The Biden Admin suspended some of the rules for Public Sector Loan Forgiveness that would allow for previously unqualified payments and suspended payments to qualify for the 10-year Public Service Loan Forgiveness. The most important thing that happens is the consolidation of loans into a Direct Loan on an income-Driven repayment plan and that the individual file the necessary paperwork to prove employment and apply for the program. The suspended rules allow significant opportunity to have previously unqualified payments to qualify, but those rules are set to expire 10/31/22.
We know that some members may have student loans and that those are incredibly burdensome so we wanted to reach out to ensure that you all are aware of Public Service Loan Forgiveness (PSLF), if you aren’t already. The FSA has a program that will allow forgiveness of student loans for Public Employees after 120 payments (10 years) on your student loans. We’ve put together a short guide to help ensure that you qualify for the program.
- Be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service);
- Work full-time for that agency or organization;
- Have Direct Loans (or consolidate other federal student loans into a Direct Loan);
- Repay your loans under an income-driven repayment plan*; and
- Make 120 qualifying payments.
- Fill out the PLSF form Annually. If you haven’t filled it out for prior years, submit one for each year of public service. FSA will respond to the submittal giving a status update for the forgiveness of the loans.
- At the end of the 120 Qualifying Monthly payments, submit the PLSF Form again to certify it
You can check your loan status HERE to see whether or not you are on a consolidated loan in an income driven repayment plan. Under most scenarios, the income driven repayment plan will also be the cheapest option.
As a note: If you were on a direct loan in an income driven repayment plan before payments were deferred on student loans due to COVID-19, each month that has been deferred will still qualify as one of the 120 payments regardless of payment.
If you are not in a Direct Loan in an income-driven repayment plan, it is still possible for you to apply and have the deferred months and previous payments qualify under the following rule changes from the FSA that are in effect until 10/31/22
The rule changes state that you can:
- Receive credit for periods of repayment on Direct, FFEL, or Perkins Loans
- Periods of repayment under any plan count
- Periods of repayment on loans before consolidation count, even if on the wrong repayment plan
- Periods of repayment where payments were late or for less than the amount due also count
- Periods of repayment on loans before consolidation count, even if paid late or for less than the amount due
- Can get forgiveness even if not employed or not employed by a qualifying employer at the time of application and forgiveness
For more information from the FSA, these two links would be a helpful jumping off point.