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.
† Bonus includes cash rebates and value of free course. Borrowers who refinance more than $60,000 in student loans using the WCI links will be enrolled in The White Coat Investor’s flagship course, Fire Your Financial Advisor for free ($799 value). Borrowers will still receive the amazing cash rebates that WCI has negotiated with each lender. Offer valid for loan applications submitted from May 1, 2021 through October 31, 2023. Free course must be claimed within 90 days of loan disbursement. To claim free course enrollment, visit https://www.whitecoatinvestor.com/RefiBonus.
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!
So 2 of my 13 loans were FFEL (the rest were direct). I’m due to hit 10 years for PSLF in 3/2023. It sounds like if I consolidate those two loans, they should be on the same track to have 10 years of payments at the same time.
However, when I attempt to consolidate these two loans, and I enter my current income, (it’s significantly higher than my income was during Residency), I no longer qualify for the IBR, which capped my payment. Under IBR, I was paying about $200 a month for those two loans. Under the new income based plans, the payments would be substantially more, as the cap is much higher. One option it gives me is that I could change it to one of those long term 25 year loans, which would be about $300-400 per month. But would those monthly payments qualify for forgiveness after October 2022? I would still have 5 more months of payments after October 2022. All the documentation talks about how any previous payment plans will count, but what about future payment plans? Should I wait until the last month to consolidate, so I can continue paying the $200 for as long as possible, and then switch to an income based payment that is substantially higher for the last 5 months, but will more certainly count as a PSLF qualifying payment plan?
Hi Michael,
There is no clear direction on what a qualifying repayment plan will be after Oct 2022. For now, we assume you need to be on an income driven repayment plan.
Since the low payments will count until Oct 2022. I’d probably wait to consolidate until a month or so prior and enroll into a qualifying IDR plan to collect the 5 remaining payments you’d need to PSLF.
Andrew StudentLoanAdvice
I am in the same boat in terms of potential forgiveness timeline. I used the https://studentaid.gov/loan-simulator/ “Loan Estimator” to see what my monthly payments would be if I consolidate now under an IDR plan. I’m only eligible for REPAYE (about $8,000/month and loan paid off well before potential forgiveness date – no thanks) or ICR (about $1,000/month, more than double my current payment). So, I think I will wait to consolidate.
$8000/ month is really high on those plans. Mine is like 2900 and I have what I feel to be a good job. If you have an income driven repayment of $8000 it sounds like your income must be high enough to pay off your loans flat in 2 years anyway, unless you know like $1 million in loans? I’m not sure of your situation of course, but forgiveness doesn’t sound practical if you have so much discretionary income that 8 grand is your monthly payment…
Consolidated 20 years ago and making monthly direct loan payments every since. I’m about 5 years “ahead” because of overpayments consistently on graduated repayment plan (also still made payments during a one-year auto deferment during additional school in 2012, no new loans). Just applied and worried they will not count the last years of monthly payments since technically $0 billed each time. Thoughts?
Additionally, ACS sold my loan after they went defunct- in 2012. Now with EdFinancial- when I log into their site or studentaid.gov the payment history starts in 2012 for that reason. They don’t allow the borrower online access to the loan payment history prior to that. Will they be obligated to provide this to Fedloan when they review my app?? That’s 5 y of payments (2007 when PSLF started to 2012 when my loans were transferred) that I’m afraid they don’t have good (or any?) record of. Thanks for the article and the help!
I think you’re right to worry. Do you have any records like bank statements?
Not immediately available, but I’ve been with the same bank since then so I could probably (maybe?) locate them with some effort. I placed a request to get the full history sent to me from EdFinancial. Seems crazy they are not obligated to share this.
Hi Elizabeth,
When file your PSLF cert forms, your servicer should be able to look back at all your past payments and employment to validate your payment count. You definitely have made more than 120 payments and should be rebated any payments above 120 you’ve made in addition to receiving PSLF.
I wouldn’t doubt they come back with mistakes on your payment count and would encourage you to dig up payments records wherever you can to ensure they don’t miss any payment you’ve made. Whether this be bank statements or payment statements from the loan servicers you’ve had.
Andrew StudentLoanAdvice
Thanks so much for great info and helpful responses. Really appreciate it!
Thank you! I’m seeing all kinds of conflicting info about paid ahead status though. The 2020 changes on lump sum don’t help me because I’m so far ahead in “due date”- what is the status of these payments for the limited waiver announced Oct 6? Do monthly payments made when there was technically no payment due now count? The last status I see on Studentaid.gov for me is 2013, “in repayment”. But my next payment isn’t due until 2026. Can I try to apply all the overpayments now retro so that they count for forgiveness?
I don’t think payments that were not due ever counted or ever will. You can’t just make 120 payments in your first month and then get forgiveness in month two. You have to make 120 payments, one a month for 120 months.
Not sure if I’m not explaining it right- I have paid for 20 years but so many were overpayments that the last 5 or so years are all in paid ahead status/0 “due.” I made well over 120 separate monthly payments not in forbearance or deferment, just many of them were paid ahead.
Why aren’t your overpayments going to principal? Why are they being turned into future payments?
I have no idea how many of your payments will count, but I wouldn’t expect more than one per month to count.
I know how dumb this sounds but I’m honestly not sure! I know when I called years ago to request they go to principal, the servicer basically said, they will be— but I’ve had this zero monthly bill for so long I’m just not sure. The only think I can think is that paying through the one year deferment I had while in school again in 2013 put me ahead and I’ve been ahead ever since? But my payment history is really clearly one payment per month- since I started. I know how busy everyone is, I don’t mean to monopolize your site- really appreciate the responses.
Why not call them, ask them how many payments they think you’ve made, and only worry about it if their count is dramatically different from yours?
They’re supposed to count those.
Thanks for great information. Two questions:
1) My consolidated FFEL loans were sent to a new servicer several years ago. Old servicer (Great Lakes) says they can’t provide prior payment history. New servicer (Nelnet) says that they will try, but they didn’t sound optimistic. Other than consolidating and applying for PSLF, is there a way of obtaining a count of qualifying payments? If I learn that I have a couple more years of payments to make, I’d rather wait to consolidate until next fall (as the new qualifying payment plan will be much more expensive than current plan). But if they believe I’ve made >120 qualifying payments then I would prefer to consolidate and apply for PSLF now since I’m FFEL and wouldn’t be eligible for refund of payments >120.
2) Would payments made by NIH Loan Repayment program count as a qualifying payment? What if they were made during a period of forbearance? If no, is it possible to retroactively remove a forbearance (back to 2011) with the original servicer? The NIH LRP payments were larger than a typical monthly payment. At the time, our servicer counted them as prepayments of principal and interest. So when we went into repayment, our monthly amount due for a long time was $0 — and unfortunately we didn’t make additional payments. Would those months where we owed $0 count as a qualifying month?
Thanks very much for the help.
Al,
1.) I’d wait to see what payments your servicer validates then decide. If you’ve reached 120+ consolidate, get PSLF now. If you’re less than 120 wait until the fall.
2.) If the NIH sent money to you and then you used it to make your monthly payment, then yes. I’m not sure if it would count if they made a payment on your behalf. I’ll do some research and get back to you on that. I don’t believe in the past you could make a lump sum payment (say for 12 months of payments) and have those qualify. Though they did change the rules on lump sum payments recently (below). I’d definitely try to have those qualify if they allow payments made on your behalf count toward PSLF. I don’t believe they’ll allow you to remove a past forbearance period.
Changes to PSLF lump sum payments — https://studentaid.gov/articles/see-whats-new-pslf-program/
Andrew StudentLoanAdvice
Thanks very much!
Following up. I count 74 months where I made payments. This was preceded by 47 months that were covered by 8 lump sum payments made by NIH LRP (the first 2 years of which I was in ‘forbearance.’). These were treated by servicer as prepayments. I’m still not sure how I can find out if these would be qualifying payments without first consolidating the loan. It seems that my count could be as low as 74 or as high as 121. Any thoughts on how to figure out a path forward?
Hi Al,
For the prepayment ( or lump sum) to qualify for subsequent months, you must pay an amount to fully satisfy future billed amounts for each month you wish to prepay within a 12-month period;
make one or more prepayments that pay your loan ahead (if you are on an IDR plan, you may not prepay past your next annual recertification date— your annual recertification period is the 12-month time period when your payments are based on your income); and
have qualifying employment that covers the due date for each month you prepay.
Next steps
-Consolidate your FFEL loans, fill out employment certification forms (ECF) for past employment and submit ECF to loan servicer.
-Pull past payment history from your servicer or download bank statements. Also keep a record of the NIH LRP payments.
Andrew StudentLoanAdvice
Thanks for the great article, I’m sure you are swamped with questions, but I’d love to clarify my own situation as well. I have two direct loans, one subsidized and one unsubsidized. I started paying back in January 2012, and have since been employed at a 501 C3. I think that gets me in a good spot for forgiveness very soon. Do I need to do anything extra to get credit for zero dollar payments during the pandemic if on fedloan they are stated to be in “forbearance” during covid?
No, those are supposed to be automatic.
It’s a good question! I’m in nearly the exact same position…
The last 18 months of $0/payments during covid forbearance would push me over the top of 120, but I can’t figure out if they count toward the 120.
Brad,
Yes those count as long as you were in repayment prior to entering COVID forbearance.
Andrew StudentLoanAdvice
I consolidated all my loans, federal, ffel, perkins and private in 2003, as encouraged by my school in order to receive the best interest rate. I started paying on an IBR plan in 2007. In 2015 I began working for a non-profit and applied for PSLF, only to be told that I didnt qualify because of my loan type, not being a Direct consolidated loan. My loan servicer, Navient, told me I would have to go back to school and take out a federal loan to be able to consolidate my loan into the Direct loan consolidation. I did not take that route, I am not interested in acquiring more debt for school. My question is, can I apply now to consolidate into a direct loan consolidation just for the purposes of applying for PSLF under the new waiver, without taking on new loans or am I just out of luck? I still have 4 more years of employment to go before I would reach 120 payments. There wasnt a direct loan consolidation option in 2003!!!!
Hi Melissa,
I don’t know if your private loan(s) was consolidated with your federal loans. If it was, then I’d assume you privately refinanced. But that doesn’t seem to be the case since you’ve been in IBR.
Your federal loans which you consolidated in 2003 are probably FFEL loans. If you have two (or more) FFEL loans you can consolidate them into a direct consolidation loan. Once consolidated, your payment history will count towards the 120 for PSLF assuming you’ve had qualifying employment since 2015. Then 4 years until you reach PSLF.
Andrew StudentLoanAdvice
Thanks so much for your response!
I had federal, ffel, perkins and private loans that were consolidated into two loans, with one payment, labeled J – FFELP.
How do I figure out if my consolidation is considered private or not? I’ve currently had to pay on my loan all through COVID as my loan didnt fall under the governments payment pause…..
I tried to apply for PSLF in 2016 and was told I wasnt able to consolidate this loan into a direct loan, because it was already consolidated – so my question really is now, can I consolidate that loan now into a direct loan under the waiver
Melissa,
I’m not positive on what the J FFELP loan is. If this was a loan that is a consolidation of federal and private loans on the surface this sounds like a loan no longer eligible for the federal programs such as PSLF. I’ll do more digging on this point.
But, I’d expect more to come on these next year when supposedly more permanent changes are coming for PSLF.
Have you tried to consolidate them again since the new waiver was released last week?
Not yet, I just completed the PSLF certification form to see what the response is, they will likely respond that I have the wrong loan type and let me know if I can consolidate just for the purpose of qualifying for PSLF under the new waiver. I tried calling with no luck getting through to a rep. You mentioned not being able to be on an IBR plan if my loan was private, but I am and have been on this plan since 2007, however when the interest rate went to zero for COVID, my loans were not included. and I was still paying….so I am really not sure what type of loan I have, federal or private….
Melissa,
The FFEL loan is a federal loan. You should be able to consolidate it into a direct federal loan and your past payment history will carry over.
All payments made while working full-time at a qualifying employer will count.
Andrew StudentLoanAdvice
This is almost exactly where I am except 2004. My research and all the help here says yes you can but have to consolidate by October 2022. However your interest rate will increase as I think I have 1.25% in rate rebates from Navient. I also have four years to go. Your monthly payment will go up as well but there is calculator on studentaid.com that helps figure it out. Have to run the numbers based on how much will be forgiven.
Ano,
Correct. When you consolidate your student loans it will take a weighted average interest rate of the loans consolidating and round then up 1/8%.
But remember, if you’re going for PSLF it doesn’t matter if the interest rate increases slightly. You’ll get it all forgiven in the end anyway.
Andrew StudentLoanAdvice
Ano, was your response to me? I hope it was because I like your response! BUT I am not sure if they will allow a consolidation on loans that were already consolidated, although I make one payment, there are actually two separate consolidations, both at a 2.75 interest rate, .25 off for auto pay. EVEN THOUGH there were federal loans in that consolidation. If I am not able to consolidate to qualify, I wonder if I did take up a few courses and apply for aid or take out a private loan if I would be able to consolidate say after spring and then qualify and have all my previous payments since 2015 counted. It’s appears to me that loan made prior to 2007, or even 2014 have different rules and repayment terms and it’s so stressful! I tried to contact Navient to ask if I would qualify for consolidation, waited on hold for 25 minutes and then the call dropped on their end – beyond frustrating! I’ve always had trouble understanding their reps who don’t speak English clearly and have been provided mis-information on numerous occasions.
Melissa,
If you have two federal loans which have already been consolidated, you should be able to consolidate those two together (complete an additional consolidation) and like I stated above the interest rates would be rounded up slightly. 2.75% would be rounded up to 2.875%.
Don’t think you need to take out another loan.
Andrew StudentLoanAdvice
Melissa, just to fix a mistake its studentaid.gov not .com. I also have two FEL consolidated loans and have been working at a non-profit for 6 years. Actually much longer but the first 8 years don’t count cause I worked for a private group contracting with the non-profit. My understanding is that you can re-consolidate these to a Direct loan initiating it from studentaid.gov and then applying for PSLF after 120 payments as they now count the FEL payments. I suppose worst case is the consolidation doesn’t go through and then we are back to square one. I haven’t seen anything that would exclude our situation, but let me know if you do.
Ano – I found this information today while looking over the consolidation information on the FSA site –
G. I may consolidate an existing Federal Consolidation Loan without including an additional eligible loan in the consolidation if I am:
“Consolidating a Federal Consolidation Loan to use the Public Service Loan Forgiveness Program”
This IS different language than what the prior application stated that you “had to have another qualifying federal loan to consolidate with an existing FFEL consolidation”. They must have updated this after my initial question on this site.
I’m waiting on them to verify my employer again before I submit my consolidation request, but it seems like we may be in luck with this change to be able to now consolidate into the Direct loan and eventually apply for forgiveness.
I was also able to find my loan type after a bit of searching – J Unsubsidized Federal Consolidation Loans
I’ll post an update once I complete the consolidation application. Fingers crossed!
Ano – My concern with the consolidation comes from this statement in this article – 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.
I’m just hoping that we will be able to re-consolidate into the direct loan for purposes of PSLF. I understand it as the consolidation has to occur prior to 10/2022 in order for the past payments to count.
My loan type is J, FFEL consolidation. I am having my employer fill out the PSLF form today and I’m going to send it in to see what the response is regarding my loan type. I’ll post an update!
Melissa,
Correct. If you private refinanced your FFEL loan(s) it would not be eligible for PSLF.
Andrew StudentLoanAdvice
Not yet, I just completed the PSLF certification form to see what the response is, they will likely respond that I have the wrong loan type and let me know if I can consolidate just for the purpose of qualifying for PSLF under the new waiver. I tried calling with no luck getting through to a rep. You mentioned not being able to be on an IBR plan if my loan was private, but I am and have been on this plan since 2007, however when the interest rate went to zero for COVID, my loans were not included. and I was still paying….so I am really not sure what type of loan I have, federal or private….
Melissa,
The servicers are swamped right now. I’d keep trying.
Well, perhaps it is federal than if you’ve been in a federal repayment program.
Andrew StudentLoanAdvice
One more question, sorry! It seems clear payments made while in default won’t count here, from what I have read. But what about payments made during (non-covid) periods of deferment or forbearance?
Elizabeth,
They don’t provide specifics if payments made during deferment or forbearance count unless you did so because you were in the military. In which case, those will count.
For now I’d assume they don’t count. However, they mentioned as part of long-term improvements to PSLF they will be discussing ways to make it easier for borrowers to progress towards forgiveness who had certain types of deferments and forbearances. Which means deferment and forbearance periods counting towards PSLF.
Here’s the article if you want to read up on it more: https://www.ed.gov/news/press-releases/fact-sheet-public-service-loan-forgiveness-pslf-program-overhaul
Andrew StudentLoanAdvice
Thank you! It looks like paid ahead status could make all those payments ineligible under PSLF and TEPSLF. Does the waiver explicitly make them eligible or do I need to go back and ask my current servicer (loan hasn’t transferred to fedloan yet) to remove paid ahead status and apply those payments now to count for forgiveness? Does it matter that my ECF was dated before this (assuming I need to retro the paid ahead status back to current)?
Elizabeth,
It doesn’t specifically mention paid ahead status. But they are trying to apply any payments you’ve made at a qualifying employer. Even if payments were late or partial.
No I don’t think your ECF status or dates will change your paid ahead status. That needs to be sorted out first. Then complete an ECF for each employer(s) to validate employment and have those payments count towards loan forgiveness.
Andrew StudentLoanAdvice
Clarifying question.
If I had perkin loans in the past and everything (including perkin loans) is now consolidated, how would this affect me? I looked into the details but having a hard time understanding. Thank you.
JB
If it was consolidated into a direct loan, it’s been eligible for IDR payments and PSLF.
In year 1 of residency (i.e. intern year), I worked for a public university, which counts towards PSLF. I had $0 “payments” because I was on income-driven repayment (IDR), as my previous year’s income was $0. The servicer marked this period as “forbearance.”
Would that 1 year count towards PSLF’s 10-year working-for-a-public-institution requirement?
Thank you!
Yes. The servicer needs to correct that and give you 12 more payments.
I’m a bit confused about the “time limited” nature if our 10 year plan lasts beyond 2022.
I am currently enrolled in PSLF and am on schedule to receive forgiveness in 2028. I made 7 payments in 2017 (after graduating and starting my eligible position), then was prompted to consolidate my loans, at which point my ‘clock’ was restarted. So I just received an email that these 7 payments will now be counted again due to the time-limited waiver.
However, these 7 payments are not enough to get me to my 10-year point, since I’m still at the relative beginning of my PSLF schedule. Based on what I’m seeing, it’s unclear if that waiver disappears, so to speak, after its expiration date of October 2022. In other words, if I’m still in repayment, will these 7 just be erased again? Or is this just the deadline to file your paperwork and get your ducks in a row? What happens after October 2022?
My understanding is your 7 payments will count forever.
Aly,
Your payments pre-consolidation should be added automatically to your payment history and stick with you moving forward as you continue on track to PSLF.
Andrew StudentLoanAdvice
I consolidated my loans in 2015. They are now labelled under two headings in my account with Fed Loans (who is my loan servicer). They are labelled DIRECT SUB CONSOLIDATION LOAN and DIRECT UNSUB CONSOLIDATION LN.
In the article above under the heading “what should I do about PSLF changes” you wrote, “1.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.
Is there any point in seeing what the original loans were labelled under if they are currently in an account that states they are direct loans? If a portion of the original loans was a Perkins Loan or some other non-direct loan, would PSLF not cover that portion of the original loan? Thanks for your help.
Hi Scott,
If you had a perkins or other non-direct loan, prior to the consolidation those would all be eligible for PSLF since you have already consolidated them into a direct consolidation loan.
Another point to make is if you made payments on your perkins or non-direct federal loans prior to your consolidation in 2015, those old payments would now count towards the 120 required for PSLF. Just need to certify the employment using a PSLF cert form to have them counted.
Example, if you began paying in 2013 on your FFEL and Perkins loans and paid for 2 years until you consolidated them in 2015, in the past your payment history would be erased. Now, with the waiver in place, your old payments prior to the direct federal consolidation would count. As long as you had eligible employment.
Andrew StudentLoanAdvice
I have direct loans which are already on track for PSLF and I should have 120 payments in 12 months, but I also have Perkins, FFEL and grad plus loans for which I’ve only made about 2 years of payments. Can I consolidate all these loans into one, and if so, how will the # of the payments left for PSLF be calculated? It’ll be nice if I can consolidate the other loans with my direct loans and be done with PSLF next year but I know that’s probably wishful thinking.
Or can I only consolidate similar groups of loans together e.g. Perkins loans will be consolidated into its own group, as well as FFELP and the Direct loans will be separate?
I am also curious about this situation. Will the Perkins, FFEL and grad plus loans be discharged in 12 months as well?
Sean/Lance,
Good question. There is still no guidance on how it shakes out if for example you consolidate your loans with 2 years with your loans with 9 years and it brings all your loans up to 9 years.
I don’t believe this will end up happening and you’ll still have 8 years remaining on your Perkins/FFEL/GradPlus. But if this wasn’t the case, this would be a huge benefit.
Andrew StudentLoanAdvice
Graduated 2006, consolidated direct/Perkins/FFEL into one FFEL later that year, active duty military ever since. Based on this amazing article I applied for consolidation into direct loan. Question – I opted for the standard repayment plan, which it gave me the option to choose. In the application language, it stated only IDR options are eligible for PSLF. Is that information simply not up to date for the Oct 6 2021 limited waiver? Should I proceed (since it doesn’t matter) or select a different repayment option?
Huge thanks again to Jim and Andrew!!!
Any particular reason you don’t want to use an IDR?
But the standard repayment plan has always been eligible for PSLF so I don’t see why that would be an issue to use it.
Hi, Dr Dahle! For some reason, the standard repayment option offered the lowest estimated monthly payment. That’s why I chose it. I was paying $233/mo, estimated $187/mo after consolidation.
Interesting. I would expect PAYE to be exactly the same as it is capped at the 10 year standard repayment amount.
Brandon,
If you’ve already reached the 120 PSLF mark, selection of repayment plan won’t matter. Pick the repayment plan with the lowest monthly payment and wait for your loan forgiveness to come.
If you haven’t reached 120 payments, enroll in the lowest monthly payment in an eligible repayment plan PAYE, IBR, REPAYE, ICR or standard 10 yr repayment.
Andrew StudentLoanAdvice
I made significant payments on my Direct Loans while in grace periods and for two years while in deferment prior to signing up for an IBR plan and while working for a qualified employer. Do you know whether these will count toward PSLF with the new waiver?
I would think so but I’m not sure anyone is really clear.
Hi Jodi,
Payments made in grace period don’t count towards PSLF. Deferment may end up counting with the recent waiver, but in the past payments made in deferment don’t count towards PSLF.
Andrew StudentLoanAdvice
I am currently not in PSLF, but will qualify for forgiveness in 2023 if I consolidate.
I am getting conflicting info on whether the newly consolidated loan needs to be on an IBR payment plan OR if the 10-Year Standard Repayment Plan will now qualify for PSLF. I don’t want to do and ineligible wrong type of consolidation and ruin PSLF forgiveness under the new waiver.
Can anyone consolidate to the 10-Year Standard Repayment Plan and still quality for the waiver?
Per studentaid.gov website: “Projected Loan Forgiveness for PSLF: Under the Public Service Loan Forgiveness (PSLF) program, you may qualify for forgiveness of the remaining balance due on your William D. Ford Federal Direct Loan (Direct Loan) Program loans after you have made 120 qualifying payments on those loans while employed full-time by certain public service employers. You must have made 120 separate monthly payments after Oct. 1, 2007, on the Direct Loans for which you are requesting forgiveness. In general to have a loan balance after 10 years, the 120 required payments should be while making reduced monthly payments under an Income-Driven Repayment plan. However, PSLF qualifying payments can also be made on a 10-year Standard Repayment Plan or any other Direct Loan Program repayment plan where the monthly payment is at least equal to the monthly payment amount that would have been required under the 10-year Standard Repayment Plan.”
That’s not a change. The 10 year standard payment has always been eligible for PSLF. Your quote confirms that, no?
I think so, but under the previous rules no one would have done that because the loans would have been paid off by 10 years (and therefore no forgiveness). That is what was confusing to me.
CC,
The point the federal site is trying make is if you enroll in the standard 10 year payment plan and are on track to PSLF, in 10 years time there will be no loans to forgive. Assuming you stay in the 10 year payment plan for 10 years straight.
In your situation since you’ve already made 8 years of qualifying payments, pick a qualifying repayment plan with the lowest monthly payment. Whether this is the standard 10 year, REPAYE, PAYE, IBR or ICR.
Andrew StudentLoanAdvice
Comment on “Special Benefits for Military Members to Enroll in PSLF”
In general, military docs enter their doctorate program having an agreement with the DOD to serve for a contracted period of time for free education (the agreement is more complex). Certain agreements even include officer monthly pay while attending school. If a military doc joins the military post doctorate program, then they do not receive the benefits listed above as other military docs.
I appreciate that you “like” military folk. But, your comment of “this change irks me” is inappropriate and does not provide clarification or context for the different scenarios on how docs join the military. For instance, a military doc joint post doctorate. Therefore, they missed out of 3-4 years of receiving monthly income and BAH (basic allowance for housing) during school because they were not commissioned prior to starting school. Maybe the military had a quantity limit to accepting applicants. Maybe the military member do not know they wanted to serve at that time. There is a multitude of scenarios.
There are many military docs that would rather have had monthly income and BAH while in school in lieu of receiving credit on forbearance IDR payments and possible credit back on current IDR payments eight or nine years later.
Also, please imagine consolidating loans and applying for IDR while deployed or stationed at a location with limited phone/internet/mail services. People use forbearance for other reasons beyond trying to skate the system.
From article…
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.
If they chose the income and BAH instead of collecting IDR payments until PSLF, then they ate their cake. Now they get to have it too. Meanwhile those military docs who chose to go for PSLF, passing up on that income and BAH, are not getting the same benefit. I’m not sure why you’re having trouble seeing that as not being fair.
White coat investor online content and books have been extremely helpful!
I was active duty Military doctor from 2010-2020 (over 10 years). loans were deferred for active duty status.
only a few payments made early on but still significant amount of direct loans outstanding and the 10 years of active duty counts even if payments were not made?
does this situation still qualify?
Hi JW,
Yes. Active duty military counts even if you didn’t make payments. Those 10 years would qualify for PSLF.
Andrew StudentLoanAdvice
I don’t see why not. Congratulations!
Since student loans were suspended following my graduation, I made no scheduled payments because at the time I was not interested in PSLF. Similarly, I did not consolidate for that reason as I didn’t need to make ‘early payments’ to squeeze in a few more months.
Now that I am interested in PSLF, is it too late to retroactively make payments that qualify? From graduation, I missed around 16-17 months of payments IF I had consolidated. Less since I didn’t.
Thanks!
ASDF,
Did you ever enroll into a repayment plan after your six month grace period? If you did, you would only lose out on the six month grace period right after graduation and would have 10-11 payments.
If you haven’t enrolled in a repayment plan since graduation you’re probably out of luck receiving any payment count.
Andrew StudentLoanAdvice
According to the PSLF help tool, I have 10 loans, 7 of which are mixture of Direct Unsubsidized and Subsidized loans. I’ve been paying on those loans for about 9.5 years. I also have 2 FFEL loans that I’ve been paying on for about 17 years! Should I follow the advise of the help tool and consolidate all of them? If so, will I get credit for 17 years or 9.5 years? Will I have to pay 5 more payments on the Direct loans? Will my loans be forgiven under PSLF?
Hi Mary,
Just consolidate your FFEL loans. Your direct loans are in the correct loan status and will reach PSLF soon.
On your FFEL loans you wouldn’t receive 17 years of credit. PSLF payment credit would go back to October 2007 when PSLF was enacted. Prior service/employment to that time wouldn’t count. But, you could still have ~14 years of payments.
There isn’t any guidance on if you consolidate together your FFEL loans with 14 years count and direct loans of 9.5 if they will just round them all up to 14 years and you’d reach PSLF right away. It’s doubtful they would do this.
Plan on making that last half year of payments in a qualifying repayment plan for your direct loans.
If you’ve fulfilled all the PSLF requirements you should be granted tax free loan forgiveness via PSLF.
Andrew StudentLoanAdvice
Yes! These changes are for you! Those FFEL loans should go away after you consolidate them. If you’ve been paying on the direct loans for 9.5 years, you should only have to pay for 6 more months before you’re eligible for PSLF.
I have been online all day. Went studentaid.gov website, checked my loan, they were not eligible , suggested I apply for consolidation, called website to clarify info was referred to Fed Loan to ask questions as I filled out the application to consolidate, was instructed to pick Standard Repayment and PHEAA for servicer, so I did, when completed printed application and reread and saw the same thing previous reader “Although Standard Repayment 10 year repayment plan qualifies, to receive loan forgiveness must have more than half of the payments under REPAYE, PAYE IBR (which chart said I didn’t qualify for) or ICR ($1050-$1300 payments (currently $703) I am panicked because I have made 70 payments to my current loan that I would like to count towards the PSLF. Do you think this is old language prior to the new change or should I cancel my app and reapply. Please advise
Hi DO,
This could be old language but it’s not certain if this will change.
What are the 70 payments you’ve made thus far? Were you in IBR, REPAYE, PAYE or ICR? If you haven’t been in a qualifying payment plan enroll in one now to continue on track to PSLF.
Andrew StudentLoanAdvice
I haven’t heard that language before so I don’t know what to make of it. Standard repayment payments have always counted toward PSLF though.