PSLF Waiver – How to Qualify & Get Your Loans Forgiven Faster

On October 6, 2021, the Department of Education announced a sweeping action to expand Public Service Loan Forgiveness (PSLF). This Public Service Loan Forgiveness Waiver opportunity only lasts until October 31, 2022. If you’re a public servant with any kind of federal student loans, you need to see if the PSLF Waiver could benefit you.

Both current and former public servants could benefit from this PSLF order. The Department of Education waived the normal requirement to be employed at a qualifying employer when applying for PSLF.


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PSLF Waiver Program Rules

Here are a few highlights of the PSLF Waiver. We’ll cover the full action steps in this article. Remember you need to react by October 31, 2022, to benefit due to the PSLF Waiver’s expiration date.

  • Borrowers with previously ineligible FFELP loans now qualify as long as payments were made while employed at a 501(c)(3) or government employer. You must consolidate these loans into a Direct Consolidation Loan and apply for PSLF to qualify.
  • All repayment plans now qualify for PSLF if certified before this PSLF Waiver expires.
  • All payments made before a loan was consolidated now count as well.
  • Deferment and forbearance due to active duty deployment will now count toward PSLF for current and former active duty military.

March 2022 PSLF Waiver Update

The guidance on the PSLF Waiver is constantly changing. Here’s some additional rules that the government announced, revealing even more opportunities to get forgiveness you weren’t expecting.

  • If loans have different numbers of credit, consolidate them because the Department of Education will give credit for the loan with the most credit towards PSLF on the new consolidation loan
  • Loans no longer need to have overlapping payment history to be consolidated. In fact, consolidating loans that were not in repayment at the same time might result in a higher number of qualifying payments than just taking the loan with the max number of payments credited.
  • If you have Parent PLUS loans and at least one loan taken out for your education, consolidate the whole thing together. This is an awesome loophole for getting Parent PLUS loans to count
  • If you have a lot of Parent PLUS loans without a loan from your own education, do a double consolidation and apply anyway in the hopes that it will count.
  • The only reason not to consolidate is if you 1) are not positive you will remain in public service for the 10 years required, 2) you do not want your payment recalculated early with your higher income, or 3) you will not have a partial financial hardship with your new income after consolidating.

We will be following updates closely to maximize the savings we can find for you in these complex PSLF waiver rules.

What is the Public Service Loan Forgiveness limited waiver opportunity?

The Biden administration used authority under the HEROES Act of 2003 to make all loans and repayment plans qualify for loan forgiveness. You must have made payments while employed at a nonprofit or government employer full-time between October 2007 and October 2022.

If you end up with more than 120 months of qualifying credit due to this PSLF order, you’ll receive a refund.

Borrowers who have already received loan forgiveness, paid off their loans, or who have refinanced with a private company won’t receive this benefit.

How did the Biden PSLF forgiveness expansion happen?

President Biden had campaigned on the idea of expanding loan forgiveness for public servants.

Former President Trump and President Biden had previously used powers in the HEROES ACT of 2003 to waive payments and interest during the pandemic due to special authority over student aid programs during periods of national emergency.

The Department of Education determined that they had the authority to eliminate many of the program’s normal requirements until October 31, 2022.

How to get loan forgiveness from this PSLF Waiver

Borrowers will need to take different steps depending on what kind of loans they have and how much employment history they’ve certified with the Department of Education.

Borrowers with older loans need to take two steps and borrowers with newer Direct Loans only need to take one step.

PSLF action steps for borrowers with loans from 2010 and before

Borrowers with federal student loans from 2010 or before may have two kinds of loans: Direct and FFEL.

Most of these loans will be from the FFEL program (FFELP), which previously didn’t qualify for PSLF at all.

For all FFELP and Perkins Loans, you must first consolidate them into a Direct Consolidation Loan. If you have Parent PLUS loans, you can do a double consolidation to get around the rules excluding Parent PLUS from forgiveness!

Second, submit the PSLF Employment Certification Form, also called the ECF, using Student Aid’s PSLF Help Tool.

If you have Direct Loans from this period, certify ALL your years working at a nonprofit or government employer. You could pick up years of additional credit toward forgiveness even if you were in the wrong repayment plan.

Note that you can consolidate multiple loans with different payment counts together and get credit for the new consolidation loan for the one with the most months of credit!

Note: Many FFEL borrowers could qualify for immediate forgiveness by consolidating and certifying at least 10 years of employment. The vast majority of FFELs have been in repayment for at least 10 years. That means if you have 10 years’ worth of public sector employment between 2007 and 2021, you could qualify for a tax-free discharge of your loans.

PSLF action steps for borrowers with loans from after 2010

If you have federal student loans from after 2010, you most likely only have Direct Loans as the FFELP ended in 2010. Therefore, there’s no need to consolidate.

Although, given new guidance on consolidation of Direct Loans during the waiver, you might want to consider it.

Consider this scenario: you worked as a teacher after undergrad for 4 years and went back to grad school and borrowed another $100,000.

If you consolidate the grad school loans with the undergrad loans, your new loan will get credit for those four years you paid as a teacher!

The guidance on the PSLF waiver seems to change WEEKLY. It’s frustrating when we’re trying to help clients and readers maximize their benefits, but just know that there are A LOT of planning opportunities around this.

After Determining Consolidation Need, Take this PSLF Waiver Step Next

After determining if you need to consolidate or not, you only need to submit the PSLF ECF. Any previously ineligible years of payments will now count as long as you made payments of any kind on your student loans.

If you’ve already certified your PSLF credit, you can benefit automatically in the coming months as the government reviews loan accounts.

That said, I recommend you resubmit your ECF even if you’ve already done so. Include ALL employment from a 501(c)(3) or government employer between 2007 and 2021.

I expect many borrowers (even those who are PSLF-certified) neglected to include qualifying employment for years in which they didn’t make an income-based payment on their student loans.

This new PSLF order allows ANY payment to qualify, so one of the most common reasons borrowers will fail to benefit will probably be neglecting to include all qualifying public service employment on their ECF.

How long until you see the PSLF Waiver help you?

The Department of Education is in the middle of transferring 16 million borrower accounts to a new servicer. FedLoan, the company that manages PSLF, is one of the servicers quitting.

If you take the actions above now, I expect you’ll have nothing to worry about.

As of March 2022, we have already seen over 100,000 borrowers get forgiveness on over $6 billion. You must be patient and make sure you have taken all the necessary steps.

The Department of Education has stated that they need time to process all of these changes, and they ask you to not contact them. No wonder folks are confused. You can use the comments section of this site and also contact us to get help.

PSLF Waiver benefit: Technical payment problems eliminated

Another benefit of the PSLF Waiver is those late payments and payments slightly more or less than the amount due will now qualify.

Many borrowers have been fighting for years to get payment issues fixed, often of no fault of their own.

This will provide relief to many thousands of borrowers.

How did President Biden Expand Public Service Loan Forgiveness?

How could such a sweeping PSLF order be possible? The Department of Education “has determined that it can use flexibilities provided by the HEROES Act of 2003” to waive almost all of the normal requirements limiting the PSLF program’s benefits.

Borrowers who have FFEL, Direct, or Perkins student loans normally have a complex set of rules to navigate to get their student loans forgiven as public servants.

The way the PSLF program normally works is you need to make 120 monthly payments while enrolled on an income-driven repayment plan. Only payments made on Direct Loans count.

The Biden Administration saw a limited window to use emergency powers to expand PSLF benefits without having to ask Congress to pay for it.

Opponents of PSLF will have a hard time challenging this PSLF action

Because the administration is pointing to emergency powers, any opponents of this PSLF action will not be able to challenge it on legal grounds.

Initial reactions from Congressional Republicans seemed more like criticism (one letter mentioned “abuse of executive authority”) rather than calling the PSLF action illegal.

I don’t see a path to stopping the PSLF Waiver’s benefits.

How many borrowers could benefit from President Biden’s PSLF expansion?

Early reporting suggested the Biden Public Service Loan Forgiveness Waiver would benefit as many as 550,000 borrowers. However, this number only includes borrowers who have already applied for PSLF.

If you include the millions of borrowers with previously ineligible loans, millions of people could receive benefits under this PSLF Waiver.

FFEL PSLF loan forgiveness alone could wipe the entire balance for millions of borrowers

Why do I claim that? Take a look at the current state of FFEL loans below, none of which are eligible for PSLF under normal rules. Keep in mind, all FFEL loans have been around for at least 10 years and now could qualify for PSLF under this executive action.

Dollars of FFELP Loans (Q2 2021)

# of Borrowers with FFELP Loans

$238.8 Billion

10.6 Million

Source: Department of Education, Q2 2021

There are presently more than 10 million borrowers with FFELP loans.

Non-profit workers represent about 10% of the workforce, according to the Bureau of Labor Statistics. And a Brookings report found that government workers represent approximately 15% of the workforce.

That means approximately 25% of the workforce would work for a qualifying employer under PSLF.

Public sector workers are more highly educated than private sector workers as a group. That means this 25% number is likely a floor. Likely, more than 25% of the 10 million borrowers above could work for a qualifying employer.

A rough guess of the FFEL loans that could be forgiven immediately

That said, you need to be employed full-time for 10 years cumulatively to benefit as well as have made payments while employed for at least 10 years to get PSLF. Of the current public sector workers, it’s reasonable to guess at least half have met those requirements — since more than 90% of FFEL loans are in active repayment and have existed for at least 10 years since the program ended in 2010.

PSLF borrowers also tend to have higher average balances, so an absolute floor for eligible FFEL loans might be 25% (share of the workforce in public service) * 50% (share that’s been employed in public service full time for 10 years) * $238.8 billion = $29.9 billion.

That number could easily double in size if the share of FFEL borrowers is disproportionately working in public service.

This cost estimate was not included in the Department of Education announcement.

How many Direct Loans will be forgiven from this PSLF order?

The typical public servant borrower with Direct Loans who benefits from this PSLF order will probably just get a couple of years of extra credit toward their 120 months of payments.

Many borrowers started out on the wrong repayment plan or made a consolidation mistake but figured out what to do shortly after that.

Borrowers who didn’t certify credit toward forgiveness during times they were on plans besides an IDR plan will have the most to gain.

Also, FAR more borrowers qualify for PSLF with Direct Loans than have currently submitted an approved employer certification form. The ultimate benefit amount of the PSLF Waiver may ultimately depend on reaching a huge number of individuals in the next year.

Getting help navigating PSLF

If you follow the action steps in this article carefully, you could knock years off your repayment or even get complete forgiveness.

Borrowers who already had a plan in place from the beginning will likely not benefit as this order is targeted at borrowers who experienced difficulty with PSLF during the late 2000s and early 2010s when information about PSLF was less widely available (and what was available was often incorrect!).

Our team can help you figure out 1) if this benefit is worth pursuing and 2) how this and other loan repayment options affect your long-term financial goals. We also happen to have the highest reviews of any company operating in the student loan industry, with over 1,000 of our 7,000+ clients taking the time to submit one.

Go it alone unless you would like help — and if you do, we’re here.

Also, share the news with friends because no matter what happens, there will be a HUGE number of borrowers who will not benefit simply because they fail to apply.

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