Policy Spotlight: Public Service Loan Forgiveness Waiver Deadline Is October 31
Employers have an important role in ensuring workers apply ASAP: Perkins and Federal Family Education Loan Program borrowers must first consolidate their loans into Direct Loans, which can take 45+ days, before filing a waiver application.
Government and nonprofit employers have an important role in ensuring all workers who are eligible for the limited Public Service Loan Forgiveness waiver apply for it by the October 31 deadline, and the sooner the better. The results can be lifechanging for your employees and beneficial to your organization.
Introduced temporarily last fall, the waiver — which is a single application to certify employment and evaluate a federal student loan borrower for forgiveness — enables eligible “student borrowers to count all payments made on loans from the Federal Family Education Loan (FFEL) Program or Perkins Loan Program,” including ones that didn’t previously count.
It also waives “restrictions on the type of repayment plan and the requirement that payments be made in the full amount and on-time for all borrowers.”
A critical wrinkle: “borrowers who currently have FFEL, Perkins, or other non-Direct Loans, will get the benefit of this limited waiver if they apply to consolidate into the Direct Loan program and submit a PSLF form by October 31, 2022” — but the consolidation process can take 45 days, so borrowers should act now.
Given the connections among student loan debt, mental health, stress, employee wellness and productivity, it behooves all government and nonprofit employers with potentially eligible employees to make sure they are aware of the deadline. In 2021, more than 30,000 borrowers eliminated an average of nearly $67,000 through the limited PSLF waiver.
As a resource for employers, we put together an easily shareable Q&A for employees who are or could be asking the potentially life changing question:
“Am I eligible for the limited PSLF waiver and if so what do I need to do?”
What is PSLF?
If you are employed by a U.S. federal, state, local, or tribal government or not-for-profit organization, you may be eligible for the Public Service Loan Forgiveness Program. The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
What is the “limited PSLF waiver?”
Last fall 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. Borrowers may receive credit for past periods of repayment that would otherwise not qualify for PSLF by applying for the limited PSLF waiver by October 31, 2022.
Am I eligible for PSLF and the limited PSLF waiver?
The best way to know if you’re eligible is to apply today using the PSLF Waiver Help Tool.
You don’t have to use the Help Tool to generate a PSLF form with your employer, BUT your form will be processed more quickly if you do, so it’s best to use it.
To qualify for PSLF, generally, you must meet the following criteria:
- 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 (This provision is waived through October 31, 2022 as part of the limited PSLF waiver.);
- make 120 qualifying payments.
Search here to see if your employer qualifies.
Which loans qualify for PSLF and the waiver?
Any loan received under the William D. Ford Federal Direct Loan (Direct Loan) Program qualifies for PSLF.
Loans from the Federal Family Education Loan (FFEL) Program and the Federal Perkins Loan (Perkins Loan) Program don’t qualify for PSLF. However, they may become eligible if you consolidate them into a Direct Consolidation Loan.
“Borrowers who currently have FFEL, Perkins, or other non-Direct Loans, will get the benefit of this limited waiver if they apply to consolidate into the Direct Loan program and submit a PSLF form by October 31, 2022” — but the consolidation process can take 45 days, so borrowers should act now.
The waiver enables eligible “student borrowers to count all payments made on loans from the Federal Family Education Loan (FFEL) Program or Perkins Loan Program,” including ones that didn’t previously count.
How do I consolidate my non-Direct Loans?
Go here to consolidate qualifying federal student loans including outstanding FFEL and Perkins loans into a Direct Loan, to take advantage of the limited PSLF waiver. It’s free to apply. Be aware that private companies may offer to help you consolidate your loans for a fee, but it’s free to apply. Knowledge is power, and in this case money.
How does the federal student loan payment moratorium impact my PSLF eligibility?
Under the moratorium scheduled to expire on August 31, 2022, each month since it began counts as a qualifying loan payment. If you paused your payments for the past 26 months, then you registered 26 on-time payments, bringing you 26 payments closer to your goal of 120 qualifying payments toward forgiveness.
