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Student loan borrowers who missed out on public service loan forgiveness have a second chance for cancellation, and they should move now to prepare.
The $1.3 trillion federal spending plan passed in March 2018 sets aside $350 million to forgive student debts owed by borrowers who met all the conditions needed to qualify for the Public Service Loan Forgiveness program, but were mistakenly enrolled in the wrong repayment plan.
Borrowers pursuing PSLF must make 120 qualifying payments to get forgiveness on the remaining balance. Under the budget law, borrowers who have made payments on a graduated, extended, consolidation standard or consolidation graduated repayment plan have a chance to get relief through PSLF, even though payments made on those plans don’t normally qualify.
This expansion is available to borrowers on a first-come, first-served basis, so the money could run out. Here’s how to apply for what the Department of Education calls Temporary Expanded Public Service Loan Forgiveness, or TEPSLF.
How to get Temporary Expanded Public Service Loan Forgiveness
Confirm you have direct loans, or consolidate
Your loans must be part of the William D. Ford Federal Direct Loan Program to qualify for PSLF or TEPSLF. To confirm that you have direct loans, call your loan servicer or log in to its online portal. You can also sign in to your Federal Student Aid account using your FSA ID.
If you don’t have direct loans, you can still qualify for PSLF if you first consolidate those other federal loans into a new, direct consolidation loan. However, any payments you make before consolidating don’t count toward the 120 payments needed for PSLF.
Document that your employer qualifies
PSLF and TEPSLF rules also require that borrowers must work full-time for a qualifying employer while making the required 120 payments. Qualified employers include:
Other nonprofits that provide a qualifying public service
Submit an employment certification form to FedLoan Servicing, the servicer that processes all PSLF employment certifications and applications, for each of the employers you've worked for while making qualifying PSLF payments.
You can submit these forms retroactively when you're applying for forgiveness, but completing them annually or whenever you switch employers is the best way to get peace of mind that you're on track.
Sign up for income-driven repayment if you haven’t already
Generally, you must be on an income-driven repayment plan to qualify for and benefit from Public Service Loan Forgiveness. (The standard 10-year repayment plan also qualifies, but you won’t get any forgiveness if you make all 120 qualifying PSLF payments on that plan — the loan will be paid off by then.)
Under the Temporary Extended Public Service Loan Forgiveness program, you may be eligible for forgiveness if you’ve made some payments on the following plans, which aren’t typically eligible for PSLF:
If you’re on one of the above repayment plans, you should still switch to an income-driven repayment plan as soon as possible, says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors. The Department of Education's TEPSLF guidelines state that the amount you paid in the 12 months prior to applying for TEPSLF and the last payment you made before applying for TEPSLF must be at least as much as you would have paid under an income-driven repayment plan.
Apply for an income-driven repayment plan on the Federal Student Aid website.
Apply for Public Service Loan Forgiveness
Once you’ve made 120 qualifying payments while working full-time for a qualifying employer, complete the PSLF application and send it to FedLoan Servicing.
Submit the application even if you made some payments on a graduated, extended, consolidation standard or consolidation graduated repayment plan. You need to be denied for PSLF before requesting forgiveness under TEPSLF.
Send an email requesting reconsideration
If you were denied for PSLF solely because some or all of your payments weren’t made under a qualifying repayment plan, email [email protected] requesting reconsideration. The Department of Education recommends using this template:
Subject: TEPSLF request
I request that ED reconsider my eligibility for public service loan forgiveness.
Name: [Enter the same name under which you submitted your PSLF application]
Date of Birth: [Enter your date of birth in MM/DD/YYYY format]
Once you send the email, you'll receive a response from FedLoan Servicing with results and next steps. If you have questions, contact the servicer at 1-855-265-4038.