Public service workers have 6 weeks to apply for student loan repayment waiver

Borrowers who want student loan forgiveness for public service work have a rapidly shrinking window to seek relief under a temporary waiver. The Biden administration has updated key guidelines for the program, clarifying what borrowers must do to apply.

Here is the latest.

Student Loan Forgiveness For Public Service Borrowers Ends Next Month

The Public Service Loan Forgiveness (PSLF) provides federal student loan forgiveness to borrowers who have dedicated their careers to public service work. Borrowers who work 10 or more years for public or nonprofit organizations while meeting other (sometimes complicated) program requirements can have their entire federal student loan balance forgiven.

But PSLF has been plagued with problems for years due to complex regulations, administrative oversight issues and poor account management by loan officers. Approval rates barely exceeded two percent.

In response to these issues, last year the Biden administration signed into law the Limited PSLF Waiver, a move that temporarily relaxes many of the strict rules of the PSLF program. Specifically, the PSLF Limited Waiver allows the Department of Education to retroactively credit large prior loan periods (including certain deferment and forbearance periods) toward a borrower’s loan forgiveness term under of the PSLF which may have been previously rejected.

But the limited PSLF waiver is a temporary program and is due to expire on October 31 – in just over six weeks. Student borrower advocacy groups and Democratic lawmakers have urged the Biden administration to extend the deadline, but so far administration officials have given no indication that an extension is coming. Meanwhile, millions of borrowers who could benefit from the waiver initiative have yet to take action.

Department of Education updates limited PSLF waiver guidelines

With just six weeks left until the limited PSLF waiver expires, advocates are growing concerned that millions of borrowers who just learned of the initiative could miss the boat by receiving relief. Many borrowers will need to take specific steps by October 31 to qualify for PSLF credit and loan forgiveness. Specifically:

• Borrowers with FFEL program loans should consolidate those loans through the Federal Direct Consolidation Loan Program.
• Borrowers who have not submitted the PSLF employment certification forms for every civil service employer they have had should do so.

Both of these steps can take time, and even more time for the education department. Borrowers and advocates fear that if direct loan consolidation and employment certification are not completed as of October 31, borrowers would lose PSLF relief.

This month, the Ministry of Education updated its guidance on limited PSLF exemption and clarified that borrowers must submit their relevant applications by October 31 to qualify for the limited PSLF waiver, but these applications do not have to be treaty by the Department of Education on that date for borrowers to receive relief.

For Direct Loan Consolidation, the Department of Education states, “If you have FFEL, Perkins, or other types of loans that are not Direct Loans, your Consolidation Application must be submitted online through StudentAid.gov before 11:59 p.m. Eastern Time on October 31, 2022, so that you can receive the benefits of the PSLF Limited Waiver.

For PSLF Employment Attestation forms, the Education Department asks borrowers to “use the PSLF Helper Tool before October 31, 2022, to generate a PSLF form that will ultimately be approved. [The Education Department] will keep a record if you have completed all steps of the PSLF Support Tool by October 31, 2022, but you must still print, sign, have your employer sign, and submit the PSLF form to MOHELA, the PSLF service.

Alternatively, borrowers can submit a manual PSLF form (not generated by the PSLF Helper Tool) signed by the borrower’s employer, but it “must be dated October 31, 2022 or earlier, and this form must be subsequently approved, for the borrower to receive PSLF credit. The Department of Education states that “[t]To receive the benefits of the PSLF Limited Waiver, the employer signature and date on your PSLF form must be on or before October 31, 2022, even if you submit your form at a later date… If the signed date by the authorized representative of your employer of record is on or after November 1, 2022, normal program requirements for PSLF” apply.

Resources for Borrowers Seeking Student Loan Forgiveness Through a PSLF Waiver

Borrowers can learn more about the limited PSLF waiver hereor PSLF more generally here.

Use the online consolidation tool if you need to consolidate your loans through the direct consolidation program, or the PSLF Helper Tool start working on the PSLF Employment Attestation Forms. The Department of Education has also released a new PSLF employer search tool for borrowers who are unsure if their job qualifies.

Further Reading on Student Loans

When can borrowers expect student loan forgiveness under Biden’s new plan?

134 groups urge Biden to extend expiring student loan forgiveness initiatives, while top officials tell borrowers to apply now

Student loan borrowers should note these critical dates for loan cancellation and repayment

Biden’s student loan forgiveness could be taxable in some states