PSLF Qualifying Payments: How to Get Loan Forgiveness

What Is Considered a Qualifying PaymentQualifying PaymentA monthly loan payment that counts toward federal forgiveness programs like PSLF or IDR forgiveness. Whether a payment qualifies depends on the loan type, the repayment plan, and the borrower's employment at the time of payment. for PSLFPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer.?What Does 120 Qualifying Payments Mean?Eligible PaymentEligible vs. QualifyingCOVID CreditSuspended PaymentsGet CreditBottom Line

• It was made after Oct. 1, 2007.
• It was made under a qualifying repayment plan — IBR, ICR, PAYE, or REPAYERevised Pay As You Earn (REPAYE)A former federal income-driven repayment plan that capped payments at 10% of discretionary income, with forgiveness after 20 or 25 years. REPAYE was replaced by the SAVE Plan in 2023..
• It was for the full amount due, as shown on the bill.
• It was made within 15 days of the due date.
• It was made while you were employed full-time for a qualifying employer.

While seemingly straightforward, these requirements tripped up thousands of borrowers. After dutifully paying on their student loan debt for years while working for a government or nonprofit employer, they would submit their PSLF application only to have it rejected because they didn’t have enough qualifying payments.

Congress created a fund to help borrowers with payment issues. But the Temporary Expanded Public Service Loan Forgiveness Program didn’t work. The TEPSLFTemporary Expanded PSLF (TEPSLF)A now-closed federal program that allowed some borrowers to qualify for PSLF even if they had been on a non-qualifying repayment plan, as long as they otherwise met PSLF requirements. application process was unnecessarily complex and filled with pitfalls that prevented deserving public servants from getting the relief they were promised.

Last year, the Biden administration took a flamethrower to the thickets blocking borrowers from accessing the PSLF Program. The Education Department will offer a temporary waiver to count any payment made after Oct. 1, 2007, while the student loan borrower was working in qualifying employment. As of this July, the Limited PSLF Waiver has led to 145 thousand borrowers getting $8.1 billion in forgiveness.

Keep reading to learn more about qualifying payments for PSLF.

What Is Considered a Qualifying Payment for PSLF?

A payment becomes a ‘qualifying payment’ for PSLF when it’s linked with certified and approved employment. Specifically, a payment is considered ‘qualifying’ if:

• You certify your employment and it’s approved for all or part of the period
• The payment corresponds to an employment period that is approved

These qualifying payments are what count toward the 120 payments required for loan forgiveness.

But it’s crucial to understand that not all payments are automatically ‘qualifying.’ Certification and approval of your employment are key steps to ensure your payments are counted correctly.

What Does 120 Qualifying Payments Mean?

To secure loan forgiveness through PSLF, you must make 120 ‘qualified’ payments. A payment counts as ‘qualified’ when it meets these specific conditions:

• You were employed full-time by an eligible employer
• Your loans were in good standing, meaning they were not in deferment, forbearance, or defaultDefaultThe status of a federal student loan after the borrower has failed to make required payments for 270 days. Default can trigger collection actions such as wage garnishment, tax refund offset, and damage to credit reports.

But remember, it’s not just about the number 120; each payment must meet these standards. Understanding this can help you plan your repayment strategy more effectively.

What is a PSLF eligible payment?

A PSLF eligible payment is a monthly payment that will count towards the 120 qualifying payments needed for loan forgiveness after your eligible employment period is approved.

For example, imagine you worked full-time* at the VA last year and made payments towards your Direct Loans under the Income-Based RepaymentIncome-Based Repayment (IBR)A federal income-driven repayment plan that caps monthly payments at 10% or 15% of discretionary income, depending on when the loans were taken out. Remaining debt is forgiven after 20 or 25 years of qualifying payments. Plan. Each payment you made during that year is a PSLF-eligible payment that will become a qualifying payment once you submit a PSLF Form to MOHELAMOHELAThe Missouri Higher Education Loan Authority, a federal student loan servicer that currently handles accounts for borrowers in Public Service Loan Forgiveness and other federal loan portfolios. and the servicer approves your employment.

You can only make payments if you’re supposed to make a payment. So you can’t make a qualifying payment while you’re in a grace period or if you return to school and your account is placed in deferment.

Related: Does the VA Qualify for PSLF?

\* Borrowers who work part-time can still meet the program’s eligibility requirements if they work for two or more qualifying employers and their combined working hours are at least 30 hours per week.

PSLF Eligible vs. Qualifying Payments

Your letter may show you have more eligible payments than qualifying payments. That’s normal. The eligible payment will become a qualifying payment when you certify your employment and MOHELA approves your employment period.

Related: Does Forbearance Count Towards PSLF?

\* FedLoan Servicing ended its contract with the U.S. Department of EducationU.S. Department of Education (ED)The federal agency that oversees federal student aid programs, issues regulations for federal student loans, and is the ultimate lender on Direct Loans. and began transitioning responsibility for the PSLF Program to MOHELA. The student loan servicerLoan ServicerThe company that manages a borrower's federal student loan account, processes payments, and handles applications for repayment plans, deferment, forbearance, and forgiveness on behalf of the U.S. Department of Education. is still processing some PSLF applications as it winds down its business with the federal government.

PSLF Qualifying Payments During COVID

The Education Department has frozen student loan payments, stopped interest from accruing, and given borrowers working for a government or non-profit organization credit towards PSLF.

Payments are set to resume in September — unless President Biden orders another extension. When it does, borrowers who worked in public service from the beginning of the pandemic will have over two years of payments added to their PSLF payment count.

Related: Changes to PSLF

PSLF payments not counting?

Under the temporary rules, any past payment you made on a federal student loan while working in public service can count toward PSLF, regardless of the repayment plan, loan type, or whether the payment was made in full or on time.

If you stop working full-time for a qualifying employer or lose your job, the payments you make after your job status change won’t count toward PSLF. But you won’t lose the progress you made. If you return to work full-time, you’ll pick up where you left off. Those new payments will be added to the count of qualifying payments you had before you lost your job or full-time status.

Related: Why Aren’t My PSLF Qualifying Payments Counting?

How to get PSLF payment credit

• Have the right loan types. Only loans made under the Federal Direct Loan Program qualify for PSLF. If you have Federal Family Education Loans or Federal Perkins Loans, you’ll need to consolidate those loans into a Direct Consolidation Loan. You can do that on the Federal Student AidFederal Student Aid (FSA)The office within the U.S. Department of Education that manages federal grants, work-study, and student loans. It runs the FAFSA, the StudentAid.gov website, and oversees the federal loan servicers. website, studentaid.gov. Read more about FFEL Loan forgiveness.
• Check your employer’s eligibility. Use the PSLF Help Tool to check whether your employer qualifies for the program. If it does, you can use the tool to complete the Employment Certification FormEmployment Certification Form (ECF)The federal form used to certify qualifying employment for Public Service Loan Forgiveness. Borrowers submit the form to their servicer to have qualifying payments counted toward PSLF..
• Submit the PSLF Form to MOHELA. Once the company receives that form, it will work with the Education Department to review your student loan repayment history. The department will write off your remaining loan balance if you’ve made enough payments. If you’re a few payments shy, apply for an IDRIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. plan and keep paying until you make enough payments to qualify for forgiveness.

Related: MOHELA Student Loan Forgiveness

Bottom Line

The temporary changes the Education Department made to the public service program have made it easier to increase the payments that qualify for loan forgiveness. But, the program is still complex, with many moving parts. If you have questions about your eligibility, it might be time to speak with a student loan lawyer. Schedule a call today to get started.

UP NEXT: PSLF Qualifying Employers