The Public Service Loan Forgiveness Waiver Expires Oct. 31. Do You Qualify?

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Editor's Note: The deadline for applying for the Public Service Loan Forgiveness waiver has passed.

Oct. 31, 2022 is an important date for student loan borrowers in public service, and it has nothing to do with Halloween. (Though missing it could be just as scary.)

That’s the last day you can apply for the limited Public Service Loan Forgiveness (PSLF) waiver, which allows borrowers to receive credit for past periods of repayment that typically don’t qualify in the program.

If you think taking advantage of the waiver while it’s still available won’t make much of a difference, you might want to think again. The differences between the standard PSLF requirements and the more lenient requirements available through Oct. 31 are significant.

Under the temporary PSLF waiver, you can receive credit for:

  • More loans count. Periods of repayment on direct, FFEL (Federal Family Education Loan) and Perkins Loans. Typically, only direct loans are eligible.
  • All plans count. Periods of repayment under any plan count, not just the 10-year standard plan or income-driven repayment plan.
  • More repayment counts. Periods of repayment on loans before consolidation count, even if on the wrong repayment plan.
  • More payments count. Late payments or payments less than the amount due count.
  • Different employment counts. Periods of repayment when unemployed or not employed by a qualifying employer at the time of application and forgiveness.
  • Other jobs count. Periods of service for teachers that led to Teacher Loan Forgiveness eligibility will count toward PSLF if teachers certify their PSLF employment for that period.

Remember, the PSLF program is unrelated to the government’s student debt relief program that will forgive up to $20,000 of loan debt. That student loan forgiveness application is live — albeit in beta form — and due by Dec. 31, 2022.

PSLF is for people who work in public service in federal, state, tribal or local government or for a nonprofit organization. You can learn about submitting a PSLF waiver application here.

A Brief Overview of PSLF History

The U.S. Department of Education announced in October 2021 that up to 550,000 borrowers would see “accelerated forgiveness” of their loans, and that would mean immediate loan forgiveness for tens of thousands.

The PSLF program was created in 2007 by former president George W. Bush to help public service workers — health care, education, social services and so on — get out of student loan debt quicker as long as they followed some strict, and often confusing, guidelines.

In the past, the program had four requirements to qualify:

  • A full-time job in the public sector.
  • A specific type of federal loan.
  • A specific type of repayment plan.
  • 120 on-time, non-consecutive payments.

In theory, if you met those four guidelines, you could qualify. But if only it were truly that simple.

The program has been plagued by poor communication and conflicting information from the U.S. Department of Education and student loan servicers. According to the Education Data Initiative, only 2.16% of applications have been approved since the program’s inception, and 35.2% of current applications remain unprocessed.

For those who were approved, many paid off their loans for years, thinking they were making many of the 120 payments to qualify, only to find out later that they had the wrong type of loan or repayment plan.

Recognizing the problems with the PSLF and the hardships many borrowers faced during the pandemic, DOE announced “transformational changes” in 2021 that they say will put 550,000 public service workers closer to loan forgiveness.

4 FAQs About Public Service Loan Forgiveness

It’s important to remember that the PSLF program will still be available after Oct. 31. The main difference, though, is the qualifications will not be as lenient as they are under the limited, temporary PSLF waiver. The requirements will return to the original rules held by the PSLF program after a yearlong hiatus. Put in your application by Oct. 31 to see if you qualify.

What Benefits Does the Temporary PSLF Waiver Offer?

FFEL Loans Now Qualify

Federal Family Education Loans (also known as FFEL) now qualify for the program under the limited waiver. Anyone with these types of loans can have past and current payments count toward the 120-payment threshold, assuming the borrower meets other eligibility requirements and applies by Oct. 31, 2022.

Many Disqualified Payments Now Count

Imagine paying 7 cents more than the required amount of your monthly bill. In the past, that payment wouldn’t count toward your 120 because it wasn’t exact. That odd requirement has been removed. Late payments will now also count as well.

Prior Non-Qualifying Repayment Plans Temporarily Qualify

In the past, the PSLF only accepted a few specific payment plans, like the Pay As You Earn Repayment Plan (PAYE) and Income-Based Repayment Plan (IBR). Loan servicing companies, however, were fraught with misinformation to borrowers, even putting them on disqualified plans in some cases. Those payments will now count toward forgiveness.

Who Will the PSLF Waiver Help?

The DOE said the temporary policy would allow 22,000 borrowers with consolidated and previously ineligible loans to become immediately eligible for $1.7 billion in forgiveness. In addition, 27,000 borrowers could become eligible for $2.8 billion in forgiveness by certifying employment.

More than 550,000 previously consolidated borrowers will have more qualifying payments. In total, the average borrower will have two years cut off their repayment toward forgiveness.

According to some borrowers, the DOE is making good on their promise. Thousands of emails were sent last year to teachers, nurses and other public servants letting them know their debt could be wiped out long before expected.

Lee Dossett, a physician in Kentucky, was one recipient of loan forgiveness in January 2022.

“I reapplied for the public service loan forgiveness (10 years at nonprofit) since they loosened the rules,” he said in a viral tweet. “They denied at first, but I just got notice that all my med school loans are forgiven. In shock.”

How Do I Know if I Qualify for the PSLF Waiver?

Whether you qualify for forgiveness will rely on the types of loans you have. FFEL loans will now qualify, as well as Perkins and direct loans — which were previously eligible.

To help figure all this out, create an account at the Federal Student Aid office, which will create your FSA ID. Within that portal, you should be able to identify your loan types.

You can also use the PSLF help tool to determine whether you have a qualifying employer and what other steps you might need to take to become eligible for PSLF. The tool will eventually provide you with the form you need based on the information you provide.

What if I Don’t Qualify for the PSLF Waiver?

About 43 million Americans currently have an average of $37,667 in student loan debt — meaning the large majority of borrowers are not public service workers and will not qualify for the PSLF program.

If you find yourself in that group, you have other options. You might have other ways to have your loans forgiven, canceled or discharged. You could qualify if:

  • You’re permanently disabled.
  • You file for bankruptcy (very conditional based on the amount and type of debt).
  • Your college falsely certified your eligibility for the loan.
  • You become a teacher in a low-income school.
  • You volunteer for the Peace Corps.
  • You become a child or family services worker.
  • You’re in the armed forces and serving in a hostile area.
  • You can find forgiveness and discharge forms on the U.S. Department of Education site.

And don’t forget — none of these forgiveness options include the more recent Student Debt Relief Plan — a sweeping forgiveness plan that could provide $10,000 to $20,000 of debt relief to working and middle class student loan borrowers.

If you’ve yet to apply for that forgiveness, here’s what you need to do.

The Bottom Line

Whether or not the PSLF waiver has had the type of effect the DOE said it would has yet to be seen. At the very least, they indicate the government’s willingness to recognize the burden student loan debt has become for many Americans.

For more information about student loan forgiveness, and to create an FSA ID, visit the Department of Education website.

Robert Bruce is a senior writer for The Penny Hoarder.