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Service members and veterans may be able to get their school debt forgiven because of temporary changes to a program designed to forgive student loans for people who work in government or nonprofit jobs. But the benefits are not automatic for most people. That means to take advantage of the Public Service Loan Forgiveness (PSLF) program, those eligible for the program need to act -- and soon.
You Must Act Now to Get Your Loans Forgiven Under PSLF
The changes to the program's forgiveness rules made by the Department of Education have already provided more than 10,000 federal student loan users with $715 million in forgiveness. Private student loans do not qualify for this program.
You can receive credit toward forgiveness of your student loan payments that may not have counted before, but you have less than a year to act. Until Oct. 31, 2022, the Department of Education will count any previous payments you made on any federal loan, under any payment plan (even if they were not paid in full or on time) as long as the loan was not in default.
In addition to nonprofit and government jobs, your time on active duty will count toward PSLF, even if you put your loans on a military deferment or forbearance. Soon, the Department of Education is expected to make this automatic for military service that occurs in 2022 or later (through a data match with the Department of Defense), but it’s always smart to check. And you will still need to file paperwork with the Department of Education to "certify" your military service from before 2022, in order for them to count those months towards your loan forgiveness.
General Requirements for Public Service Loan Forgiveness
Before you learn about the changes, you need to know about the general requirements for PSLF that remain unchanged. In general, PSLF means you can get your federal student loans forgiven if you:
- Make a total of 120 months of payments (but can be broken over a longer period of time);
- Are or were employed by the government, the military or a not-for-profit organization that provides a qualifying public service;
- Work full time; and
- Have direct loans or consolidate other federal loans into a Direct Consolidation Loan.
If you made more than 120 payments on an existing direct loan, you overpaid. You should automatically receive a refund from the Department of Education for the payments you made in excess.
New, Temporary Changes
|Normal PSLF Requirements||Added Flexibility (Ends Oct. 31, 2022)|
|● Receive credit only on Direct Loans
● Repay under the Standard Plan or an Income Driven Repayment plan
● Make on-time payments
● Need to be employed full-time for a qualifying employer in order for a payment to count
● Can only receive debt forgiveness after 120 payments if working for a qualifying employer at the time of application and forgiveness
|● Receive credit for payments made on federal Direct Loans, Federal Family Education Loans (FFEL) or federal Perkins Loans
● Past payments under any plan will count
● Past payments that were made late or for less than the amount due will count
● Must have been employed full-time for a qualifying employer when you made the payment in order to receive credit
● Can receive debt forgiveness after 120 payments even if not employed or not employed by a qualifying employer at the time of application and forgiveness
Three Steps You Need to Take Right Away
First, determine whether your employment qualifies.
Not all jobs count for public service loan forgiveness. The only jobs that count are government, military and nonprofit jobs that serve the public:
- Any government employer (federal, state, local and tribal)
- U.S. military
- Nonprofit organizations with 501(c)(3) status
- Some other nonprofit organizations
You will need to file paperwork regarding any of these jobs you had since Oct. 1, 2007. You should complete the PSLF form each year to ensure your public service is being counted toward your public service loan forgiveness.
To certify your military service, you will need:
- The Federal Employer Identification Number (FEIN) (sometimes seen as "EIN"). This can be found on your W-2. If you don't have access to a W-2 from your time in service, you can request one here.
- A signature from someone who was in your chain of command, or someone within your last unit's personnel office. If you cannot locate someone to sign your “Employer Certification,'' you may be able to contact a PSLF servicer and use alternative documentation, like your Leave and Earnings Statement (LES); however, the PSLF phone line is experiencing extremely long wait times. As of now, the Department of Education does not accept your DD214 as proof of your military service, although they are hoping to change that.
If you aren't sure if your job counts, you can check the PSLF Help Tool to find out whether your job qualifies. Keep in mind, even if your employer isn't listed, you still should move forward with the process as it's possible that the Department of Education has not made a determination regarding the organization's eligibility.
Second, find out if you have the right type of loan or if you need to consolidate your loans to qualify.
To find out what type of federal loan you have, log onto www.studentaid.gov using your Federal Student Aid (FSA) ID. If you do not already have an account, you can create one. You can also call 1-800-4-FED-AID, the FSA helpline, to determine if your loan is managed by the Department of Education.
If you took out a student loan before 2010 and have not previously consolidated it, it is likely you do not have a direct loan. That means that you will need to take steps to consolidate your federal loans (which are probably called FFEL and Perkins loans) into a direct loan from the government. You will still get credit for time before your consolidation. This can be done through your FSA online account in just a few minutes.
If you have direct loans, either from consolidation or that were issued after 2010, you do not need to consolidate your loans again.
If you have a Direct Loan and have already certified your employment for PSLF, the Department of Education is supposed to give you credit for any previously rejected payments under different loans. But it’s always smart to double-check. You can contact FSA directly if you believe previous payments under a different loan were not properly credited to your account.
Third, consolidate your loans or certify your employment before Oct. 31, 2022.
The added flexibility from the Department of Education is a short window of opportunity. It lasts only until Oct. 31, 2022, so if you have to consolidate your loans or certify your previous employment, you must do it before then. The Department of Education plans to credit each applicant's case on a rolling basis, which may extend beyond the deadline, but you must submit your paperwork by the end of October.
If You Already Made 120 Payments
If you have already made all 120 (10 years) of payments but are no longer employed in public service, the Department of Education's changes will still help you. It used to be that even after making all 10 years of payments, you could not file the final application for loan cancellation if you had left your public service job before filing. But the Education Department is giving a temporary reprieve to that rule. Until Oct. 31, 2022, you can obtain student loan debt forgiveness after making all 120 payments even if you are currently unemployed or not employed by a qualifying public service employer at the time of your application.
You don’t have to pay anyone to get help applying for PSLF or any program at the Department of Education. It’s always free to apply.
-- Jennifer Esparza is a Marine Corps Veterans and Legal Advocate at Veterans Education Success. Contact Veterans Education Success at email@example.com for more student loan forgiveness assistance.