By Dr. James M. Dahle, WCI Founder
On Oct. 6, 2021, the Department of Education announced some new rules regarding Public Service Loan Forgiveness (PSLF). The government is calling it a “limited waiver.” However, they come with a deadline. These rules will admittedly only apply to a small percentage of white coat investors. But if this applies to you, it's a big deal.
Changes to PSLF Program–FFEL Loan Payments Now Count
The main change to the PSLF Program has to do with Federal Family Education Loan (FFEL) program borrowers. These loans are not considered “Direct Loans,” and so they have never qualified for PSLF. Remember the PSLF requirements:
- Qualifying loans (direct only)
- Qualifying employer (501(c)(3))
- Full-time work
- 120 on-time monthly payments
What FFEL borrowers have done in the past is consolidate their FFEL loans into a direct loan. Then, any payments they make from that time forward count toward the 120 payments for PSLF.
New PSLF Payment Requirements
So what is the change?
Now, any payments you made in the past via the FFEL program count toward your 120 payments IF AND ONLY IF YOU CONSOLIDATE BY HALLOWEEN 2022! Cool beans, right? This means FFEL borrowers will be eligible for PSLF earlier—sometimes years earlier—than they otherwise would be. Especially if they never got the memo that they needed to consolidate into a direct loan.
This change also applies to Federal Perkins Loans, Graduate Plus Loans made to students, and any other federal loan that is not a direct loan. However, Parent Plus loans did not qualify before, and they do not qualify now.
Unfortunately, if you have already received PSLF, there is no credit for FFEL loans that are already gone. Sorry.
Payment Under Any Repayment Plan Count Toward Loan Forgiveness
There might also be a few people who were not enrolled in either an Income Driven Repayment (IDR) plan like ICR, IBR, PAYE, and REPAYE or the standard 10-year repayment plan. Previously, these were the only payment plans eligible for PSLF. However, now payments made under any plan can count toward your 120 payments. They don't even have to be on time. Or even full payments. Loan type doesn't matter, repayment program doesn't matter, timing doesn't matter, full payment doesn't matter. So any payments you have made that previously didn't count may now count, and you might be a lot closer to 120 than you think. These payments are supposed to automatically be recounted, but if I were you, I'd keep an eye on it.
If these new payments put you over 120 payments, you will get PSLF and all your extra payments will be refunded to you. Tax-free. Yay! You might have to fill out a few extra PSLF forms certifying your employment if you haven't already, but that's it. Otherwise, it should happen automatically.
Special Benefits for Military Members to Enroll in PSLF
While not too many military docs have a big student loan problem, some do. There's a provision for them, too. Every month you were on active duty counts as one of your 120 payments, even if you were in forbearance or deferment. While I like our military folks as much as anyone, this change irks me a bit as it rewards people who did the wrong thing (enrolled in forbearance and did not make payments) over people who did the right thing (enrolled in IDR and made payments). Such is life with the federal government and its bureaucracy sometimes.
What About IDR Forgiveness?
What if you are one of the (in my view) very unfortunate people going for fully taxable IDR forgiveness after 20 (PAYE) to 25 (REPAYE) years? Do these changes help you? Unfortunately no. To get IDR forgiveness, you have to be making payments in an IDR Program, and FFEL payments are not in an IDR program.
What If I Already Privately Refinanced?
Those of you who decided to privately refinance your ineligible loans are probably out of luck since they are no longer federal. Definitely a bummer for those of you who borrowed FFEL loans and worked for years at a 501(c)(3) or nonprofit out of training.
Why Is This PSLF Program Change Happening?
Naturally, one might wonder why this is happening, why this is happening now, and why there is a deadline. Reminds me of a very old beer commercial with the slogan, “Why ask why? Try Bud Dry!” But if you can't help it, here's why:
The Department of Education found an obscure passage in the Heroes Act of 2003 that allows it to waive certain federal student loan rules during periods of national emergency. The COVID pandemic apparently qualifies as a national emergency. That national emergency is currently scheduled to end (you can schedule these things to end?) on Halloween 2022.
What Should You Do About PSLF Changes?
If you are in this situation (or think you might be), there are a few things you should do.
- Find out what kind of loans you actually have. Log in to StudentAid.gov and scroll down to the Loan Breakdown section. Look at the names of the loans. Direct loans start with “Direct,” FFEL loans start with “FFEL,” and Perkins Loans start with “Perkins.” Even if you have consolidated your loans, you should still be able to see the original loans there.
- Consolidate your loans. (Remember consolidation is very different from student loan refinancing.)
- Apply for PSLF using the standard PSLF form.
What If I Need Some Help with Student Loans?
If you are not sure what to do about your student loans, we recommend you spend an hour and a few hundred dollars with Andrew Paulson of StudentLoanAdvice.com, a White Coat Investor company started to help people just like you. Andrew is a student loan expert who can help
walk you through the ins and outs of your student loan situation. Even if you have received advice in the past, you may need another session (and new advice) because of these new changes. Andrew estimates that 10%-15% of his past clients have had FFEL loans. If you are still within the six-month period of purchase, additional questions by email are part of the package you purchased from StudentLoanAdvice.com, so there would be no additional charge for them.
What If PSLF Still Doesn't Make Sense for You?
The main PSLF requirement still exists. You still have to work for a non-profit, 501(c)(3) employer full-time. If you don't and you're not in such a terrible student loan situation that IDR Forgiveness actually makes sense for you, then you should refinance your student loans, live like a resident, and get them paid off ASAP. Here are the best deals from lenders trusted by thousands of white coat investors. If you go through our links (and clear cookies first if you have gone to these sites through any other links), you'll get hundreds of dollars of cash back, and we'll throw in our Flagship online course, Fire Your Financial Advisor (an $800 value) for free.
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What do you think? Do these rules change anything for you? How much more will you get forgiven? What do you think of the changes? Comment below!
I have a co-worker who has not done anything with his student loans since graduating 11 years ago. He is just paying whatever the monthly payment worked out to be. He pulled up his loans on StudentAid.gov and confirmed that his loans are described as “Direct Unsub Consolidation Ln”. He has worked at the same 501(c) hospital the entire time. If I am reading this correctly, it sounds like he can now apply for forgiveness and once the paperwork goes through, he can have his loan balance (around $100k) forgiven for making more than 120 qualifying payments at this point? (Good thing for him I guess he has ignored my continued advice to refinance for years)
Hi Andrew,
You’re correct.
Under the new rules, any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment.
Andrew StudentLoanAdvice
So I am very late to this game. I just assumed when we went into private practice we wouldn’t qualify. But now we want to purchase a home and the student loans are frustrating.
I replied to his because my husband and i are both 10 years out of training. I am fortunate my loan burden and savvy moves by my father helped. My husband not so much.
He has 4 years of residency (im’ sure loans in forbearance) + 1 year PP + 6 academic not calendar year) in a qualifying institution + 1 year of fellowship (he went back after being an attg for 7 years). He has paid loans during entire attending life and fellowship year. Now he’s in private practice again building up (slowly) his practice.
Have you heard of any one successfully applying even after being out for 10 years and getting retroactive forms filled out from those qualifying instituions? I replied to this particular comment it’s similar scenario except that friend is a the same insitution for 10 years. I want to know if its possible and if it can be done even after that one year of PP work. I don’t know if he reconsolidated but i know this could affect things. We called sofi and laurel road from all their spam mailings but they haven’t offered my husband anything better in terms of interest rates. Also we graduated during the lowest interest rate period. I think one year it was only 2% but after paying loans for 10 years, I want to know if we can do anything else. Been letting my husbnad call etc, but i’m taking this into my own hands now. Thank you!
Direct loans? Full-time 501(c)3 employment? 11 years of on-time monthly payments? He qualified for PSLF long before the recent changes. Telling him to refinance was definitely a disservice. Yes, he should apply for PSLF ASAP. Like a year ago.
Is this too good to be true?
Saw this on the consolidation application that makes me hesitate:
J. Any payments I made on the loans I am consolidating before the date of consolidation will not count toward:
The number of years of qualifying repayment required for loan forgiveness under the REPAYE Plan, the PAYE Plan, the IBR Plan, or the ICR Plan (see Item 11 of the Borrower’s Rights and Responsibilities Statement), or
The 120 qualifying payments required for Public Service Loan Forgiveness (see Item 18 of the Borrower’s Rights and Responsibilities Statement).
Hi Chris,
Under the old rules completing a direct federal consolidation erased your payment history. Well as of the new waiver rules have changed.
Under the new rules, ANY prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment.
Andrew StudentLoanAdvice
This is a long shot, but:
If we were lied to (or “misinformed”) by our loan servicer about getting in on that sweet “waiving mandatory forbearance” of the initial 6 month period after graduating med school, can we get those 6 months of what should have been $0 payments added on?
I called to get the ball rolling on PSLF even before I graduated, was told they couldn’t set up anything until I officially graduated, called back upon graduation, and was told I had to wait 6 months. This hoses a person for an amount equal to the last 6 months of payments, which for many of us is a 5 figure number. This is a bitter pill to swallow for being poorly advised by the loan servicing agency who seems to have not known enough to properly deal with my intention to start repayment immediately.
Since they widespread failures of the loan servicers are being addressed, I’m hoping I can somehow get this 6 month period retroactively. Hope springs eternal.
Hi JJ,
It’s terrible whoever told you this since it’s a flat out lie. They cost you 4-5 months of $0 payments which would have counted towards the 120. Now you’re stuck with making additional payments which will definitely cost you a 5 figure number as you finish PSLF as an attending.
In order to opt out of the six month grace period you have to complete a direct federal consolidation and indicate you’d like to move into repayment immediately.
Doubt they will count anything for you. Sorry…
Andrew StudentLoanAdvice
Yes, you got bad advice. That’s not rare at all. I doubt you’re going to get those 6 payments back, but it’s worth a try I guess. They’re certainly being nicer these days than they have been in the past.
While this is not the same situation. My servicer would “skip” a payment every time my income was recertified and payment amount changed. This happened three times over three years. I wrote in to customer service and said that I should be able to retroactively pay these 3 months and they allowed me to do so. Was very surprised by this move, but I that move alone will save me a few thousand dollars.
MB,
Guess they recognize their mistakes at times.
Andrew StudentLoanAdvice
I’m hoping this works for me. I was doing IBR in 2013 and then got employed by a qualifying employer in August. However I didn’t consolidate into direct loans until mid 2014 (changed from Great Lakes to Fed Loans then as well). At that time I had to recertify my payment plan to recalculate my payments (IBR). Payments made since 6/2014 qualify but I’m hoping I can get the payments from 8/2013 to count as well. Is this going to be a problem because I consolidated in 2014?
Hi Chasingbutterflies,
Whenever you finished school, started making a payment of any kind and had eligible employment should count.
Those payments you started in 2013 should also count towards the 120 to PSLF.
The old rule (now changed) erased all prior payment history when you completed a direct federal consolidation.
Andrew StudentLoanAdvice
I graduated in 2006 but due to combination of circumstances didn’t complete residency and wasn’t working. I was no longer on forbearance and was on IBR in 2013 but my payments were 0 because I wasn’t working until August. Fed Loan Servicing doesn’t have any of the history so I put in the question to Studentaid.gov. Assuming if I can get the history confirmed from them I can then apply with FedLoanServicing?
Chasing Butterflies,
You need to have qualifying employment to count, so I’d assume you started receiving count in August of 2013.
Absolutely. You would need to file an employment certification form for those years. Have your employer sign it and send it to your loan servicer. If you current servicer isn’t FedLoan, you’ll get switched to them as soon as your current servicer receives your PSLF certification form.
I would also try to dig up a record of those past payments you’ve made by pulling annual bank statements. I wouldn’t be surprised if the servicer missed a couple of payments you’ve made. Which you can refute with supporting documents like a bank statement.
Andrew StudentLoanAdvice
I submitted an employment certification form in 2014 right after I consolidated (I still have it). It was accepted but no qualifying payments at that time (I have that as well). My payments were IBR but they were 0 so no bank statements (I should have that as well, kept all my records, were paper then). I no longer work for that employer but I can resubmit if necessary. The trick is getting records from Great Lakes as no longer with them. Thank you! This can save me almost a year!
Turns out I did make a payment to Great Lakes in October of 2013. I will try to get the records from Great Lakes.
To qualify do you need to have 120 payments made by 10/31/22 (or just need to be consolidated by that date)?
If consolidated by 10/31/22, you keep on making payments and then will be forgiven when you reach 120?
This is fairly technical, but does a payment “count” for any month that you are employed?
Ex: Make payment 10/1/21, start work at a qualifying employer 10/15/21, does the 10/1/21 payment count?
Ex: Make payment 10/31/21, leave qualifying employer 10/15/21. does the 10/31/21 payment count?
Hi CC,
1.) Don’t need the 120 payments to apply. Just complete the direct federal consolidation prior to Halloween next year and you’ll be eligible for past payments the limited waiver discussed which now count —
Under the new rules, ANY prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment.
2,) Yes, enroll in a qualifying repayment plan like IDR and continue on track to 120 payments.
3.) No. You need to be in repayment. Example, when you graduate and go into the six month automatic grace period, although most graduate in May and start resident jobs in June or July, those first six months won’t count as a “count” or a qualifying payment unless you complete a direct federal consolidation which allows you to opt out of the grace period and begin making payments immediately. Albeit, $0 payments since you probably didn’t make anything as an MS4.
This is treated differently for those who are in the military and went into forbearance. Those months/years in forbearance/deferment will count towards the payment count for PSLF.
4.) Half month won’t count as a full month. On the PSLF Cert Form if you employer indicates employment
-July 1, 2021 – June 30, 2022 = 12 payments
-July 15, 2021 – June 30, 2022 = 11 payments
Andrew StudentLoanAdvice
I have a question about deferments. I started IM residency in July 2008 with FFEL consolidated loans. I was in deferment (per studentaid website) until june 2010. I was in repayment from June 2010 until June 2011. I was again in deferment (started cardiology then interventional cardiology fellowship) from june 2011 until July 2016. From July 2016 onward, I am currently in repayment. All of my employers are 501c3 tax exempt, and qualified employers.
If I consolidate now into Direct Loans, will I have reached the 120 months? My understanding is that the waiver (which expires Oct 31 2022) includes “in deferment” periods prior to 2013.
Thank you.
Vinoy,
Periods in repayment will count (back to oct 2007) and time in deferment prior to 2013 will count. This means January 2013-July 2016 doesn’t count under the IDR waiver.
I counted more than 120 months in repayment July 2008-Dec 2012 and July 2016 to present.
You should have consolidated your loans in last year right after the waiver announcement, but there is still time to do it now. Consolidate your loans and complete ECF forms and submit those prior to November 1st.
Andrew SLA
Does payment verification of loan HAVE to be bank statements? Can I just export the payment history from my loan servicer AES as verification I made qualifying payments?
I would expect either to work.
Wow. I’ve mostly ignored this stuff as I’ve been working for over 15 years. However I still have loans that are not paid off as they are at 2% interest rate. I worked for about 8 years at a qualifying employer and then took another job for 2 years with a non qualifying employer. I returned to my original job about 6 years ago with the qualifying employer. Does that break from working for the qualifying employer rule me out? I suppose I could consider it from the time I returned and qualify in 4 years for forgiveness.
Hi Ano,
No, anytime you spent at a qualifying employer and made a payment of any kind should work. You’re not disqualified because of the 2 years at a non-qualifying employer. However, those 2 years wouldn’t count towards the 10 years of qualifying payments.
You’re probably well above the 120 payments, definitely apply and you should get PSLF soon and be rebated any payments you’ve made above and beyond the 120 tax free.
But make sure keep track of all the payments you’ve made to ensure the servicer rebates you the correct amount! Sounds like this is going to work out well for you!
Andrew StudentLoanAdvice
No. You should be eligible for PSLF if you meet all the other requirements. The 120 payments don’t have to be contiguous and neither does the 501(c)3 employment. Neither of those rules are new this month.
That’s unbelievable! I looked up my loans and I have two Consolidated FFELP loans. So perhaps I can consolidate those two already consolidated loans into a Direct Loan and then apply for PSLF? Not sure if that is possible. I’m concerned about losing the low interest rate if I re-consolidate and PSLF doesn’t work out.
Ano,
Yes that’s right. You can consolidate those two FFELP loans you have and you should reach PSLF. I wouldn’t worry too much about the interest rates. They just take a weighted average interest rate between those two loans and round up your interest rate 1/8 of a %. Basically no change to the interest rate. And it’s not going to matter much anyway with the minor increase in rate since you’d be eligible for PSLF.
Andrew StudentLoanAdvice
If I have multiple different direct loans do I still need to consolidate them into a single direct loan? Or is it ok to leave them as separate loans? I don’t have any FFEL but I am going to potentially benefit from the ‘late payments now count’ rule.
Hi Zachary,
You don’t need to consolidate your loans if they are already direct. They are in the correct loan status.
They say those late payments should be added automatically if you’ve already submitted an ECF or PSLF form for them.
Submit the ECF/PSLF form for those late payments if you haven’t done so. And, be prepared in case they don’t automatically do so, to dig it up and resend to your servicer.
Andrew StudentLoanAdvice
Thanks!
This probably isn’t the best place to keep having my mind blown. Not sure how many people would be in the same situation as me but for those who are. If you consolidate you lose any interest discounts from your servicer. So I anticipate that I would go from 2% to 3.375% if I consolidate to a Direct Loan. Probably worth the potential upside. The only thing I’m worried about now is the Full Time requirement. I’m an ER doc and my contract actually lists me at 0.73 FTE, I think because thats the number that qualifies for benefits. All the docs have the same contract. I work “full time” for an ER doc but there have been years when I didn’t average 30 hours a week.
Ano,
No worries. I’m sure there’s others out there who have these same questions.
Don’t think it would be that large of a jump, but it will increase somewhat.
Here’s the letter of the law directly off the PSLF cert form –
Qualifying Employment
Full-time means working for one or more qualifying employers for the greater of: (1) an annual average of at
least 30 hours per week or, for a contractual or employment period of at least 8 months, an average of 30 hours per
week; or (2) unless the qualifying employment is with two or more employers, the number of hours the employer
considers full time.
According to the current rules, those years you worked less than 30 hours averaged p/week wouldn’t count. Might be out of luck those years you worked under 30 hours. But, the other years where you averaged higher have your employer sign the PSLF form and submit to your servicer.
Andrew StudentLoanAdvice
Make sure you and your employer count EVERYTHING when signing that form. Think about it. If you’re there an extra hour after a shift, that counts. Charting later? That counts. Meetings? Those count. CME time. That counts. Holiday time that would be subtracted from a normal person’s work schedule? That counts. Reasonable amount of vacation? Same deal. 15 shifts in the ED a month is considered full-time for a reason even though 15*8/4.5 < 30. I would not let that point go. All the PSLF folks care about is that your employer signs that form saying you worked 30 hours. It's up to you to argue that you worked the equivalent of 30 hours. Those folks weren't thinking about how EM works when they made that form. The form itself says "include vacation". Seems to me you can include 5 days a month of "unpaid vacation" no?
Oops! While I have been a W2 employee my whole career, I was employed by a private group that contracted with the non-profit hospital- not directly by the hospital for the first 8 years. Now employed directly by the hospital for the last 6 years. Still, qualifying in four years is not bad. Just have to run the numbers with the higher interest rate and risk that PSLF will change again.
Ano,
Paid by a private group although working at a non-profit is currently not eligible employment. Definitely a mistake that they are trying to work through and might be resolved with longer term fixes coming next year.
4 years left and you’re at PSLF! And perhaps earlier if the change the rule on you first 8 years!
Andrew StudentLoanAdvice
Yea, the private group years don’t count. Sorry.
Are Stafford loans part of FFEL?
This news seems too good to be true.
Patrick,
Yes. There were two loan programs FFEL and Direct. FFEL went defunct in 2010.
Both issue(d) stafford loans.
Whether you agree with it or not, this is what they’ve laid out. We’re just trying to help interpret this for you.
Andrew StudentLoanAdvice
Andrew, thank you so much for clarifying! This is such great news.
Patrick,
No problem! Happy to help.
Andrew StudentLoanAdvice
I graduated medical school 2020 and immediately consolidated and waived forbearance with MyGreatLakes. Around that time, COVID hit and paused everything. I have checked back periodically and online says my account is in “Forbearance” and will not let me physically submit $0 payments. MyGreatlakes website is not very user friendly, and does not say I am enrolled in IDR (REPAYE) which I had originally signed up and received. Am I missing out on all of these $0 payments during the past year? Is there a way to easily switch providers or will everything work out once COVID forbearance is over?
Hi Will,
I would call GreatLakes today and ask them if you are receiving payment count. You might need to call a few times or ask for your question to be escalated to a manager since some of the phone reps won’t know what’s going on. You don’t want to miss out on all these months of zero dollar payments which should be counting towards PSLF.
Normally, you would have been put into repayment immediately and made $0 payments during your intern year, but COVID forbearance has definitely made things a bit more tricky and beneficial.
FedLoan was the exclusive loan servicer for PSLF and they are quitting federal loan servicing in December. The Department of Education has not announced who the next loan servicer(s) will be for PSLF. When they do, if you submit a PSLF certification form, you would automatically be switched to which ever servicer is helping borrowers with PSLF.
GreatLakes just signed a 2 year extension with the DOE so at least you have that certainty they will still be around unlike FedLoan and Navient.
Andrew StudentLoanAdvice
Navient now extended into 2023
Not surprised. It seemed as much a negotiating ploy as anything.
And Navient backs out again….
https://www.washingtonpost.com/education/2021/10/20/next-step-in-navient-exit/
Andrew StudentLoanAdvice
I’m 9 years and 3 months into 501c3 employment. I never did PSLF because my income driven repayment options always calculated zero dollars of loan forgiveness when I did the calculator at studentloan.gov.
Under the newly announced plan all my former payments should qualify, and I should be due for loan forgiveness in August 2022. If I start applying for PSLF now though, my payment plan will change and I might end up getting thrown into a much higher monthly payment amount due to my attending salary. Any reason why I shouldn’t just keep paying my existing (lower) monthly payment and waiting until August 2022 before applying for a loan forgiveness? The announcement says we have till October 2022.
If I’m understanding correctly, I’ll still be able to qualify for PSLF if I wait to apply. Agree?
Pat,
Wow, things might work out as great as possible for you given this limited waiver and the fact you must have been on lower payments the last 9 years. Assuming extended 25 year plan?
Hypothetically you could wait until then. Payments would be zero dollars until February and you’d only need to make 6-7 payments if you entered repayment now.
There may be other guidance released this next year, but i’d probably go forward with making the smaller payments until august then apply.
Andrew StudentLoanAdvice
Thank you so much for the information. Keep up the great work!
Thank you for this super valuable post!!
A couple mechanical questions. I have a Direct Unsubsidized Consolidation & a Direct Subsidized Consolidation Loan, both of which I’ve been paying off sloooooooowly using a graduated repayment since 2006 while working for now three qualifying hospitals. They total $80K (@ 3.625%).
I clicked on the PSLF studentgov page and it created a 9-page PDF for me to obtain signatures:
1) The page says “qualifying payments made: 0”
Is this just because the PSLF system has not been updated to allow for non-income based payments… Should I go ahead and submit with this?
2) Do I have to go back to my ER residency hospital to get the signature from an “Authorized Official”… Will they even have this record from 2010?
Thank you again!!
1. I would guess so.
2. Probably. I mean, they’ve got a list of graduates surely.
Can I get the ECF forms filled out by employers before I get my consolidation done? Or does the employer send them to the servicer after the direct consolidation?
I doubt the order matters, but I’m not 100% sure.
Hi Ryan,
Usually when someone completes a consolidation it is right as they begin residency. It doesn’t make sense for them to file a PSLF certification form since they have hardly any qualifying employment.
This situation is unique since many will now be eligible for PSLF via consolidation. To expedite the process you could probably do the consolidation and PSLF cert form simultaneously since both will take time. And if they don’t accept your PSLF cert forms until your loans are consolidated, just send them once your loans are consolidated. You won’t have to redo those. All it would be is resending them since you’ve already completed them.
Andrew StudentLoanAdvice.
Excellent. Thanks for advice!
Doing an ECF form retroactively requires me to send a form for each year to past employer or just one form with date range?
Hi Ryan,
Just one form for the date range you worked.
This way if you worked for 3 years at an employer you wouldn’t need to send in 3, you’d just send in 1 form and they sign off for 3 years.
Andrew StudentLoanAdvice
Does any one know if I can submit the PSLF form before I consolidate my FFELP loans to Direct Loan to make sure I qualify on the employment end of things? It appears that I can certify my last 6 years of employment just with the PSLF form. How do they know how many payments I’ve made? It doesn’t seem to ask for any of that info on the form. Is that because once I send in my form I get switched to FedLoans or do they just figure out who my servicer is and look? I had assumed there would be separate forms for Employment certification and loan payments but it appears its just one PSLF form. My current loans are on a 30 year term, so have a very low monthly payment and not sure what the terms will be on the consolidation loan. So might want to wait to consolidate next year to avoid higher monthly payments.
Hi Ano,
I’d probably submit the consolidation and PSLF forms simultaneously. Before this ruling FFELP loans didn’t qualify so there was no need to complete the PSLF form.
Check you payment history to verify how many payments you’ve made on your servicers site. You can also ask them to send you a statement of payments. Or you can find this on your bank statement.
Your servicer should share the payment information with FedLoan when you file the employment certification form. Assuming you complete this before they quit in December.
I don’t think you’ll be eligible for a 30 year payment term after consolidation. What we know now is there are 4 qualifying repayment plans and they’re all IDR – ICR, IBR, REPAYE and PAYE. They may change qualifying repayment methods but it remains to be seen.
Guess you could wait to until next year when they likely come out with permanent changes to PSLF.
Andrew StudentLoanAdvice
Thanks for all your help on this! I think I’ll go ahead and consolidate and submit PSLF in early 2022 after I can certify 7 years of employment and will have time to have the consolidation go through.
Ano,
No problem. Sounds like a good plan. Best of luck to you
Andrew StudentLoanAdvice
Another wrinkle for anyone following this. It turns out to qualify for TEPSLF (temporary expanded PSLF ) you have to have a previous 12 months of payments that equal the what you would have paid under ICR.
From the site:
* met the TEPSLF requirement for the amount you paid 12 months prior to applying for TEPSLF and the last payment you made before applying for TEPSLF to be at least as much as you would have paid under an income-driven repayment plan
I currently pay less than I would for an IDR so would need to consolidate and then pay for 12 months on an ICR before applying for TEPLSF. It appears TEPSLF ends when the money runs out. That also means I risk the money running out before I get the next four years of employment certified.
I think I’m mixing up two programs. Sorry, doing a lot of reading and get down the occasional rat hole
Ano, I was reading that on the StudentAid.gov website, too. If I’m on a 25 year repayment plan (which is not “at least as much as you would have paid under an income-driven repayment plan”) then do you think I can still qualify for PSLF? Did the new TEPSLF eliminate that requirement or would I have to do an income-based repayment plan for the next 12 months to meet that requirement and then apply for it (assuming there’s any money left)?
I think TEPSLF is a different program. What we are looking as in the new PSLF. Not entirely clear to me either though.
Under these new rules will previous payments that were made late or while In forbearance count?
Yes.
Do you have a reference point for this? I have not been able to get a clear answer on this. I know that ED’s press release and FAQ calls out military forbearance as counting (regardless of whether any payments were made during that time). But I have not found anything indicating that payments made during forbearance will be counted in any other situation.
I suppose I haven’t heard anything that specifically said that now that you mention it, but it does say payments made under ANY plan count. You made payments under some kind of plan, so they should count, no?
DH,
On the FSA announcement, it states:
“Under the new rules, any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment.”
It depends on if you were working full time at a qualifying employer and making payments during forbearance. If you were, the waiver says it should count. Most in forbearance (not covid forbearance) don’t make payments and thereby wouldn’t receive count.
Andrew StudentLoanAdvice
Yes, my gut reaction to the waiver announcement is to interpret it the same way.
The argument against it that I have seen elsewhere is laid out in the “PSLF Waiver Summary and FAQ” put out by The Institute of Student Loan Advisors. (I have not had a chance yet to identify the source of their interpretation). In their summary, they state that the waiver is to be implemented by looking at the repayment STATUS of the loans, so essentially any time that you are a) under qualified employment, AND b) on a repayment plan (regardless of type) will be counted. And any months that you are not under a repayment plan (e.g., deferment or forbearance) will not be counted, except for the case of military forbearance.
In my case, I have had at least three periods of forbearance during my qualified employment: an economic hardship forbearance, a bankruptcy-related forbearance, and a forbearance while having my servicer and payment plan changed. The bankruptcy related forbearance was the longest period and as part of the court-approved payment plan a portion of my payments went to my student loans throughout the plan.
Had $50k Direct loans from college; none from med school, was HPSP, graduated in 2004.
Direct loan consolidation at 2.25% in 2004; began payments on 30 year plan (clearly I needed WCI in 2004).
Entered into active duty for residency immediately after graduation in 2004. Remained on active duty until 2019. Made approximately 180 Monthly payments during 15 years on active duty.
Seems like this should qualify for forgiveness of my balance (still >$20k) and perhaps a refund of 60 of the payments?
My main worry is having my employment certified by military officials who will likely have no interest in helping me, even if I could get back on a base.
I just mailed in my employment cert form, with section 4 blank, along with my DD214 and a memo explaining my situation. Hopefully that will work…
Hi JS,
If you made 180 payments with direct federal loans, 60 of those payments should be rebated back to you and your outstanding loan balance would be forgiven tax free through PSLF.
Hopefully you still have a contact in the military who can certify your employment.
Andrew StudentLoanAdvice
An update to the above:
-My initial form was sent back. They did not accept my DD-214. Big surprise!
-I asked an old friend still on active duty (and now chief of the clinical service) to sign to certify employment. This was submitted in November.
-Just last week (mid-March) I got a letter from Fedloan that my certification was accepted!
-loans now being transferred from previous servicer to Fedloan to verify each of my payments
-They estimated another 30-60 days until forgiveness/refund.
Will keep you updated. Fingers crossed!
Doesn’t it look like excess payments over 120 made on FFEL loans will *not* be refunded, only those made on direct loans? The Dept of Ed website FAQ on the waiver, while not strictly ruling out FFEL rebates, specifically refers to a refund on *direct* loans:
“If you made more than 120 payments on an existing Direct Loan, you will automatically receive a refund for the qualifying payments you made in excess of 120.”
The PSLF megathread on Reddit also concludes that *only* direct loan overpayments will be refunded. I guess you never know, but unless you know something we don’t it seems likely those of us with FFEL loans will need to content ourselves with the forgiveness alone, no refund.
Chris,
I’ve been hearing the same.
Hope this is treated differently for many of you out there who’ve made more than 120 payments on FFELP loans. But it appears you will be granted PSLF but no payments rebated above 120.
Andrew StudentLoanAdvice
Have made > 120 on-time payments to my FFEL loan, and still owe ~$19K.
I never applied for PSLF bc I did not qualify. This changes the ballgame.
I've worked for the same 501c3 for the last 10 years. My original FFEL rate is 3.25%. Consolidating bumps my rate up to 3.5%. Any advice on which repayment plan to choose when consolidating into a direct loan? Seems moot if it will be forgiven?
I wanted to echo the concerns of "Ano" about losing the low interest rate if I re-consolidate and PSLF doesn’t work out. There seems to be a lot of language insofar as "your loan may qualify" on the application. Same concern goes for my wife, who owes a lot more than me: $170K @ 2.5%
This is my first time back to the PSLF website in many years. The online application for PSLF prompts me to consolidate my FFEL. Once that is complete/approved, then I go back and apply for PSLF, or does this happen automatically? I want to minimize the number of new payments at the higher consolidated interest rates.
Josh,
Assuming your employment qualifies and you’ve made 120+ payments, this is a green light for PSLF and you shouldn’t worry about your interest rate being rounded up 1/8% since your loans would be forgiven tax free.
Pick an eligible repayment plan like PAYE or REPAYE. Again, another moot point since your loans should be forgiven immediately.
While the consolidation is going through, you need to file a PSLF certification form to certify your 10+ years of employment. I would do these simultaneously to try to expedite the process.
Andrew StudentLoanAdvice
I graduated in 08/15/20, started at a non-profit on 09/01/20, and immediately certified employment for PSLF. I only have direct loans and did not consolidate. I am enrolled in PAYE and made minimal monthly payments during the 6 month grace period. Will my grace period payments count? The announcement states that “Any prior payments made while working for a qualifying employer will count as a qualifying payment, regardless of loan type or repayment plan.” If so, what do I have to do to make these payments count? If my grace periods payments will not count under the waiver, if I consolidate prior to 10/31/22 will that allow my grace period payments to count?
Hi C Stewart,
Prior to the waiver change, unless you completed a direct federal consolidation and opted out of the six month grace period, you would automatically move into forbearance for six months until the grace period ended.
Now given this limited waiver and the fact you made payments, my interpretation is these payments count whether you consolidate your loans or not.
This is something your loan servicer should be able to verify since they have a record of your payments. But I would call them just to make sure they keep track of these payments. This will definitely come up when you file your PSLF cert form.
Andrew StudentLoanAdvice
Great info – thanks, Jim and Andrew. Graduated in 2006, active duty military since, consolidated into FFEL in 2006, making payments at 1.87% interest. So, I need to consolidate into a direct loan. However, when I go to the link to consolidate, I’m asked to pick a new loan servicer. They recommend PHEAA, since they service PSLF. The problem is that I saw they have terrible reviews and their contract expires in Dec 2014 and will not be renewed. Should I pick my current servicer (Nelnet) or go ahead and put PHEAA since I plan to apply for PSLF? Lastly, I’ll likely be forgiven the remaining balance but won’t be refunded all payments over the 120, correct? Thanks again!
2014?
No idea on the servicer question. I’d probably call.
Duh! Sorry – Dec 14th, 2021
Brandon,
Just go with FedLoan since they exclusively service PSLF. When they are offboarded you’ll end up being assigned whoever the next servicer is for PSLF.
I don’t believe you will be refunded any payments you’ve made above the 120 if they’ve all been made on FFEL loans. That’s currently only the case if you have made overpayments on direct federal loans. I’d love to be wrong though.
So if you made 180 payments under the ffel, then consolidated to get this waiver you would not get a refund. But if you made 60 payments under the ffel, consolidated into direct loans, then made 80 payments you would get a refund of 20 payments.
Andrew StudentLoanAdvice
Andrew StudentLoanAdvice
I am active duty military on PSLF. I have 12 payments that previously did not count because I had been on forbearance during a couple periods of time. Per your description all 12 of these payments would count because I was on active duty. I have called FedLoan Servicing twice and the representatives fielding calls have no knowledge of how the PSLF waiver is supposed to work nor that there is a military provision to the waiver. Does anyone know how long it will be for this waiver to be implemented and this information pushed out to FedLoan Servicing so that they can actually credit me these additional 12 payments? This will get me forgiveness in July 2022.
No. Nobody knows. I’d expect 1-3 months honestly.