How to Take Advantage of the Temporary Changes to Federal Student Loan Forgiveness

For over a decade, earning student loan forgiveness has been needlessly and unfairly complicated.

When the first batch of borrowers eligible for Public Service Loan Forgiveness submitted their applications, over 99% received rejections.

Loan servicers often provided false or misleading information to borrowers. Lawsuits to hold servicers accountable didn’t help many of the borrowers who relied upon lousy information.

Over the past six months, the Biden Administration has created two significant — but temporary — changes to the rules for student loan forgiveness. The temporary changes aim to clear a path for loan forgiveness and help borrowers who unfairly missed out on time towards forgiveness.

The first big announcement was for borrowers working towards Public Service Loan Forgiveness. The most recent announcement was for borrowers working towards the 20 or 25-year income-driven forgiveness.

Expanded Public Service Loan Forgiveness

Expanding Public Service Loan Forgiveness is a huge win for borrowers in public service.

Over the years, I’ve heard from countless borrowers who applied for PSLF and were denied. These borrowers often had loans that were not eligible, or they were on the wrong repayment plan.

The most upsetting detail in many of the reader emails was the statement that servicers told them they were doing everything right and on track for PSLF.

The Limited Waiver on Public Service Loan Forgiveness aims to help these borrowers. If you were on the wrong repayment plan or had ineligible loans such as Perkins or FFEL, PSLF is now possible.

How to Benefit from the Limited Waiver on Public Service Loan Forgiveness

One underrated detail of the limited waiver program is that many borrowers don’t have to take additional steps to benefit. The Department of Education is automatically reviewing old PSLF applications and certifications to update borrower progress.

However, there are two circumstances where borrower action is necessary:

  • FFEL and Perkins Borrowers – If you have ineligible loans, federal direct consolidation is a required step. Under the old rules, consolidation meant restarting the forgiveness clock. However, under the temporary regulations, borrowers that consolidate before October 31, 2022, can get credit for payments made before consolidation.
  • Borrowers who haven’t sent in an employer certification – If you haven’t completed an Employer Certification Form or applied for Public Service Loan Forgiveness, the Department has no record of your public service employment. Submit a PLSF application as soon as possible if you fall into this category.

The Department of Education created the limited waiver under the authority of the CARES Act. This temporary program cannot be extended without new legislation from Congress. In other words, if you need to consolidate or submit a PLSF application, get it done ASAP. If you miss the deadline, you could be out of luck.

Updated IDR Counts

PSLF borrowers were not the only people who received inaccurate or confusing information from their loan servicers.

Many borrowers were directed towards forbearances or deferments when they faced financial hardships. Others signed up for plans like the Extended or Graduated Repayment Plan. In many cases, both suggestions were bad advice. These borrowers could have signed up for an Income-Driven Repayment plan and made progress towards student loan forgiveness.

Analysis of repayment records shows that many borrowers missed out on forgiveness.

The Biden Administration is doing a one-time update of IDR payment records to remedy this issue. Some deferments, forbearances, and repayment periods on ineligible repayment plans may not count towards IDR forgiveness.

How to Benefit from the IDR Count Update

Like the PSLF update, most borrowers don’t need to do anything.

The Department of Education expects to update the IDR payment count by Jan 1, 2023.

However, once again, FFEL loans are a massive exception. If you have FFEL loans, you need to consolidate them before the payment count update is complete.

Typically, consolidation means restarting the forgiveness clock, but borrowers now have the chance to consolidate their FFEL loans, get credit for previous IDR payments, and get credit for some periods of deferments, forbearances, and non-IDR plans.

This program is a huge win for borrowers that have stuck with FFEL loans because they feared a restart of the forgiveness clock.

Final Thoughts

On paper, IDR and PSLF seemed like the perfect solution for borrowers overwhelmed by their student loans.

In reality, a complicated system often resulted in borrowers missing out on excellent opportunities for forgiveness.

These two temporary programs open the door for borrowers to get credit for time towards forgiveness that they might have otherwise lost.



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