Public Service Loan Forgiveness: The Deadline to Apply Is Today

The deadline is fast approaching for teachers, first responders, firefighters, government workers and other public servants to file applications for the limited Public Service Loan Forgiveness waiver.

Eligible public service officials who have worked in a qualifying position for 10 years or more can receive full loan cancellation through the PSLF. A temporary waiver with expanded benefits was introduced in October 2021 and expanded upon in April 2022, making forgiveness more accessible for millions of borrowers. The waiver includes more loan and repayment plan types that were previously excluded from the PSLF program. Borrowers with loans in forbearance can also apply.

If you haven't started on your PSLF limited waiver application yet, the steps you need to take right now aren't as time-consuming as you might think. And, you don't have to fully complete the process to make the deadline. Instead, you must complete the application through the PSLF Help Tool portal by the end of the month. If you hold FFEL, Perkins or other qualifying federal loan types, you'll need to apply to consolidate them into Direct Loans and fill out the PSLF application before 8:59 p.m. PT (11:59 p.m. ET) on Oct. 31.

Here's everything you need to know about applying for the temporary PSLF waiver, how to apply and consolidate your loans and what this week's announcement regarding the future of the PSLF program means for you. For more, here's how student loan debt forgiveness can affect your credit score and here's what you need to know about your new loan servicer if you're eligible for the PSLF program.

What is the PSLF program? Who can apply?

The PSLF program, first launched in 2007, was designed to help public servants pay off their loans faster. 

The program works by offering loan forgiveness to eligible public servants who have made 120 qualifying student loan payments. Yet, prior to last October's expansion of the program, it had a horrible approval rate: Almost 99% of borrowers who had applied since 2008 were denied.

To qualify for PSLF you must be employed full-time by a US federal, state, local or tribal government agency -- this includes the military -- or a nonprofit organization. You must have federal Direct Loans or other types of federally backed loans that have already been consolidated into Direct Loans and you must make 120 qualifying payments or 10 years of payments. Examples of borrowers who qualify for PSLF are workers like teachers, nurses and firefighters who serve their local communities. 

Do I qualify for loan forgiveness under the PSLF expanded waiver?

The waiver only applies to federal loans, which make up the vast majority, or more than 90%, of total student loan debt. Borrowers in public service jobs may be able to receive forgiveness for FFEL, federally backed loans made through private lenders, Perkins loans and other nonstandard or non-income-driven repayment plans for federal loans under the expanded waiver (see below). 

Borrowers can also receive credit for previous payments and periods of employment, such as active military duty, that they wouldn't have qualified for in the past. 

The easiest way to figure out if you qualify is to apply for the limited waiver.

What permanent changes are being made to the PSLF program?

The Department of Education on Tuesday announced permanent changes to the Public Service Loan Forgiveness program, in an effort to expand student loan relief to more eligible borrowers. The permanent changes will take effect July 1, 2023.

All payments made by eligible public servants on income-driven repayment plans will receive credit for the entire time period their loans sat in repayment -- even if they made late or partial payments, and regardless of the type of repayment plan.

Credit towards forgiveness will also be offered for: 

• Any month in which loans were in an eligible repayment, deferment or forbearance status prior to consolidation;
  
• Months where a borrower's account was in at least 12 months of consecutive forbearance;
• Months where a borrower's account was in forbearance for at least 36 cumulative months in forbearance
• Any month spent in deferment (except for in-school deferment) prior to 2013.

Most borrowers will not have to make any moves to receive the above benefits. Their accounts will be automatically adjusted.

However, if you have ineligible loans -- any federal loan that is not a Direct Loan or federally managed FFEL loan -- you will need to consolidate your loans into a Direct Loan first. You will then receive credit for your previous repayment period. 

For instance, if you made six years' worth of payments on a loan before consolidating it into a Direct Loan, those six years' worth of payments would be applied to your account. 

How do I apply for the temporary PSLF forgiveness waiver? 

The Department of Education has a dedicated tool to help guide your application for the limited waiver. The deadline to apply for the waiver is 11:59 p.m. ET on Oct. 31, 2022, but the sooner you apply, the better. Some borrowers may not have to take any action to have their loans canceled -- but it's a good idea to confirm your specific details.

If you have FFEL or Perkins loans, you'll need to consolidate them into Direct Loans before applying for the PSLF waiver. As long as you complete the consolidation application and the PSLF application before the deadline, you can qualify for the expanded waiver -- even if your consolidation takes several more weeks.

You can consolidate qualifying federal student loans into a Direct Loan online at the Federal Student Aid website. You can find the application for consolidation here. By consolidating into one Direct Loan and then applying for the expanded PSLF waiver, your past payments can now count toward loan forgiveness, as long as you are in a qualifying public service job.

Am I eligible for Biden's loan forgiveness and PSLF forgiveness?

Anyone with qualifying federal student loans from the Department of Education who earned less than $125,000 in 2020 or 2021 ($250,000 for married couples who file taxes jointly) is eligible for up to $10,000 in loan forgiveness. If you received a Pell Grant, you're eligible for up to $20,000 in loan forgiveness. This includes anyone eligible for Public Service Loan Forgiveness.

Since PSLF borrowers are on income-driven repayment plans, Biden's loan forgiveness may be applied automatically, according to Federal Student Aid. This is separate from applying for the expanded PSLF waiver, which offers full loan forgiveness for more public service borrowers.

How does the student loan payment pause affect my PSLF eligibility?

Federal student loan payments have been on pause for over two years, and were just extended to resume after Dec. 31. Under the PSLF, each of those paused payments counts as a qualifying loan payment during this time. So, if your payments were paused for 26 months, that counts as 26 on-time payments, bringing you closer to your goal of 120.

What if I didn't receive credit for past payments?

In the past, if you had been making payments but your loan servicer had incomplete or inaccurate records, you had almost no recourse to counter their claims. Now, with the limited waiver and announcement of permanent fixes to the program, you can apply for forgiveness and have your previous payments counted toward your debt and forgiveness. 

Correction, Jan. 25: This article previously stated that private loans would be eligible for student loan forgiveness under the new waiver. That was incorrect. In addition to Direct Loans, only FFEL loans -- which are federally backed, but often issued by private lenders -- Perkins Loans and other federal loans may qualify for the PSLF waiver.