Getting Started with PSLF

There is a program called the Public Service Loan Forgiveness (PSLF) program, that provides student loan relief if you work for a government organization (federal, state, local or tribal) or a qualifying non-profit group. Our Financial Guides have a great deal of experience helping qualifying employees. In fact, we recently helped a school district forgive an average of $94,000 in student loans for their teachers.

See below for an example of how we guide employees through the PSLF process!

I was told you would help us with the student loan forgiveness application. Could you please tell me how to get started?

- Diane

Let's talk about getting started on your PSLF journey. 

I said it, journey, and it is a journey! Getting started on the Public Student Loan Forgiveness (PSLF) program is a process that can be daunting and frustrating. Where do you go for information, and who do you trust?  At first, you review the requirements, and it seems pretty straightforward, and it should be! Remember getting your PSLF approval is at least a 10-year process of you making qualified payments. Although qualified payments don’t need to be consecutive, they should be paid on time and for the total amount. A qualifying employer must employ you full-time at the time of application and during the approval process. 

According to the Studentloan.gov site, “The PSLF Program forgives the remaining balance on your Direct Loans after making 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.” 

It seems simple enough! However, it’s all in the details. Make sure you have crossed every “t” and dotted all your “i”s. It is signing your application the way they want it to be signed. I am not kidding! There are three types of signatures FedLoan servicing is currently accepting: 

1) hand-drawn from a signature pad, mouse, or finger

 2) a scanned photo of a signature that was hand-drawn on paper, and

 3) a wet signature that was drawn in ink and sent in its original format. No electronic signatures are accepted. 

Don’t forget to add your name and social security number on the top of the second page of the employment certification application. It will get sent back. 

Also, your company determines what full-time employment is for them and if they say you are a full-time employee working 30 hours, have them fill out and certify their portion of the application and submit it. Remember to keep employment history records; this can be W2s and any details of your specific situation. Remember, you need to recertify your Income-Driven Repayment annually. We recommend submitting the employer certification application yearly or at least when you switch employers. This way, you can be positive that the payments towards your student loans are indeed qualified payments. 

I've put together some information about the qualifications and next steps. Generally speaking, to qualify for PSLF, the federal student loan borrower must:

• Make 120 qualifying payments under an income-driven repayment (IDR) plan
• While employed full-time with a qualifying employer (government, 501(c)(3) not-for-profit)
• Have Direct Loans or consolidate into Direct Consolidation Loans
• Remain employed with a qualifying employer when you apply and receive forgiveness.

(Check with your loan servicer to see what payment plan you have if you're unsure.)

Your first step is to become a PSLF Ninja, well, maybe not quite! It is to use the PSLF Help tool to check and see if you qualify for the program. You will (1) verify if your employer is eligible, (2) determine if you need to consolidate your loans, and (3) you will need to submit the Employment Certification Form.  Remember to complete an employment certification application for every employer and submit your Income-Driven Repayment certification annually.  The tool will guide you through what next steps to take. As a side note, this tool doesn’t save your responses, so make sure you gather all of your documents and be prepared to finish it in one sitting - approx—30 minutes with all of your necessary documentation in hand.

Also, there is a limited waiver until the end of October, under which past payments made under other repayment plans count as "qualifying" for purposes of PSLF. You can see the changes during this time at PSLF limited waiver. So, make sure you take advantage of these changes if they apply to your situation. 

Maybe you are like Diane and just not sure where to start this program, or perhaps you have employees like her that might be eligible for PSLF; please send them our way to help them with this process. It can be daunting to get started, but we are ready to break it down into manageable steps and help them work through the program.