Do You Qualify for Public Service Loan Forgiveness?
The Public Service Loan Forgiveness (PSLF) program allows employees of government agencies and non-profit organizations to have the remaining balance on their Federal Direct Student Loans forgiven after making 120 qualifying payments. While the program has broad appeal, the requirements and process can be confusing, and this has discouraged many eligible borrowers from pursuing forgiveness.
What are the requirements?
Borrowers have historically had to meet the following requirements to have their loans forgiven:
- Qualifying Employer: Government agencies and most non-profit organizations.
- Qualifying Job: Borrowers must be full-time, paid employees. You must work the greater of the employer’s definition of full-time or 30-hours per week. The employer verifies your employment status when you enroll or apply for forgiveness. You can check your employment status by contacting
- Qualifying Loans: Only Federal Direct Student Loans are eligible for forgiveness. Other types of Federal Student Loans, such as FFEL and Perkins, can become eligible by completing a Direct Consolidation. Private loans are not eligible for the program.
- Qualifying Repayment Plan: Eligible plans include the 10-year standard repayment plan or any of the income-driven repayment plans.
- Qualifying Payments: Borrowers must make on-time, in-full monthly payments while meeting all the other requirements. You can apply for forgiveness after making 120 qualifying payments
Am I eligible?
The University of Iowa is a qualifying employer and many/most/all full-time employees are eligible to participate in the PSLF. Who should they contact to confirm their employment status?
The approval rates for forgiveness have been terrible, so why bother?
One reason approval rates have been low is that borrowers did not receive credit for payments while they were in the wrong type of loan or repayment plan. Only payments that met all five of the requirements counted toward PSLF.
In October 2021, the Department of Education announced a temporary rules waiver to ease some of the restrictions and frustration and help encourage participation. Under the waiver, borrowers can receive credit for loans, payments, and plans that previously did not qualify for PSLF. Here are some of the key changes that can help borrowers benefit from the program:
- Student borrowers can receive credit for payments made on FFEL and Perkins Loans.
- Borrowers can receive credit for payments made under any type of repayment plan.
- Borrowers can receive credit for late or partial payments.
- Borrowers who are already enrolled in PSLF may be eligible for additional credits.
The Department of Education estimates more than a million borrowers could benefit from the changes. Even if you previously were not eligible for PSLF or chose not to participate, you might be one of them. Many of these changes are temporary and scheduled to expire in October 2022. Now is a great time to investigate.
You can learn more about the temporary changes at the Federal Student Aid website: https://studentaid.gov/announcements-events/pslf-limited-waiver.
What should I do next?
- Confirm what loans you hold and learn how they can meet the eligibility requirements.
- Learn how to enroll and apply for forgiveness.
- If you are already enrolled, see if you qualify for additional credits.
- Meet the waiver deadline.
- Closely monitor your progress.
Want to learn more or need help getting started?
While the temporary rules waiver provides significant benefits, the process can still be confusing. The University of Iowa partners with the Horizons Financial Wellness Center to provide employees resources and assistance on topics such as housing, budgeting and cash flow, credit, debt management, savings, and student loan repayments. UI employees can meet with a Horizons financial expert for up to up to three one-on-one financial coaching sessions at no cost.
Horizons has a student loan counselor who can help evaluate whether your loans are eligible for PSLF and how you might benefit from the temporary rules waiver. You can reach them at email@example.com or 319-398-3943.