October 6, 2021
Part of our COVID-19 Consumer Protection Guide series.
On Oct. 6, 2021, the U.S. Department of Education (ED) announced changes to the Public Service Loan Forgiveness program rules for a limited time as a result of the COVID-19 emergency. Here are the changes you need to know about — especially if you made loan payments that previously didn’t qualify for PSLF.
FAQs for PSLF Participants
Q. What are the changes I should be aware of?
A. If you worked for a nonprofit or government employer and were making student loan payments that didn’t previously qualify for PSLF, you should check again now to see if you can use those payments towards loan forgiveness.
The Department has created a “Limited Waiver Opportunity” through October 31, 2022, which waives many of the previous stringent PSLF requirements.
Previously, PSLF was only available to borrowers working for nonprofit or government employers who had federal Direct Loans and who made on-time, exact payments on a qualifying repayment plan.
Now, the limited waiver provides more flexibility (though it is still limited to borrowers who have worked for a nonprofit or government agency):
If you were making payments on FFEL or Perkins Loans, you can apply those payments towards PSLF.
If you had ineligible loan types (like FFEL or Perkins Loans) but consolidated them into a Direct Consolidation Loan, you can apply.
If you were on a previously ineligible repayment plan, including a graduated or extended plan, you can now apply.
If you made payments toward PSLF, even if they were not on time or for the exact amount owed, you can now count those payments towards PSLF.
Q. How do I find out what kind of loans I have?
A. Visit studentaid.gov and log in to your account to figure out what kinds of federal loans you have.
(Note that private loans do not qualify for PSLF; however, you can check your private loans by getting a free credit report from any of the major credit reporting agencies (TransUnion, Equifax, and Experian) on annualcreditreport.com. Free weekly credit reports are available there until April 2022.)
Q. What if I never submitted a PSLF form but I think I qualify?
A. If you think you qualify, you should submit a PSLF form now. Applying now will help ensure that, if you qualify, you’ll get the benefits before October 31, 2022. Make sure you have your Employment Certification Forms, too.
You can apply for PSLF online using the PSLF help tool or by downloading it from this website
Q. Do I need employment certifications from all of my employers?
A. Yes, you will need certification forms from all of your qualifying employers to get loan forgiveness. Contact your former employers as soon as possible and ask them to sign the form for you. Be sure to submit your forms before October 31, 2022.
You need to submit the forms to document your employment and payments before the deadline. Make sure to submit at least one form for each qualifying employer. Each employer will need to certify the dates that you worked at their organization.
Q. If I have Perkins or FFEL loans, do I need to do anything or will payments on these loans now automatically qualify for PSLF?
A. If you have already consolidated your loans in a Direct Consolidation Loan, then your pre-consolidation payments will automatically qualify for PSLF. However, if your loans are not currently consolidated in a Direct Consolidation Loan, then you will need to submit a loan consolidation application and a PSLF form by October 31, 2022 in order for your payments to qualify.
If your Perkins or FFEL loans are not yet consolidated, you can find a consolidation loan application here
Remember, payments on Direct Loans (e.g., Direct Subsidized and Unsubsidized Loans, Direct Stafford Loans, Direct Grad PLUS Loans, or Direct Consolidation Loans) automatically qualify for PSLF.
Q. What if I submitted employer certification forms and/or a loan forgiveness application in the past but was told that some of my payments didn’t qualify?
A. If you already submitted an employer certification form or an application for loan forgiveness, the Department should automatically give you credit for those months of qualifying payments.
If the Department rejected some loan payments you made while working for a qualifying employer because you were in a non-qualifying repayment plan, did not pay the exact amount owed, or made payments that were not exactly on time, the Department should automatically adjust the PSLF payment count for you.
However, you may need to submit additional documentation (for instance, if you didn’t include an employer or list all of the months of payments). You should submit these documents and complete your PSLF application before October 31, 2022.
If you have a non-qualifying loan (such as a FFEL or Perkins loan), you will need to submit a PSLF application and a direct loan consolidation application to qualify for loan forgiveness.
Q. During the pandemic, student loan payments have been suspended. Do those months with $0 payments count towards PSLF?
A. Yes, the suspended payments count towards PSLF.
The CARES Act makes clear that the suspended payments count as qualifying payments towards Public Service Loan Forgiveness. You owe $0 during these months and get credit toward IDR and/or PSLF. Since no interest is accruing, your balance should not change during this time.
Q. Will the Department be making long-term changes to the program?
A. Yes, the Department has proposed a number of planned long-term improvements, and negotiated rulemaking is underway for additional changes.
Although the Department has not provided details of long-term changes to the program, it has stated its intent to implement a number of reforms:
Reduce barriers to PSLF for military servicemembers. Months spent on active duty will count toward PSLF, even if loans were in forbearance.
Automatically give servicemembers and federal employees credit for PSLF by matching Department of Education data with federal employee databases.
Review denied PSLF applications and correct errors in PSLF processing. (This is part of a settlement between the Massachusetts Attorney General and FedLoan Servicing, and will take place as part of an internal review by the Department.)
Improve outreach and communications with borrowers potentially eligible for PSLF.
Simplify the PSLF application process, including improving the qualifying employer database and allowing e-signatures on applications.
Additionally, negotiated rulemaking hearings are taking place over the next few months. That rulemaking may result in further improvements to the PSLF program.
Q. I heard that some loan servicers aren’t renewing their contracts. What does that mean for me?
A. Three of the major federal loan servicers are not renewing their contracts with the Department of Education, which means those loans will be transferred to different servicers.
If your loan servicer is FedLoan Servicing, your loans will be transferred to MOHELA.
If your servicer is Granite State Management & Resources (GSMR), your loans will be transferred to Edfinancial.
If your servicer is Navient, your loans will be transferred to Maximus.
You can take steps to make the transition to a new servicer easier:
Update your contact information now so that emails and letters about the transition are sent to the correct address.
Download and save everything you can from your current loan servicer’s website before the transfer occurs: payment histories, billing statements, income-driven repayment plan documents, PSLF/Employer Verification Form acceptances and approvals, notices about the COVID-19 payment suspension, etc. Keep all of those documents saved for your PSLF records. Some borrowers have had problems after previous transfers, with new loan servicers claiming some payments didn’t count toward PSLF. You’ll want to make sure you have proof of all your payments so you’re able to refute any claims like that if they arise.
Take note of your loan balance at the time of the transfer. Once your transfer is complete, make sure the loan balance is correct.
After the transfer is complete, make sure your monthly payment amount is correct.
Q. How can I get individual help?
A. Berkeley students can contact the financial aid office or the LRAP office. See additional resources below.
For the financial aid office, contact email@example.com. For LRAP, contact firstname.lastname@example.org
You can also check out the PSLF page on Berkeley’s website.
National Consumer Law Center has a detailed webinar on COVID-19 and student loan borrowers. Access it here.
Many thanks to Amanda Prasuhn, Associate Director of LRAP, for her expertise.
This guide is intended for informational purposes only and does not provide legal advice.