The top 10 things you should know if you’re pursuing Public Service Loan Forgiveness (PSLF).

By Jenna Stanley, EDCAP Helpline Manager

In the past few months, I have fielded hundreds of questions about the Public Service Loan Forgiveness (PSLF) program, and here are 10 things I want borrowers pursuing the program to know.

1. Forgiveness requires 10 years of “qualifying payments” while you work for a qualifying employer (generally non-profit or governmental organizations).

Set aside the “10 years of service” narrative, and instead think of achieving PSLF as accumulating 120 Qualifying Payments. Under the original program rules, a Qualifying Payment means that, in that month, you were working an average of 30 hours per week for one or more qualifying employers and making on-time, in-full payments on a Direct loan while enrolled in an Income-Driven-Repayment plan.

2. There is a limited time opportunity to get credit for more Qualifying Payments.

If you have Direct loan (or consolidate your non-Direct (FFEL/Perkins)) and file the PSLF Employment Certification form by April 30, 2023, you may be able to get credit for payments made under any repayment plan, even if those payments were late or not made in full. You will also get credit for certain types of deferments and forbearances, including the COVID Forbearance. But you must still meet the employment requirements of the program. You will NOT get credit for in-school deferments, grace periods, or time in default, even if you were working full-time for a qualifying employer. Learn more about these temporary rules through the IDR Adjustment and its impact on PSLF.

3. Forgiveness under PSLF is all or nothing.

Once you accumulate the 120 Qualifying Payments, the remaining loan balance is forgiven. There is no cap on the amount that can be forgiven under PSLF. There is no partial forgiveness under this program.

4. You do not need to have accumulated all 120 Qualifying Payments to apply for PSLF.

All eligible borrowers, including those who have recently graduated, should apply for PSLF so that MOHELA can start counting their ongoing Qualifying Payments. If you haven’t, you should submit a PSLF Certification form now and annually to get an updated payment count. Dispute any errors you identify immediately.

5. Only “Direct” loans are eligible for PSLF. Non-Direct loans must be consolidated to qualify.

There is good news. Up until April 30, 2024, borrowers can consolidate FFEL and Perkins loans and get retroactive payment credit through the IDR Account Adjustment. Parent Plus loan borrowers should seek one-on-one counseling before consolidating.

6. Your interest rate will be fixed, even if you consolidate your loans.

Federal loans have a fixed interest rate. When you consolidate, it is based on the weighted average and rounded up to the nearest one-eighth of 1%. This small increase in interest rate won’t matter if you believe you can accumulate 120 Qualifying Payments before paying off your federal loans. The same goes for interest capitalization.

7. Send your PSLF Certification form(s) to MOHELA. Keep receipts!

Submit your PSLF Certification form(s) to MOHELA through the PSLF Help Tool (selecting manual or electronic signatures) or manually using the PDF. When selecting a manual signature, through the HELP Tool or submitting the PDF, if your servicer is not MOHELA,  fax and/or mail the completed form(s) signed by your employer. Submission instructions are in sections 7 or 8 of the form. If you already have an account with MOHELA, upload the form(s) online. Always keep a copy of the completed form(s) signed by your employer(s).

8. Be patient. Once you’ve submitted your PSLF form(s) wait for the U.S. Department of Education (ED) tell you where you stand.

No one other than (ED) and your servicer, MOHELA, will know the exact qualifying payment count. Don’t stress until you get the final determination. It will likely take several months for MOHELA to get back to you with an initial Qualifying Payment count. You may also get confusing letters. If you feel you’ve received a final determination which you disagree with, contact MOHELA for clarification.

9. Do not be alarmed if MOHELA’s initial Qualifying Payment count is lower than you expected.

In fact, MOHELA’s initial count is almost always lower than it should be. Your account will go through a series of reviews before you are provided with an accurate Qualifying Payment count.

10. When in doubt, reach out!

Contact EDCAP for free and unbiased assistance.

EDCAP helps New Yorkers navigate the student loan system regardless of the type of education debt, federal or private. We are an independent, nonprofit one-stop shop for student loan debt and related issues. We offer free, one-on-one counseling with our student loan experts who only have your best interests at heart.