What is the Public Service Loan Forgiveness Program and Am I Eligible?
There has been a lot of information shared on the Public Service Loan Forgiveness program making it confusing to understand who is eligible and how to apply. The good news is that recently, the Department of Education announced changes that will greatly expand the number of federal student loan borrowers eligible for loan forgiveness including changes for non-public service borrowers.
Pension Fund has engaged our partner, Your Money Line, to help answer your questions around the PSLF program. Your Money Line wrote a blog with some great information and has also compiled a list of FAQs to help get you started.
All Pension Fund members have access to the financial guides at Your Money Line who can review your unique situation and help you determine if you qualify for the PSLF program. To reach the YML team, email: firstname.lastname@example.org or call 833.890.4077 to schedule an appointment.
It is important that you act now as the program ends Oct. 31, 2022.
Where do I start?
- The first step for you, as a PSLF hopeful, depends on where you’re at in the process. The goal for all borrowers is the same, to achieve forgiveness, but it’s understandable if you’re not sure what to do next. The PSLF Help Tool will help you determine if your employer is qualifying, whether you need to consolidate, and can help start the Employment Certification Form.
What is the employment certification form?
- The employment certification form provides proof of employment to the PSLF loan servicer. One of the PSLF requirements is to work full-time for a qualifying employer to receive credit for payments. This is accomplished by both you and your employer providing the necessary information to prove your employment history.
How often do I have to complete the employment certification form?
- Technically, you don’t need to provide proof of employment until you make the 120 qualifying payments. This is not recommended, as the only way to know your payments are qualifying is to complete the form. It’s recommended that you complete this form annually or as often as you change employers (whichever is more frequent).
How do I know if I have eligible loans?
- To qualify for PSLF, you need to have “Direct” loans. FFEL, Perkins, and private loans don’t qualify for PSLF. You can verify your loan type with your servicer or the PSLF Help Tool.
What is the limited waiver?
- The limited waiver allows some borrowers the opportunity to earn credit for certain payment types which were previously ineligible. You can read more about the limited waiver here. Be advised this waiver is only in effect until October 31, 2022.
Do my payments have to be consecutive?
- One of the best parts of the PSLF program is that your payments do not have to be consecutive. Each of the 120 payments is treated independently from the other 119. If you went back to school, entered a forbearance, or even missed a payment or two, this doesn’t hinder any progress toward PSLF?
Is forgiveness taxable?
- Loan forgiveness through the PSLF program is not taxable.
Can I make extra payments to earn forgiveness sooner?
- Unfortunately, no, you cannot. Payments must be made over 120 separate months. If PSLF eligible, it does not benefit you as a borrower to make extra payments as you can only earn one payment per month.
What about the lack of payments during the COVID forbearance period?
- Great news, these months automatically count as qualifying payments for PSLF (assuming you met the other criteria)
Are private loans eligible for PSLF?
- No, private loans are never eligible for PSLF.
How long will it take to hear from FedLoan Servicing once I submit my paperwork?
- At this time, FedLoan Servicing advises it will take 120+ days to hear back from their team after form submission.
Where do I send my forms?
- Section 7 of the Employment Certification Form contains instructions for submission for uploads, fax, or mail.
Are pastors eligible for PSLF?
- In the past, it was pretty difficult for pastors to qualify for PSLF. However, as of July 2021, the exclusion for time spent on “ religious instruction, worship services, or any form of proselyting” no longer exists. Though pastors were never excluded from PSLF the barriers to qualifying are much less.