PSLF for federal student loan forgiveness
The following page provides detailed instructions on how to enroll in the Public Service Loan Forgiveness (PSLF) program. Thousands of consumers have been told FedLoan, the company in charge of PSLF, has closed.
People are scared because they don’t know who their new loan servicer will be after FedLoan closes and how this change will affect their PSLF.
The following page will add clarity around the subject, including clear instructions on how to get PSLF.
As FedLoan stops servicing PSLF in 2022, the following loan servicers will take over:
- Navient (However, Navient is also expected to stop servicing loans in 2022 and its portfolio will transfer to Aidvantage)
On FedLoan’s website, they explain: “FedLoan Servicing has announced that it will stop servicing federal student loans when its current contract ends. In the coming months, we will be working with Federal Student Aid (FSA) to conduct a smooth transition of your loans to a different servicer over the next year. FedLoan Servicing will continue to service all loans until they are transferred to another FSA-designated servicer. Please note that this change will not affect the existing terms, programs, or available repayment plans on your loans, nor will it affect the temporary suspension of payments and 0% interest benefits applied for the COVID-19 emergency.”
As a result, many students are worried about how to get student loans forgiven under the PSLF plan after FedLoan closes.
Could I lose eligibility for loan forgiveness?
What will change after FedLoan closes?
Let’s dive in, and we’ll explain what you need to know to avoid losing your loan forgiveness.
How to Manage Your PSLF
If you forget to do something (like recertify) or your new loan servicer makes a mistake, you could eventually get rejected for loan forgiveness. “Of 225,000 borrowers who have applied to have their loans forgiven, only 2% have had their loans forgiven”, according to Elizabeth Warren.
If you follow the steps we’re suggesting you take, your PSLF will not get affected after FedLoan closes.
How to Protect Your PSLF From Being Affected?
- 1.) Follow up with the new loan servicer after you get notified that FedLoan officially closed out your account. Your current FedLoan login, at https://myfedloan.org/, will no longer work. Instead, you will have a new login to manage your PSLF, located on the new servicer’s website. Nobody knows who the new loan servicer is yet, but at Golden Financial Services, we’re monitoring the situation and will inform the public as soon as we know.
- 2.) After you log in to the new loan servicer’s website, check to see when your recertification is due. Make sure to recertify on time, which means beginning the process at least 1-2 months before the recertification due date.
- 3.) When you get recertified, make sure to also submit the Employment Certification Form, which everyone on the PSLF program must submit annually. This is the form that your employer must sign off on illustrating that you work at least 30 hours per week in a public service job.
- 4.) Make sure the new loan servicer illustrates as FedLoan did that; 1) you’re on the PSLF program, and 2) PSLF payments are being tracked through the new loan servicer’s website. Currently, at FedLoan, you can see how many payments on the PSLF plan have been made and how many are remaining until you’re eligible for loan forgiveness. So when it’s time to apply for PSLF, there is no question or possible way of getting denied. Your PSLF payments will be getting tracked every month.
Employment That Qualifies for PSLF:
- Government organizations at any level (U.S. federal, state, local, or tribal) – this includes the U.S. military.
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code.
- Public Library Services, Nurses, Early childhood education including Licensed or Regulated Childcare, and Police Officers are a few examples.
How to Enroll in the PSLF Program
If you haven’t yet been approved on the PSLF plan, follow these instructions:
- Consolidate and get approved for an income-based repayment plan that offers loan forgiveness. These plans need to get recertified every year to remain eligible for loan forgiveness. If you forget to recertify, you could get kicked out of the PSLF program and lose eligibility for loan forgiveness. And on top of that, your monthly payment can skyrocket because you’ll automatically get put back on the standard ten-year repayment plan.
- Get recertified every year until you’re eligible for PSLF, which takes ten years of making qualified payments. Qualified monthly payments mean monthly payments on an income-based repayment plan that offers loan forgiveness.
- Submit the Employment Certification Form. Currently, this form gets submitted to Fedloan servicing, but after they close your account, it will need to get submitted to the new loan servicer. Here are step-by-step instructions on how to consolidate, get on an income-based repayment plan, and loan forgiveness. As of now, FedLoan Servicing is the only PSLF loan servicer.
What could get you rejected for PSLF?
1.) fail to recertify on time
2.) forget to submit your Employment Certification Form in any given year
3.) don’t get approved for a repayment plan that offers loan forgiveness
What repayment plans offer loan forgiveness?
The Income-Based Repayment (IBR), Pay As You Earn Repayment (PAYE), and Income-Contingent Repayment (ICR) plans all offer loan forgiveness under the PSLF program.
However, try to avoid the ICR unless you have parent-plus loans because the monthly payment is often higher. If you have parent-plus loans, you’ll have to join the ICR for the first year but can eventually switch out of it, into the PAYE or IBR.
What is TEPSLE?
Temporary Expanded Public Service Loan Forgiveness (TEPSLF) “is a temporary program that will end once a certain amount of loan forgiveness has been granted. This opportunity is temporary, has limited funding, and must be provided on a first-come, first-served basis. Once all of the funds are used, the TEPSLF opportunity will end.”
Only direct loans are eligible for TEPSLE.
This special program is to help anyone that was rejected for PSLF, that feels they should have been approved.
Like for example, maybe you’ve been making payments for the last ten years on the income-based repayment plan (so you should qualify for PSLF). However, you forgot to submit your Employment Certification Form every year, and because of that one mistake, you were rejected for loan forgiveness. In your case, you have a second chance to apply for loan forgiveness under the TEPSLE.
Requirements to Qualify for Loan Forgiveness (under TEPSLF)
You must have:
made all of your payments under a qualifying repayment plan for TEPSLF;
had at least 10 years of full-time employment certified by a qualifying employer;
met the TEPSLF requirement for the amount you paid 12 months prior to applying for TEPSLF and the last payment you made before applying for TEPSLF to be at least as much as you would have paid under an income-driven repayment plan; and
made 120 qualifying payments under the new requirements for TEPSLF while working full-time for your qualifying employer or employers.
Delinquent on Federal Student Loan Payments?
If you’re delinquent on federal student loan payments and your accounts were sent to a third-party debt collection company, start by joining a loan rehabilitation program. Loan rehabilitation programs can restore your eligibility to PSLF and get the negative default marks removed from your credit report. Follow these instructions on how to join a loan rehabilitation program.
If you have not consolidated your federal student loans, here are step-by-step instructions.
For more information on Biden’s federal student loan relief pause, visit this page next.
For information about credit card relief programs, visit this page next.
In a nutshell, you have to stay on top of your federal student loans because;
A) the federal student loan servicers, like Navient and FedLoan, are not always the most transparent, and
B) it’s well documented that they often make mistakes. So on that point, sometimes it can pay off to use a company like Golden Financial Services to help manage your federal student loans up until you’re eligible for student loan forgiveness.
What loan servicer will take over after FedLoan closes?
This question has everyone guessing. Rumors have it that “Missouri Higher Education Loan Authority, which borrowers know as MOHELA, could have an inside track to replacing FedLoan as a federal servicer.”
Could Navient take over servicing FedLoan clients?
Your guess is as good as mine, but we’ll let you know as soon as we find out!