How to Qualify for the Biden Administration’s Latest $6 Billion in Loan Forgiveness

In the past few months, the Department of Education has been expanding access to the Public Service Loan Forgiveness (PSLF) program, paving the way for thousands of student loan borrowers to receive loan forgiveness. On March 9, 2022, the Biden-Harris administration announced that it had identified over 100,000 borrowers who could qualify for a total of $6.2 billion in loan forgiveness. 

Editor's note: The PSLF Waiver expired on October 31, 2022. But borrowers can still take advantage of many benefits through the IDR Waiver. If you're on an income-driven repayment plan or pursuing PSLF, learn more about how the IDR Waiver can give you credit for payments that didn't previously qualify.

According to the latest data, the Department of Education identified anywhere from 170 to 7,870 borrowers in each state who could qualify for PSLF. California and New York had the largest number of borrowers identified at 7,870 and 7,400 respectively, while less populous states like Wyoming and North Dakota had a smaller group (170 and 190). 

Although the PSLF program has been around since 2007, it's had confusing requirements and a notoriously low acceptance rate since the first group of borrowers became eligible in 2017. This latest move by the administration could make it easier for public servants to get the loan forgiveness they were promised.  

If you owe federal student loans and work in public service, here are some steps that could help you qualify for PSLF. 

Check if you qualified for automatic forgiveness 

If you’ve already submitted your PSLF paperwork and made 120 payments on your federal student loans, you might not need to do anything to get the latest round of loan forgiveness. 

According to the Education Department, Federal Student Aid staff will review accounts and automatically cancel student loans for borrowers who qualify. Borrowers will be notified on a rolling basis.

This expansion of PSLF eligibility comes as a result of the Limited PSLF Waiver Opportunity that expired on October 31, 2022.

Prior to this PSLF waiver, only payments on Direct loans via an income-driven repayment plan counted toward the 120-payment requirement. 

If you qualified for the waiver, any of your student loan payments could have counted toward the 120-payment benchmark, regardless of your repayment plan or loan type. You might still need to consolidate your various loans to fold them into the Direct Loan Program, but you won’t lose credit for past payments. 

According to the Department of Education, this waiver could bring the average borrower 23 payments, or nearly two years, closer to getting PSLF. And thanks to this latest round of PSLF expansion, you might see your student loans automatically forgiven if Federal Student Aid decides you’ve already fulfilled the program’s revised requirements. 

Apply for Direct Loan Consolidation if you have non-Direct Loans 

If you don’t qualify for automatic PSLF forgiveness, you might need to take additional steps to put yourself in the running. One step you might need to take is consolidating your student loans. 

If you hold non-Direct Loans, such as FFEL or Perkins Loans, you’ll need to combine them into a Direct Consolidation Loan. By consolidating, you’ll bring all your loans into the Direct Loan Program, thereby meeting that requirement for PSLF.

Consolidating your loans also has the added bonus of simplifying repayment. Instead of having to track multiple bills and due dates, you can make one monthly payment on a single loan. When you consolidate, you can also put your loans on one of the four income-driven repayment plans. 

You can apply for a Direct Consolidation Loan at StudentAid.gov. Make sure to keep paying your student loans in the meantime so you don’t accidentally miss a payment, which could cause your loans to fall into delinquency. 

Submit the PSLF employer certification and application form 

Along with consolidating your student loans with a Direct Consolidation Loan, you might also need to certify your public service employment with the PSLF form. If you’re not sure if your employer qualifies, you can get guidance by logging into your StudentAid.gov account and using the PSLF Help Tool. 

This tool walks you through the eligibility requirements and generate the forms you need to apply to PSLF. Specifically, you’ll need to fill out the PSLF and TEPSLF Certification & Application form. 

If you already filled out the old Employment Certification Form (ECF), the Department of Education should accept it. But it’s worth filling out the most recent version of the form, as well, to ensure that all your documentation is in order. 

It’s also a good idea to reach out to your loan servicer to make sure it has received your application. PSLF applications used to be handled by FedLoan Servicing, but this servicer’s contract recently expired. Most borrowers who are pursuing PSLF will see their loans transferred to MOHELA, if they haven’t already. 

If you’re pursuing PSLF, contacting your loan servicer could help make sure your documentation doesn’t fall through the cracks amidst all these changes. 

Get all your ducks in a row by Oct. 31, 2022 

The PSLF waiver offers a number of benefits to student loan borrowers who work in public service, including credit for loan payments that previously didn’t qualify for PSLF. But in order to take advantage of this waiver, you’ll need to take action before October 31, 2022. 

That means applying for a Direct Consolidation Loan if you hold FFEL or Perkins Loans, as well as submitting your PSLF employer certification and application form. You should also seek to include loans outside the Department of Education system that can be consolidated such as Health Professions Student Loans. 

If you’ve already worked in public service for 10 years and made 120 payments on your student loans, you might see your balance automatically forgiven.

There have been a lot of changes to PSLF requirements in the past few months, and there could be more to come. Keep an eye out for future developments and stay up-to-date on the latest PSLF news so you can make sure you’re on track to receive student loan forgiveness.