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The US Department of Education announced on October 6, 2021 that it would expand the Public Service Loan Forgiveness (PSLF) program, despite the CARES Act payment pause continuing to extend forbearance for student loans. This waiver is intended to provide extra support to federal employees and other public servants who have government loans. However, the limited PSLF waiver has an expiration date, October 31, 2022, to be exempt from the ordinary criteria of the public service loan forgiveness deadline.
Both current and past government employees will benefit from the PSLF changes. Regarding final approval for the TEPSLF/PSLF program, the Department of Education has relaxed some of the normal requirements, such as being enrolled in an eligible repayment program, making payments within 15 days of the due date, and making partial pslf payments.
TABLE OF CONTENTS
Eligibility of Borrowers for PSLF
Requirements for the Repayment Program
Payment in Full
Payments are Made on a Monthly Basis
Amount of PSLF Forgiveness
Submitting the PSLF Application
PSLF/TEPSLF Program with Limited Waiver
Employed Full-time by a Qualified Person
Consolidation of FFEL Loans
Eligibility of Borrowers for PSLF
The loans for which pslf forgiveness is sought are not defaulted.
Is a full-time employee of a public service organization or a full-time AmeriCorps or Peace Corps volunteer -
After October 1, 2007, completes 120 qualified payments on qualified direct loans for 120 separate months.
Unless the borrower is employed by the Department of Defense or is in the AmeriCorps or Peace Corps, the monthly payments must be submitted within fifteen days of the bill due date for the full payment balance.
Requirements for the Repayment Program
A total of 120 qualifying payments
While the borrower is enrolled in one or more of the following repayment programs, the mandatory 120 monthly installments must be completed.
An income-based repayment plan, unless the borrower is a parent PLUS borrower. (IBR)
An income-contingent repayment plan, unless the borrower is a parent PLUS borrower. (ICR)
A Repayment Plan that is Standard. or
Any other repayment plan if the monthly payment amount is not less than what would have been paid under the Direct Loan standard repayment plan, excluding the alternative repayment plan.
Payment in Full
If a borrower makes a lump-sum payment on an eligible loan for which forgiveness is sought using all or part of a Segal Education Award received after a year of AmeriCorps service, or if a borrower makes a lump-sum payment on an eligible loan for which forgiveness is sought using all or part of a Segal Education Award received after a year of AmeriCorps service.
The one-time payment should be completed within 6 months after exiting the Peace Corps or by using all or part of a Peace Corps transition payment
If a lump sum payment is paid on behalf of the borrower under 10 U.S.C. 2171, 2173, 2174 or any other student loan repayment plan operated by the Defense Department
The borrower will be considered to have made qualifying payments of the lesser of the following sums by the Secretary:
The amount of payments that follow from dividing the lump sum payment amount by the monthly payment amount that the borrower would have paid under their repayment plan;
OR
Payments are Made on a Monthly Basis
The Secretary considers lump sum payments made on behalf of the borrower under 10 U.S.C. 2171, 2173, 2174, or any other student loan repayment program administered by the Department of Defense to be qualifying payments under paragraph (c)(2) of this section for each year that a lump sum payment is made. Annually, pslf employment certifications are to be submitted to update the borrower's total number of qualifying payments.
Amount of PSLF Forgiveness
The total principle and accrued interest on all eligible loans is forgiven after the borrower completes the 120 monthly qualifying payments required by 685.219 paragraph (c)(1)(iii). Borrowers must fill out an application for loan forgiveness.
Submitting the PSLF Application
A borrower must complete a PSLF certification application after completing 120 monthly qualified payments on loans that are eligible.
IF YOU ARE ELIGIBLE FOR FORGIVENESS:
This decision is relayed to the borrower from the Secretary of State, and the qualified loans' outstanding balances are forgiven.
IF YOU ARE NOT ELIGIBLE FOR FORGIVENESS:
Collection of the debt is resumed, and deferment of principal and interest payments is granted for the period during which collection efforts were discontinued.
The borrower is notified that their application has been denied, explains the reason for the decision, and advises them that their loan will begin to be collected again.
Interest which may have been accrued but not previously paid during this time period may be capitalized by the Education Secretary.
PSLF/TEPSLF Program with Limited Waiver
Prior payments, regardless of loan type, repayment plan, or whether made in full or on time, may be regarded as eligible payments. All you need is qualified number or payments and employment.
This rule applies to borrowers who:
Loans were made directly to you
Those who have previously consolidated their student loans into the Direct Loan Program, as well as
Those who consolidate their student loans into the Direct Loan Program by October 31, 2022.
The Limited waiver does not apply to Parent PLUS loans.
Several conditions must be met in order to earn further qualifying payments:
Employed Full-time by a Qualified Person
Prior payments must have been made while you were working full-time for an eligible employer. If you were employed for total average of 30 hours per week or more with one or more qualifying part-time employment at the same time, you will be deemed full-time. Since the PSLF Program began on October 1, 2007, you can only receive credit for payments made after that date.
Consolidation of FFEL Loans
If your loans are Federal Family Education Loan (FFEL) Program, Federal Perkins Loans, or other federal student loans that aren't Direct Loans, you must consolidate them to become eligible for this Limited PSLF Waiver.
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