The Limited PSLF Waiver Ended — Here’s How it Worked

The 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. Waiver allowed people who worked in public service anytime after Oct. 1, 2007, to get retroactive credit towards the Public Service Program for all the payments they made under any plan, toward any loan, and whether the payments were made on time or for the full amount due.

The Biden administration overhauled the Public Service Loan Forgiveness (PSLF) Program in 2021 and introduced sweeping changes that have led to nearly 240 thousand federal student loan borrowers receiving over $14 billion in forgiveness. Those numbers will swell as 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 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. tasked with managing the forgiveness program, 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., finishes processing applications from those who applied for the PSLF Waiver.

The PSLF Waiver ended on October 31, 2022, but you can still get relief under that opportunity if two things are true:

• You have Direct Loans or used StudentAid.gov to consolidate your loans into the Direct LoanDirect LoanA federal student loan made directly by the U.S. Department of Education under the William D. Ford Federal Direct Loan Program. Most federal student loans issued since 2010 are Direct Loans. Program before Nov. 1.
• You used the PSLF Help Tool to generate an 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. before Nov. 1, or your employer signed the form before that date, even if you didn’t use the tool.

All hope isn’t lost if you missed the waiver deadline. If you still work full-time for the government, 501(c)(3), AmeriCorps, or another qualifying employer, you can receive PSLF credit through a one-time account adjustment the department plans to do before next summer.

The Income-Driven RepaymentIncome-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 Waiver, or IDR account adjustment, gives public servants credit toward PSLF on monthly payments made late, in installments, or a lump sum. It also counts some of the spent in periods of deferment and forbearance.

Here’s what you need to know about the Limited PSLF Waiver.

Related: Does Forbearance Count Toward PSLF?

What is the PSLF Waiver?

The PSLF Waiver retroactively credits borrowers for past payments that didn’t qualify for traditional Public Service Loan Forgiveness. Aimed at public service workers, it relaxes the rules and responds to less than 2% approval rates for PSLF and 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. applications.”

Related: Do Teachers Qualify for the PSLF Waiver?

The temporary waiver aims to raise that number by allowing borrowers to sidestep the program’s stringent rules and receive PSLF credit for payments made on federal student loans, including:

• Payments made toward Federal Family Education Loans and Perkins Loans.
• Loan payments made under non-qualifying repayment plans.
• Late payments.
• Past payments for less than the full amount.

The new program rules gave military service members a special benefit: all months spent on active-duty count towards PSLF — even if the loans were in deferment or forbearance and not being repaid. It also enabled educators to count time toward Teacher Loan ForgivenessTeacher Loan ForgivenessA federal program that can forgive up to $17,500 of Direct or FFELP loans for teachers who complete five consecutive years of full-time teaching at a low-income school or educational service agency. and PSLF.

The waiver period ended on Oct. 31, 2022. To qualify, you had to have started the consolidation process and applied for the limited waiver by that date.

Does in-school defermentIn-School DefermentA period during which a borrower enrolled at least half-time in school is not required to make loan payments. Interest may or may not accrue during deferment, depending on the loan type. count toward PSLF Waiver?

No, the time spent in an in-school deferment does not count toward the PSLF Waiver. But time spent in specific military-related deferments, economic hardship deferments, and any deferment before 2013, except in-school deferment, will count toward PSLF.

What Does the PSLF Waiver Do?

The PSLF Waiver provides a temporary relief measure that allows you to gain credit for previous loan payments under various conditions. Specifically, you’re eligible if you:

• Had or have a Federal Family Education Loan (FFEL) or Perkins loanPerkins LoanA low-interest federal student loan for borrowers with exceptional financial need, issued by schools under a now-discontinued program. New Perkins Loans have not been made since 2017, but many existing balances are still in repayment.
• Missed a payment deadline
• Paid less than the full amount due
• Were on an incorrect repayment plan

But it’s not just about past payments. This waiver is especially valuable if you’ve made non-qualifying payments in the past, offering a chance to get those payments counted toward loan forgiveness.

Do private loans qualify for the PSLF Waiver?

No. Private student loans don’t qualify for the PSLF Waiver. Similarly, federal student loans you refinanced with a private lender also don’t qualify. But privately-held federal student loans made through the Federal Family Education Loan ProgramFederal Family Education Loan Program (FFELP)The federal program that guaranteed student loans made by private lenders through 2010. Loans issued under this program are commonly called FFELP loans and are still held by millions of borrowers. are eligible for the PSLF Waiver if they were consolidated into a Direct Loan before Nov. 1, 2022.

Related: Can Private Student Loans Be Forgiven?

When did the PSLF Waiver start?

The PSLF Waiver started on Oct. 6, 2021, when the Education Department announced it would temporarily waive certain eligibility requirements to deliver on the program’s promise. The waiver ended one year later, on Oct. 31, 2022.

Who qualifies for the PSLF limited waiver?

For a limited time, the PSLF waiver benefits nearly all federal student loan borrowers who worked full-time for the government or a nonprofit anytime after Sept. 2007. Public servants who borrowed parent loans for their children are the one exception: Parent PLUS Loans aren’t eligible for the waiver.

You need not have worked in public service all those years. You qualify for the waiver opportunity even if you changed employers or left for the private sector. You’ll get credit for the payments you made while working in qualifying employment.

Borrowers eligible for the PSLF Waiver:

• Full-time government and nonprofit employees.
• Retired public service workers.
• Borrowers who no longer work in a public service job — even those who left due to the pandemic.
• Borrowers with joint spousal consolidation loans.

Borrowers not eligible for the PSLF Waiver:

• Parents who borrowed PLUS Loans for their child’s college education, including consolidation loans that paid off Parent PLUS Loans.
• Public servants who only have private student loans — relief is limited to federal Direct Loans.
• Borrowers who stopped working in public service before Oct. 1, 2007.
• Volunteers at government and nonprofit organizations.
• Borrowers who work for a private company that provides services to the government or a nonprofit.
• Teachers and employees who work at a for-profit charter school or university.
• Borrowers who’ve worked only in the private sector.

Related: PSLF vs TEPSLF

How to apply for the PSLF Waiver

If you had FFEL or Perkins Loans, you also needed to use that site to submit a consolidation application before the Halloween cutoff.

Related: How to Consolidate Student Loans for PSLF?

If you had Parent PLUS Loans, you were locked out of the waiver unless you had other federal student loan debt you borrowed for your education. To qualify, you would have needed to combine the parent loans with your loans. The new Direct Consolidation Loan will be forgiven — even if some loans combined into the new loan were Parent PLUS Loans — once it reaches 120 qualifying payments.

Learn More: How to Get Rid of Parent PLUS Loans

How long does it take to process the PSLF Waiver?

The Education Department first estimated it would take about 90 days to process PSLF Waiver applications. But after an unprecedented number of people jumped on the opportunity — many in the days before the program ended — processing has ground to a near halt. Many borrowers have waited six months or more to find out their payment count.

You can check your PSLF Waiver status by contacting MOHELA. You can also get updates and answers to your questions through mohela.com if you create an online account.

Is there a PSLF Waiver form?

The Education Department didn’t release a special form or forgiveness application for the PSLF Waiver. Instead, borrowers could apply for it by using the existing PSLF Form available on StudentAid.gov via the PSLF Help Tool or by downloading the Employment Certification Form.

‍PSLF Waiver Refund Opportunities

Some borrowers will get a refund for extra PSLF payments made on Direct Loans, according to the Education Department. The refund is automatic for any payment made on Direct Loans over the 120 qualifying payments threshold for PSLF.

You won’t get a refund for excess payments made on FFEL Loans before consolidating. The same goes if you’ve already had your loans forgiven or paid them off: You aren’t eligible for a refund of past payments, according to 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..

You can also get a refund for payments made during the payment pause. That refund opportunity is separate from the PSLF refund opportunity.

Related: How to Apply for Student Loan Forgiveness

What if the PSLF Waiver doesn't forgive my loans?

The limited waiver has brought billions of dollars of student debt relief to tens of thousands of Americans, many of whom were denied forgiveness for years due to having FFEL, Perkins, or another non-qualifying loan type. It has also updated the payment counts for many more.

If the PSLF Waiver doesn’t forgive your remaining balance, you must keep working in public service and making payments on your loans until you’ve made 120 qualifying payments.

New PSLF requirements

The Education Department released new PSLF requirements last month that permanently broadened the kind of payments that qualify. Under the updated guidance, borrowers can receive credit toward PSLF for partial, late, and lump-sum payments. Adjunct professors will get 3.5 hours of credit for every taught. The department also clarified that it would now define full-time employment as 30 hours per week.

What happens after the PSLF Waiver ends?

MOHELA and the Education Department will continue processing PSLF Waiver applications until they get through the case backlog. Many borrowers will have their loans forgiven before repayment begins in 2023*, but some may need to keep making their student loan payments. If you make all 120 payments under the limited PSLF Waiver and continue paying after the forbearance has ended, the department will refund those extra payments.

Keep in mind that you won’t owe taxes once the loans are paid off, but your credit score might temporarily drop a bit as your credit report is updated to show that the loans are closed.

\* As his cancellation plan is bogged down in the courts, President Joe Biden extended the payment and interest rate freeze that began in March 2020 to help people struggling financially due to the Covid-19 pandemic. The latest payment pause will last 60 days after the litigation is resolved. If the student loan debt relief program isn’t started by June 30 and the litigation isn’t resolved, payments will resume 60 days later.

Related: PSLF Weighted Average Consolidation Rules

Looking for PSLF Waiver help?

Are you tired of dealing with the financial and psychological strains of the PSLF program on your own? If you need help with PSLF Waiver eligibility or have questions about the program, please reach out.

Schedule a call today to get personalized advice on satisfying the PSLF requirements and other student loan forgiveness strategies. I’ve helped thousands of people across the country take the steps necessary to qualify for loan forgiveness programs and lower their monthly payments.

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