7 Steps for Borrowers Seeking Student Loan Forgiveness Under Expiring PSLF Waiver

Critical, temporary flexibilities for a student loan forgiveness program geared towards public service workers are about to end in just a few weeks. Top Education Department officials strongly encourage borrowers to apply before it's too late.

Editor's note: The PSLF Waiver expired on October 31, 2022. However, you may benefit from the provisions under the IDR Adjustment, which offers many of the same perks. The IDR Waiver, or IDR Adjustment, is a one-time account adjustment to give credit for qualifying payments to borrowers on income-driven repayment plans and under PSLF.

Here's what borrowers should know.

Flexibilities under Limited PSLF Waiver end on October 31

Public Service Loan Forgiveness (PSLF) is a federal student loan forgiveness program that can wipe out the federal student debt for borrowers who commit to working for nonprofit or government organizations.

The original eligibility framework for the PSLF program

The original eligibility framework for the PSLF program requires borrowers to make 120 “qualifying payments” before they can receive any loan forgiveness.

A “qualifying payment” under those original rules are payments made specifically on Direct federal student loans under an income-driven repayment or 10-year Standard repayment plan, while working in full-time employment for qualifying nonprofit or government organizations.

If the 120 qualifying payments are made consecutively, borrowers can get complete federal student loan forgiveness in 10 years, although the payments do not necessarily have to be consecutive to qualify.

Related: What to Do if Your PSLF Qualifying Payments are Incorrectly Counted

Unfortunately, the PSLF program was plagued by poor communication, administrative problems and poor oversight, leading to approval rates that never eclipsed the single digits.

In response to these problems, the Biden administration enacted the “Limited PSLF Waiver” initiative last October.

The Limited PSLF Waiver offers more flexible guidelines

The Limited PSLF Waiver provides temporary flexibilities that allow the Education Department to retroactively count past repayment periods on any kind of federal student loan (including FFEL-program loans, which don’t qualify for PSLF under the original rules) under any repayment plan, as well as certain past periods of deferment and forbearance, towards the borrower’s 120 qualifying payments.

According to the Dept. of Education, tens of thousands of borrowers have already been approved for over $10 billion in loan forgiveness under the waiver.

But there's a catch — the Limited PSLF Waiver ends in less than three weeks (on October 31, 2022). Top Biden administration officials are urging borrowers to apply before it’s too late.

The first thing borrowers should do is review the Education Department’s detailed Limited PSLF Waiver website, which provides a comprehensive overview of the initiative, instructions on how to apply and answers to frequently asked questions.

Determine if your employer qualifies for loan forgiveness through PSLF

For borrowers unsure about whether they may qualify for PSLF under the waiver, after reviewing the program’s requirements, the next step is to determine if your past or present employment may be eligible. Under the flexibilities of the waiver, the Education Department can potentially count qualifying payments as far back as October 2007.

The Education Department has a new PSLF Employer Search database, which allows borrowers to look up an employer to get a preliminary (non-official and non-final) determination as to whether an employer may be eligible.

Consolidate FFELP loans through Direct consolidation program to qualify for PSLF

FFELP loans — an older kind of federal student loan issued by a private lender but guaranteed by the government — do not qualify for PSLF. Under the temporary flexibilities of the Limited PSLF Waiver, however, FFELP loans can be consolidated into a Direct consolidation loan, and qualifying past loan periods on those consolidated FFELP loans can potentially count towards PSLF.

“Consolidate your FFEL Program loans into a Direct Consolidation Loan by Oct. 31, 2022,” instructs the Education Department in published guidance. “You can’t receive credit for time in repayment if you don’t consolidate… by that date.”

Since it can take a month or two for Direct consolidation applications to be processed, the Education Department has clarified that “your consolidation application must be submitted online through StudentAid.gov by 11:59 p.m., Eastern time on Oct. 31, 2022, in order for you to receive the benefits of the limited PSLF waiver.”

Related: FFELP Loan Forgiveness Options (Including Temporary PSLF Discharge)

Consider consolidating existing Direct loans to maximize loan forgiveness benefits under PSLF Waiver

Under the original PSLF rules, consolidating existing Direct loans that already had qualifying PSLF payments was a dangerous move, as consolidation would result in a new loan and wipe out any past progress towards loan forgiveness, resetting the PSLF qualifying payment count to zero.

Borrowers who already have Direct loans do not have to consolidate to benefit from the Limited PSLF Waiver. But under the waiver, the Education Department has indicated that borrowers can potentially maximize the waiver’s benefits by consolidating existing Direct loans with different repayment histories and different counts of qualifying PSLF payments.

“Under the time-limited PSLF rule changes, your consolidation loan will receive credit for time in repayment on your loans with different counts. Your consolidation loan will be credited with at least the largest number of payments on the loans that were consolidated,” says the Education Department in its guidance.

Note again, however, that to qualify, your Direct loan consolidation application must be submitted online through StudentAid.gov by 11:59 p.m., Eastern time on October 31, 2022.

Submit PSLF employment certification

Direct and FFELP loan borrowers who have not submitted required PSLF Employment Certifications — forms confirming that the borrower has worked in qualifying employment — need to do so by the October 31 deadline, as well. The Education Department cannot process PSLF requests without the submission of this form, which must be signed by both the borrower and the employer.

The Education Department says in its guidance that borrowers should “Use the [online] PSLF Help Tool by Oct. 31, 2022, to generate a PSLF form that is eventually approved” to qualify for the benefits of the Limited PSLF Waiver.

The Education Department “will maintain a record if you complete all the steps of the PSLF Help Tool on or before Oct. 31, 2022, but you must still print, sign, have your employer(s) sign, and submit the PSLF form to MOHELA, the PSLF servicer,” says the Education Department.

Borrowers can also submit a manual PSLF Employment Certification, but the employer’s signature must be dated on or before October 31, 2022.

Given some ambiguities on the Education Department's website, it would be prudent for borrowers to submit properly completed, signed and dated PSLF employment certifications to MOHELA before the October 31 deadline.

Note that digital signatures (such as typed signatures or the use of an electronic signature service) will be rejected; only hand-drawn signatures are acceptable (although scans or copies of hand-drawn signatures should be accepted).

Be patient while loan forgiveness forms are processed

Many borrowers are experiencing long processing times and confusing correspondence. In many cases, MOHELA — the Education Department's new PSLF loan servicer — takes weeks or months to issue an initial determination, which may dramatically undercount PSLF payments. This is because MOHELA's initial payment review may apply the original PSLF rules, not the rules of the waiver.

Then, the Education Department is supposed to conduct a second review and apply the Limited PSLF Waiver rules (even if the review occurs after October 31, 2022), which could result in adjustments to borrowers’ PSLF payment counts. The process is currently taking several months or longer.

Borrowers can request PSLF Reconsideration

For borrowers who believe that the Education Department has undercounted their PSLF payments, even after taking into account the adjustments under the Limited PSLF Waiver, there is a new PSLF Reconsideration process where borrowers can request a fresh review of their accounts.

However, the Education Department encourages borrowers to be patient and not prematurely submit a request for PSLF reconsideration.

“Be aware that accounts are still being updated during the limited PSLF waiver opportunity,” warns the Education Department.

“In addition, if you recently consolidated, you may not see any PSLF qualifying payments on your account yet. We anticipate a lot of overlap for those benefiting from both the limited PSLF waiver and the income-driven repayment (IDR) account adjustment, and those who might want to submit a reconsideration request. Therefore, we recommend that you wait until the limited PSLF waiver period ends, and we announce that the IDR account adjustments have been made to borrower accounts before you submit a reconsideration request so that our evaluation of your request will be based on the newest information.”