Department of Education Public Service Loan Forgiveness Update

PSLF Waiver Offers Way to Get Closer to Loan Forgiveness

On Oct. 6, 2021, the U.S. Department of Education (ED) announced a change to Public Service Loan Forgiveness (PSLF) program rules for a limited time as a result of the COVID-19 emergency. Throughout the emergency, ED has provided a variety of benefits to borrowers.

Now, for a limited time, borrowers may receive credit for past periods of repayment that would otherwise not qualify for PSLF.

New Rules for Qualifying Payments

Under the new temporary rules, any prior period of repayment will count as a qualifying payment, regardless of loan program, repayment plan, or whether the payment was made in full or on time. But you do continue to need qualifying employment.

This change will apply to borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by Oct. 31, 2022.

Which PSLF Requirements Are Waived

Here’s what’s changed and what’s unchanged as of Oct. 6, 2021.

Normal PSLF Requirements

• Receive credit only on Direct Loans
• Repay under the 10-year Standard Plan or an income-driven repayment plan
• Make on-time payments
• Need to be employed fulltime for a qualifying employer in order to receive credit
• Must work for a qualifying employer at the time of application and forgiveness
• If you got Teacher Loan Forgiveness, the period of service that led to your eligibility cannot also count toward PSLF

Changes Until Oct. 31, 2022

• 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
• If you got Teacher Loan Forgiveness, the period of service that led to your eligibility can count toward PSLF if you certify PSLF employment for that period

You can learn more on the Department’s website.