The Biden administration has launched a new tool to help borrowers determine whether they may qualify for student loan forgiveness based on their public service jobs. The new tool arrives just as a key loan forgiveness expansion is about to expire.
Here’s what borrowers need to know.
Expansion of Student Loan Forgiveness Through PSLF
The Pubic Service Loan Forgiveness (PSLF) program can provide federal student loan forgiveness for borrowers who devote 10 or more years of their career to public service work. First established in 2007, the program has historically been governed by strict eligibility rules; only Direct federal student loans qualified, and only payments made under certain kinds of repayment plans would count towards student loan forgiveness.
Last October, the Biden administration temporarily relaxed these rules through the Limited PSLF Waiver. The administration went even further last April, allowing even more past loan periods to count towards PSLF. Taken together, these changes have dramatically expanded want can count as a “qualifying payment” towards student loan forgiveness under PSLF to include most past periods of repayment, as well as some past periods of deferment and forbearance. The changes are temporary, however, and the Limited PSLF Waiver is set to end on October 31, 2022.
Largely unchanged are the employment requirements for PSLF. Qualifying employment, for purposes of PSLF, means full-time, W-2 employment for a domestic public entity or a 501(c)(3) nonprofit organization, or part-time for multiple qualifying PSLF organizations if your combined hours are at least 30 hours per week.
Education Department Launches PSLF Employer Search Tool
Borrowers can sometimes get tripped up trying to determine whether their employer qualifies them for student loan forgiveness through PSLF. And up until now, there has been no easy way for borrowers to get quick answers. Traditionally, borrowers have had to submit to their loan servicer a formal PSLF application signed by their employer to get a formal determination. And the process can take months.
Earlier this month, the Education Department launched the PSLF Employer Search Tool. This online database provides a “a quick and easy method” to look up an employer and receive a preliminary determination of PSLF eligibility before applying. All a borrower needs is the Employer Identification Number (EIN), which can usually be found on your W-2 or pay stub, and your dates of employment.
“We added a new PSLF Employer Search which allows [borrowers] to search for qualifying PSLF employers without logging in” to the StudentAid.gov website, said the Education Department in a bulletin. “The PSLF Employer Search provides easy-to-follow prompts and guides users through the process to determine if their employer qualifies for PSLF. Users will receive a message about next steps if their employer qualifies for PSLF, does not qualify for PSLF, or isn’t listed in the database.”
Borrowers Must Still Apply to PSLF To Get Student Loan Forgiveness
Importantly, the PSLF Employer Search result is not a guarantee of PSLF eligibility, but rather a tool to help borrowers make a preliminary determination. To qualify, borrowers would still have to submit the PSLF Employment Certification Form (ECF) signed by their employer. Borrowers can start this process via the Department’s PSLF Help Tool. You may need to take additional steps, as well, such as consolidating your FFEL or Perkins loans into a Direct consolidation loan, in order to qualify for PSLF under the Limited PSLF Waiver.
Borrowers should review the PSLF program, along with the current temporary fixes, before taking drastic steps regarding their loans:
- Review the general rules for the PSLF program.
- Review the new Limited PSLF Waiver initiative, which expires on October 31, 2022.
- Review the pros and cons of Direct loan consolidation.
Education Department officials are urging borrowers to apply for PSLF and take advantage of the Limited PSLF Waiver before it expires in October.
“The Public Service Loan Forgiveness program is helping more & more Americans get debt relief,” said Education Secretary Miguel Cardona in a tweet yesterday. “Sign up today!”
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