The Biden administration has launched a new tool to help borrowers determine if they qualify for student loan forgiveness based on their public service jobs. The new tool comes just as a key loan forgiveness expansion is about to expire.
Here’s what borrowers need to know.
Extension of the exemption of student loans thanks to the PSLF
The Public Service Loan Forgiveness Program (PSLF) can provide federal student loan forgiveness to borrowers who devote 10 or more years of their career to public service. Created in 2007, the program has always been governed by strict eligibility rules; only direct federal student loans were eligible, and only payments made under certain types of repayment plans would be considered for student loan forgiveness.
Last October, the Biden administration temporarily relaxed those rules through the limited PSLF waiver. The administration went even further last April, allowing even more past loan spells to count towards the PSLF. Taken together, these changes have significantly expanded the need to be able to count as an “eligible payment” for student loan forgiveness under the PSLF to include most past repayment periods, as well as some past deferment periods and abstention. The changes are temporary, however, and the limited PSLF waiver is scheduled to end on October 31, 2022.
The terms of employment for PSLF are largely unchanged. Qualifying employment, for PSLF purposes, means full-time, W-2 employment for a national public entity or 501(c)(3) nonprofit organization, or part-time employment for multiple qualifying PSLF organizations if your combined hours are at least 30 hours per week.
Department of Education launches PSLF employer search tool
Borrowers can sometimes stumble when trying to determine if their employer qualifies them for student loan forgiveness through the PSLF. And until now, there was no easy way for borrowers to get quick answers. Traditionally, borrowers had to submit a formal PSLF application signed by their employer to their loan officer for a formal decision. And the process can take months.
Earlier this month, the Department of Education launched the PSLF employer search tool. This online database provides a “quick and easy method” to research an employer and receive a preliminary determination of PSLF eligibility before applying. All a borrower needs is the Employer Identification Number (EIN), which is usually found on your W-2 or pay stub, and your dates of employment.
“We have added a new PSLF employer search that allows [borrowers] to search for eligible PSLF employers without logging in” at StudentAid.gov websitesaid the Ministry of Education in a newsletter. “PSLF Employer Search provides easy-to-follow prompts and guides users through the process of determining if their employer is eligible for PSLF. Users will receive a message about next steps if their employer is PSLF eligible, not PSLF eligible, or not listed in the database.
Borrowers must still apply to the PSLF for student loan forgiveness
It is important to note that the PSLF employer search result is not a guarantee of PSLF eligibility, but rather a tool to help borrowers make a preliminary decision. To be eligible, borrowers will still need to submit the PSLF Employment Certification Form (ECF) signed by their employer. Borrowers can start this process via the PSLF Helper Tool. You may also need to take additional steps, such as consolidating your FFEL or Perkins loans into a direct consolidation loan, in order to qualify for PSLF under the limited PSLF exemption.
Borrowers should review the PSLF program, as well as the current interim fixes, before taking drastic action on their loans:
Ministry of Education officials are urging borrowers to apply for the PSLF and take advantage of the limited PSLF waiver before it expires in October.
“The Civil Service Loan Forgiveness Program is helping more and more Americans get debt relief,” Education Secretary Miguel Cardona said in a statement. Tweeter yesterday. “Register today!”
Further Reading on Student Loans
Biden could extend student loan pause through next year, considering further relief, including loan forgiveness
134 groups urge Biden to extend expiring student loan forgiveness initiatives, while top officials tell borrowers to apply now
3 Key Student Loan Forgiveness Opportunities Could End Soon – Here’s How to Apply
If You’ve Been To These Schools, You May Qualify For Student Loan Forgiveness: Here’s What To Do