Navigating the Public Service Loan Forgiveness Program has been famously difficult. Fortunately, student loan borrowers may find that the process is getting a little easier.
The U.S. Department of Education announced this summer that the PSLF application can now be done completely online, including the required signatures by borrowers and their employers. This change "eliminates delays, yielding a more efficient process," said higher education expert Mark Kantrowitz.
The PSLF program, signed into law by President George W. Bush in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of on-time payments. In 2013, the Consumer Financial Protection Bureau estimated that one-quarter of American workers may be eligible.
Here's what to know about the updated process.
PSLF help tool should make things easier
With the PSLF help tool, borrowers can search for a list of qualifying employers and access the employer certification form.
That form will confirm that you're working in an eligible job and generate an updated tally of how many qualifying payments you've made (by the end, you need 120).
On the tool, you'll be asked to provide an email address of someone at your place of employment who can confirm your position and sign the form. Previously, borrowers needed to track down the right people at their workplaces and get a physical signature from them.
Once the process is complete, the form should automatically be delivered to the Missouri Higher Education Loan Authority (MOHELA). That's the student loan servicer that currently handles PSLF borrowers (previously FedLoan did so).
Try to fill out this form at least once a year, Kantrowitz added, and keep records of your confirmed qualifying payments.
The Education Department says the process should take less than 30 minutes to complete, and that you should have your W-2s or Federal Employer Identification Number handy.
Figuring out if you qualify for PSLF
There are three main requirements for public service loan forgiveness, although recent changes by the Biden administration provide some more wiggle room in certain cases:
- Your employer must be a government organization at any level, a 501(c)(3) not-for-profit organization or some other type of not-for-profit organization that provides public service.
- Your loans must be federal Direct loans.
- To reach forgiveness, you need to have made 120 qualifying, on-time payments in an income-driven repayment plan or the standard repayment plan.
Keep in mind that so long as you remained in public service, all months during the Covid pandemic-era payment pause that's been in effect since March 2020 count toward your 120 needed payments, whether or not you've been making payments on your loans.
Student loan bills are scheduled to resume in October.
The Biden administration recently touted that it has so far forgiven over $45 billion in debt for 662,000 borrowers through its improvements to the PSLF program.
"The Biden-Harris team is as committed as ever to upholding the promise of PSLF and ensuring borrowers who devote their careers to teaching our children, strengthening our communities, and serving our nation get the relief they've earned," Education Secretary Miguel Cardona said in a recent statement.
