The Public Service Loan Forgiveness (PSLF) program is a United States government program that was created under the College Cost Reduction and Access Act of 2007 (CCRAA) to provide indebted professionals a way out of their federal student loan debt burden by working full-time in public service.[1] The program permits Direct Loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, to have the remainder of their balance forgiven.[2] The Department of Education reported that 2,215 borrowers had the remainder of their respective student loans forgiven under the program as of April 30, 2020 for a denial rate of 98.5%.[3]
FREQUENTLY ASKED QUESTIONS:[4]
How do I know if I am eligible for debt relief?
- To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households).
- If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt relief.
- If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt relief.
What does the “up to” in “up to $20,000” or “up to $10,000” mean?
- Your relief is capped at the amount of your outstanding debt.
- For example: If you are eligible for $20,000 in debt relief, but have a balance of $15,000 remaining, you will only receive $15,000 in relief.
What do I need to do in order to receive debt relief?
- Nearly 8 million borrowers may be eligible to receive relief without applying—unless they choose to opt out—because relevant income data is already available to the U.S. Department of Education.
- For borrowers whose income data the U.S. Department of Education doesn’t have, the Administration will launch a simple application in October. Borrowers won’t need to upload any documentation or have an FSA ID to submit their application.
- If you would like to be notified by the U.S. Department of Education when the application is open, please sign up at the Department of Education subscription page.
- Most borrowers who apply can expect relief within six weeks.
- We encourage everyone who is eligible to file the application, but there are 8 million people for whom we have data and who will get the relief without applying unless they choose to opt out.
- Borrowers are advised to apply by mid-November in order to receive relief before the payment pause expires on December 31, 2022.
- The Department of Education will continue to process applications as they are received, even after the pause expires on December 31, 2022.
What is the Public Service Loan Forgiveness Program?
- The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full time for federal, state, Tribal, or local government; the military; or a qualifying non-profit.
- Temporary changes, ending on Oct. 31, 2022, provide flexibility that makes it easier than ever to receive forgiveness by allowing borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF.
- Enrollments on or after Nov. 1, 2022 will not be eligiblefor this treatment. We encourage borrowers to sign up today. Visit gov to learn more and apply.
More on Student Loan Forgiveness/Discharge: “The U.S. Department of Education offers several forgiveness and discharge programs for federal student loans. You may qualify to have some or all of your loans forgiven or discharged in certain situations.
While the terms student loan forgiveness or cancellation and loan discharge are often used interchangeably, they’re actually very different from one another.
You may qualify for student loan forgiveness or cancellation based on your qualifications, such as your career path. Or, you may be eligible for loan discharge based on circumstances beyond your control, such as becoming totally and permanently disabled.”[5]
HOW DOES IT WORK? “You can qualify for federal student loan forgiveness based on a range of circumstances, including the type of work you do, your disability status and whether the college you attended defrauded you. There are far fewer student loan forgiveness programs available for private student loans than federal loans. But if you’re having trouble making private loan payments, you can look into loan modification through your lender or repayment assistance programs.
Each federal forgiveness option works a little differently, depending on whether it’s a discharge, cancellation or forgiveness program. Some, like Public Service Loan Forgiveness, require you to make a certain number of on-time monthly payments before applying for forgiveness. Others, like Perkins loan cancellation, provide forgiveness on an ongoing basis based on years of qualifying service. In most cases, you’ll have to provide proof of eligibility.”[6]
WHO IS ELIGIBLE? “This limited waiver is available to borrowers who currently have FFEL, Perkins, or other indirect loans if they apply to consolidate into the Direct Loan program and submit a PSLF form by Oct. 31, 2022. The waiver applies to loans taken out by students. Parent PLUS loans are not eligible under the limited PSLF waiver.
Military service members, federal employees, and some select other public service groups are automatically given credit toward PSLF. In particular, the waiver allows active-duty service members to count deferments and forbearances toward PSLF. This solves a problem for service members who have paused payments while on active duty but were not getting credit toward PSLF, according to the U.S. Department of Education announcement.”[7]
[1] Public Service Loan Forgiveness - Wikipedia [2] "Loan forgivness". studentaid.ed.gov [3] Friedman, Zack (June 2, 2020). "Why 147,000 People Were Rejected For Student Loan Forgiveness". Forbes. [4] The below mentioned FAQ points are retrieved from: The Biden-Harris Administration’s Student Debt Relief Plan Explained | Federal Student Aid [5] 11 Student Loan Forgiveness Programs: How To Qualify – Forbes Advisor [6] Ibid. [7] Student Loan Forgiveness Definition (investopedia.com)
