Public Service Loan Forgiveness Update, PSLF waiver!!!

Hi Smarty Pants,

The Public Service Loan Forgiveness Program (PSLF) gives student loan forgiveness to people working for the government or non-profits. Unfortunately, lots of people were denied PSLF student loan forgiveness due to red tape WHICH HAS BEEN REMOVED UNTIL OCTOBER 31ST, 2022.

Keep reading to learn if you should apply to get your student loans forgiven through the PSLF program and more about the PSLF waiver!

 

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What is PSLF? (Public Service Loan Forgiveness)

Public Service Loan Forgiveness (PSLF) is a program passed by Congress in 2007 that gives student loan debt relief to people who work for non-profits or the government for 10 years while they’re repaying their student loans. This means the first cohort that was eligible for PSLF was in October of 2017. BUT the vast majority of people who applied once they passed their 10 year mark were denied public service loan forgiveness, which is why the waiver was enacted.

Why is there a PSLF waiver?

You may have heard how the Public Service Loan Forgiveness program was a bit of a...well, I’m having a hard time thinking of a description that doesn’t involve a curse word. It was a bit of a quagmire rolled up in a SNAFU, dipped in poopy sauce, and tied up with red tape. 

Before the PSLF waiver, to get PSLF, you had to:

  1. Be employed, full-time, by a U.S. federal, state, local, or tribal government or not-for-profit organization at the time you apply for PSLF

  2. Have Direct Federal Loans 

  3. Repay your loans under an income driven plan

  4. Make 120 on-time, in-full payments, after Oct. 1, 2007; under a qualifying repayment plan; for the full amount due as shown on your bil

Unfortunately, lots of people missed a payment here or there, or were on the wrong payment plan, or had FFEL loans - so even though they had federal student loans, worked for a qualifying organization, they didn’t get PSLF. Which was kinda BS.

BUT THE PSLF WAIVER HAS SOLVED THESE ISSUES!!!

If you were denied before YOU HAVE ONE YEAR TO GET YOUR STUDENT LOANS FORGIVEN!!!!!

excited woman saving money

SWEET!

Okay, if you want to watch a video on it, press play. If you want to read about the PSLF waiver, read on.

Do I qualify for the new Public Service Loan Forgiveness (PSLF) waiver? PSLF 2021-2022 UPDATE!!

The lowdown on the PSLF Waiver

  • If you were denied only because you didn’t have Direct loans, but you do have federal loans (FFEL or Perkins, but there are a few others), you can get your loans forgiven if you consolidate them to a Direct Loan at studentaid.gov

  • If you were denied only because you had some payments that were off by a few days or a few dollars, you can now get your loans forgiven.

  • If you were denied only because you weren’t in the right payment plan, you can get your loans forgiven.

  • If you were denied because you no longer work for a qualifying organization, you can now get your loans forgiven if you paid 120 months while working for a qualifying organization

Just like everything else to do with money, there are many complex situations that were previously not eligible but are now. Keep an eye on studentaid.gov - but they haven’t updated all the pages, so there’s a lot of old info on there right now.

Note: Parent PLUS loans or loans that have been paid in full do not count towards this. I know, that's disappointing, but let's focus on the bright side - ZOMG WE HAVE A YEAR TO GET OUR STUDENT LOANS FORGIVEN!

Who should apply for the PSLF waiver?

If you:

  • Have any kind of federal student loans

  • Have worked in non-profits (or for the government) full-time for ten years

  • Have been repaying your loans while working at these non-profits

  • AND ESPECIALLY IF YOU were previously denied/ineligible for PSLF

How to apply for the PSLF waiver:

  1. Log into (or create an account with) studentaid.gov

  2. Confirm that you have a federal loan/s, (https://studentaid.gov/aid-summary/loans)

  3. Confirm that your employer/s are eligible for this program (first step in the Help Tool: https://studentaid.gov/pslf/)

  4. If you do not have a Direct loan but you do have federal loans, consolidate into a Direct Loan (there’s a link on the summary loans page)

  5. Submit a PSLF form with the Help Tool

If you do have them forgiven, first, dance party.

dancing because they got the PSLF waiver

Second, increase savings and retirement but don’t put it all towards future you. Keep some of that extra monthly cash for all the stuff you LOVE to do but feel like you can’t afford. Learn some of my one-minute tips for saving money, stressing less, and getting control over your money from my checklist!

I’m super pumped about this one-year waver because I want to live in a society that encourages our best and brightest to spend years as teachers and working at non-profits making society better rather than being forced into a churning corporate machine they have no passion for simply because they have enormous student loans to pay back. The PFLS program is a great idea that had a terrible execution (something like only 2% of applicants have had their loans forgiven)

I hope this helps you!

Cheers,

Ms. Moody

student loansKate Moodypslf