Changes Made to Public Service Loan Forgiveness

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Changes Made to Public Service Loan Forgiveness

Some new changes to the PSLF program specifically benefit those with military service. This article explains more about those benefits and who is eligible.

On October 6, 2021, the Department of Education announced several changes to the Public Service Loan Forgiveness (PSLF) program. They made these changes to improve access to the program and make it more successful.

PSLF started in 2007 to provide an opportunity for people who spent their careers in public service to get their student loans cleared, or “forgiven” as it’s called. To get loan forgiveness, you must:

  • Work full-time (30 hrs/week total) for the government or certain types of nonprofit organizations and submit an Employment Certification Form,
  • Have Direct Loans,
  • Be enrolled in an eligible payment plan, and
  • Make 120 voluntary, full, and on-time payments

Recent reports found that very few borrowers have been able to get receive loan forgiveness under the program. This is often because of confusion around the requirements and errors made by loan servicers. The changes announced by the Department of Education aim to simplify the PSLF process and, for a limited time, allow people to retroactively count past payments towards PSLF if certain steps are taken (e.g., consolidating loans, or certifying public service employment). Some of these changes specifically benefit those with military service.

Here are some highlights that you should know about:

  • If you were on active duty and during that time your loans were on forbearance or deferment, those months can now count towards the 120 payments needed for PSLF.
  • If you have a loan, like a FFEL loan, that is ineligible for PSLF, or made payments on the wrong type of payment plan, you can now get PSLF credit for those payments. For many people this will not be automatic: you must take certain steps within the next year to get those credits.
    • For example, if you have a Perkins loan or FFEL loan, you can get credit for the payments made on those loans if you consolidate and fill out the limited PSLF waiver by 10/31/2022.
    • For example, if you have Direct Loans but you made payments under an ineligible payment plan, those past payments will now count as long as you submit an Employment Certification Form.
  • In 2022, the Department of Education plans to automatically credit military service members and federal employees, so that these borrowers don’t have to submit Employment Certification Forms to get PSLF credit.

To read more about these changes, visit the Department of Education’s Press Release or read more on Federal Student Aid’s website.


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