose to opt out if they're concerned about, for example, state tax implications. Any borrowers who are pursuing PSLF and won’t receive it automatically will need to apply.

Who's gotten PSLF so far?

Public Service Loan Forgiveness began in 2007, meaning the first batch of borrowers became eligible for relief in 2017. A total of $10 billion has been erased for 175,000 borrowers so far.

The approval rate is low, but improving. Among all 1,299,286 combined applications for PSLF and TEPSLF submitted from November 9, 2020 onward, only 130,728 (for PSLF, TEPSF and the PSLF waiver) have been deemed eligible for forgiveness, according to April 2022 data from the Department of Education. That means only 10.1% of all applications have been approved. However, this is still an improvement: From November 2020 through October 2021, only 2.4% of combined applications had been approved.

Borrowers get nearly six figure debt erased, on average. The average balance of borrowers whose loans were discharged under PSLF was $67,592.

IDR forgiveness fixes are here. Millions of borrowers are will benefit from one-time fixes that count past payments toward the 240 or 300 needed to qualify for income driven repayment forgiveness, the Department of Education announced on April 19. The fixes are also expected to cancel debt for at least 40,000 borrowers through Public Service Loan Forgiveness. So far more than 128,000 borrowers have had their debt discharged by the waiver and collectively had $8 billion in debt erased.

How to get Public Service Loan Forgiveness

Although the waivers are limited, the Education Department said that it is looking to make these changes to PSLF permanent. Nonetheless, even if the department does take that step, many of the current requirements will remain in place. And in addition, parent PLUS borrowers looking to qualify for forgiveness under PSLF will need to follow the current qualifications.

Have the correct type of loans, or consolidate

Only loans that are part of the federal direct loan program are eligible for PSLF. Private student loans aren’t eligible.

You can consolidate other types of federal student loans — Federal Family Education Loan loans or Perkins loans — to make them PSLF-eligible.

If you qualify for Perkins loan cancellation, which offers forgiveness after five years of public service, pursue that option and don’t consolidate your Perkins loans. You can still participate in PSLF with your other federal student loans.

Work full time for a qualifying employer

Eligibility in the program depends less on the type of work you do and more on who your employer is. Qualifying employers can include:

  • Government organizations at any level.

  • 501(c)(3) nonprofits.

  • AmeriCorps or the Peace Corps.

  • Nonprofit organizations that don’t have 501(c)(3) status but provide a qualifying public service as their primary purpose.

  • Religious organizations.

Complete an employment certification form to confirm that your employer qualifies. Send the form to FedLoan Servicing, the contractor that currently oversees PSLF for the department. When the form is processed, your loans will be transferred to FedLoan to be serviced going forward.

FedLoan is discontinuing its student loan servicing as of December 2022. All borrowers enrolled in PSLF will have their loans transferred to MOHELA.

Submit a new form annually, or whenever you change jobs, to make sure you’re on track for forgiveness. You’re not required to submit the form every year, but it’s a good idea to do so for your records. You can also apply for forgiveness once you’re eligible and certify your employment retroactively.

You must work for your qualifying employer full time, which amounts to at least 30 hours per week. If you work part time for two qualifying employers and your time averages at least 30 hours per week, you might still be eligible.

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Stay up to date on how student loan forgiveness and repayment may affect your finances.

Switch to income-driven repayment

For borrowers who can’t qualify for the temporary waiver, your payments must be made on the standard 10-year plan or on one of the four income-driven repayment plans.

You’ll save the most money if you make all qualifying payments on an income-driven plan. If you make all payments on the standard plan, you’ll pay off the debt by the time you’ve made enough payments to qualify for PSLF.

Payments made on the graduated or extended federal repayment plans don’t typically count toward PSLF. But under the Temporary Expanded Public Service Loan Forgiveness program, which the Trump administration rolled out in March 2018, payments made on those plans may still qualify.

Make 10 years' worth of payments

You must make 120 monthly loan payments. These payments must be made:

  • For the full amount due.

  • On time, meaning within 15 days of your due date.

  • On or after Oct. 1, 2007.

  • While you’re working full time for a qualifying employer and on a qualifying repayment plan.

Payments don’t count if they’re made while you’re in school, in deferment or forbearance, during a grace period, or if your loans are delinquent or in default.

The payments do not need to be consecutive. For example, you could make some qualifying payments, pause payments through forbearance and then resume repayment, picking up where you left off.

You can also change jobs, switching between qualifying employers and nonqualifying employers. However, payments only count toward PSLF when you’re working for a qualifying employer.

As of August 2020, lump-sum or early payments also count toward the 120 needed for forgiveness. You can do this multiple times each year up until your annual recertification deadline. For example, if your monthly bill was $100 and you paid $500, that would count for your next five payments.

Apply to forgiveness

Once you’ve met all of the above requirements, submit the Public Service Loan Forgiveness application. You must be working full time for a qualifying employer when you apply.

Along with the application, you’ll need to submit an employment certification form for your current employer and each employer you had while making the 120 payments. If you’ve been completing these forms regularly, you’ll need to submit only one for your current employer.

FedLoan Servicing will notify you when it receives your paperwork. You aren’t required to make loan payments while it processes your application.

Don't qualify for PSLF? You have other options

You're not alone if you don't meet PSLF's strict requirements. You also have other options:

  • Explore other paths to forgiveness. PSLF isn't the only federal student loan forgiveness program, although it's one of the most popular. However, watch out for loan forgiveness scams.

  • Stay on income-driven repayment. All four income-driven plans will forgive your remaining balance after 20 or 25 years, depending on the plan. However, unlike with PSLF, the forgiven amount is taxable.

  • Consider refinancing. Student loan refinancing can save you money and help you become debt-free faster by lowering your interest rate. However, once you refinance federal loans, they're no longer eligible for forgiveness programs or income-driven repayment. You need stable finances and good credit to qualify.

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