Public Service Loan Forgiveness (PSLF) is available for some federal student loan borrowers. Keeping track of PSLF qualifying payments has been a frustrating process. However, Fedloan introduced a new tool that makes tallying up your qualifying payments easier.
This guide shows you how to qualify for the PSLF program and how to use the new PSLF help tool from FedLoan.
Note: There have been recent changes to prior PSLF payment eligibility which could positively impact millions of borrowers thanks to the Biden administration’s PSLF order. You need to submit your PSLF ECF form by October 31, 2022 to qualify for this time-limited PSLF Waiver. Unfortunately, you need to be proactive in submitting a new ECF document. It’s a requirement to gain additional relief from this executive action.
5 requirements for PSLF
To qualify for the Public Service Loan Forgiveness Program, there are five requirements to successfully receive forgiveness.
- Work for a public service entity. A public service entity can include a government organization, a nonprofit that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, a private not-for-profit organization that provides certain public services or serving in an AmeriCorps or Peace Corps position. This might include military service, law enforcement, emergency management, religious instruction, public education and many other public interest employers.
- Work full-time for this entity. Full-time employment means working for one or more qualifying employers for the greater of an annual average of at least 30 hours per week or the number of hours the employer considers full time.
- Have Direct loans. Only student debt under the Direct loan program will receive forgiveness via PSLF. If you have Federal Family Education Loans (FFEL), Perkins loans, HEAL, HPSL, LDS or any other loan type eligible for a Direct Loan Consolidation, you can convert them into qualifying loans after reviewing these considerations.
- Repay your loans on an income-driven repayment (IDR) plan. Qualifying IDR plans include Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR) and Income Contingent Repayment (ICR). These repayment plans are based on 10% to 20% of your discretionary income.
- Make 120 qualifying payments. A qualifying payment is a monthly payment made on time, in full, while all four of the above-listed requirements are also met. Neither the 120 qualifying payments nor the employment status has to be consecutive.
The first two requirements are certified via the Employment Certification Form (ECF). This form is retroactive. So, it only certifies past PSLF qualifying payments up to the date on the form. You should submit this form at least once a year.
PSLF Help Tool
In 2019, the Department of Ed introduced the PSLF Help Tool to assist those interested in pursuing this program. A series of questions helps applicants determine if their employer may qualify. It also assists with finding out if they have the correct loan type.
Additionally, the tool generates a prefilled ECF for signatures to return to FedLoan Servicing for approval.
FedLoan Servicing is the loan servicer currently responsible for PSLF. If this company doesn’t already service your federal debt, your loan will move to it within seven to 10 days of an accepted ECF.
What to expect after submitting your ECF
If your ECF is accepted, FedLoan has verified that your loans and employment qualify.
They’ll then review your payment history (including any payments you made to another federal loan servicer before your loans were transferred) to determine how many payments made during the period of employment certified on the ECF are qualifying monthly payments for PSLF.
You will then be notified of the total number of qualifying payments you’ve made, and how many payments you must still make before you can qualify for PSLF. This is usually a letter sent via mail or email.
It’s best practice to submit the ECF annually. But you’d have to wait until your next submission to view your updated payment progress.
PSLF Payment Tracking
Fedloan has recently made some upgrades to its online user portal to include PSLF Payment Tracking. This is under the “Payments & Billing” tab.
This Tracker will list out each of your loans and reflect your PSLF qualifying payments. It separates out payments that have already qualified via an ECF and those that need employment certification. Additionally, this tool helps you see your progress toward getting PSLF more transparently. This includes payments you made since your last ECF submission, something you would have had to track on your own prior to this feature being launched.
If you have any “ineligible payments,” the tracker will help identify those and list a reason for why. It looks something like this:
If you believe there is an error in your payment count reflected after a new ECF is submitted and after reviewing the denial reason provided, here are five steps to fix your PSLF payment count.
Be confident about your PSLF payment timeline
This online feature from Fedloan is a big improvement that could help people feel more confident about their timeline toward earning PSLF. Moreover, it will hopefully help borrowers catch discrepancies sooner rather than later.
The Department of Education’s goal is to improve customer service and hold servicers accountable for their performance in managing federal student loans. So, expect more improvements.
If you need some additional guidance with your specific student loan situation, schedule a consultation with us. Our team has helped hundreds of people handle their student loan debt.