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How to Apply for PSLF

June 11, 2022
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Public Service Loan Forgiveness (PSLF) is a government-backed program originally established to attract the workforce to apply for government and nonprofit organizations in exchange for student loan forgiveness. After ten years of public service, or 120 qualified student loan payments, the applicant’s student loans would be forgiven with no taxable consequence. While this basic concept is still applicable, but it hasn’t been without turbulence. Here is a brief history of the past PSLF program.

The PSLF program was originally set up on a rigid and somewhat nebulous system, requiring the applicants to apply for PSLF before any payments were considered qualified payments. Additionally, applicants would apply for PSLF and would have their applications approved without confirmation that they were accepted into the PSLF program; the applicants were unable to know if they qualified for student loan forgiveness until after 120 consecutive on-time qualified payments. There were stories of applicants making one late payment after years of qualified payments, only to find out they had to start their loan forgiveness journey over. To make the program even more challenging to navigate, there was little help in determining which repayment methods were considered “qualified” options, and there were many stories of applicants being denied loan forgiveness because they selected the wrong payment method, yet there was no one available to help navigate and track the PSLF program, and no concrete rules were posted for surveillance.

A qualified payment options is typically a payment that matches your ability to pay, such as the Pay as You Earn (PAYE), Revised Pay as You Earn (REPAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) repayment plans.

Thankfully, many of those issues seem to be much less of a nuisance, and the government has done a much better job of making the PSLF program potentially more reliable. One of the first improvements of the PSLF program was an improved tracking system in the applicant’s online portal to help understand the number of qualified payments remaining for loan forgiveness. Around the same time, the need to have 120 consecutive qualified payments was amended to nonconsecutive 120 qualified payments; it was around this time that payments made prior to PSLF application could be included for qualified payment consideration. 

These changes greatly changed the face of the PSLF program, and it made loan forgiveness more obtainable. Since enacting these changes, there have been two additional changes made that makes the PSLF program even more reasonable:

First, the US government opened the opportunity for previously excluded student loans to be included for loan forgiveness consideration. These loans include older, government-originated loans that are not considered “Direct” loans. Applicants have until October 31, 2022 to apply for PSLF to get these otherwise non-included loans to be considered for loan forgiveness. The second thing the government has done to widen the loan forgiveness program is allow the durations during both loan deferment and forbearance to be considered as approved qualified payments on the road to loan forgiveness, accelerating loan forgiveness to those who had financial burdens during training and could not begin loan repayment.

Once the parameters of the PSLF program are understood on a basic level, it’s time to review your student loans. You can log in to your servicer’s dashboard or set up an account and log in at studentaid.gov to review your loans. If you have not refinanced your loans with a private lender, e.g., SoFi, Earnest, Laurel Road, etc., and you work for a government or nonprofit institution (most hospitals are included), then you may qualify for PSLF.

To be considered for PSLF, you will need to set up an account at studentaid.gov and consolidate your loans through the Federal Direct Consolidation Loan Application. If you are not using any guidance to consolidate your student loans, and you are unsure of the process, there is an intuitive demo available to walk you through the steps needed to consolidate your loans. You can find the demo here.

Once you’re ready to consolidate your student loans in the Federal Direct Consolidation Loan Application, go to studentaid.gov, hover over the “Manage Loan” dropdown, and click on “Consolidate My Loans”. You’ll need to have access to your student loan information and be able to login through your current loan servicer from the application. After consolidating your loans, you will likely end up with FedLoan as your new student loan servicer.

After the loans are consolidated into a Federal Direct Consolidation Loan, the student loans are then eligible to be considered for the PSLF program, where you will need to submit a PSLF application, Public Service Application for Forgiveness. The PSLF application is a total of six pages, but only the first two pages need to be completed. Page one is used to identify you, and page two is to identify your current and former employers to see if PSLF is eligible. You will need to submit page two for every employer you have had; it is not uncommon to submit five or six or more of this same page.

Page two is the more difficult page to submit because you will need to gather some basic information about former employers, as well as have an officer of authority sign off on the form. If you no longer have a contact at your former employer, it may save some time to call the HR department directly, as they have likely dealt with these forms before. I suggest you complete and gather all the “Page twos” needed before submitting the application. Once you have all the necessary information, there are instructions on the application that can direct you where to send the application; you can submit it by mail, fax, or upload it directly on the studentaid.gov website.

Once the application is received in good order, you will be able to confirm your PSLF enrollment and track your completed qualified payments. Please note that “the system” is very backed up, so it may take several months for this to occur.

Applying and being accepted into the PSLF program is great, but it is suggested that some regular maintenance occur to keep the PSLF program on track. At most, you should resubmit the PSLF application once per year to verify your loan forgiveness application. At a minimum, I suggest this be completed every two to three years. This maintenance will help keep your PSLF progress tracked and verified. Additionally, as you change employers, you will want to resubmit the PSLF application.

Applying for PSLF can be intimidating if you aren’t aware of the history and the necessary steps. It seems there are a lot of involved steps, yet the process is simple considering tens of thousands or even hundreds of thousands of dollars are potentially being forgiven. Additionally, the rules of the PSLF program are always evolving, so it’s important to pay attention to the changes that occur so you can update your loan progress or identify any opportunities these changes can provide. If you are unsure if your loans qualify or how to make it through the process, find a knowledgeable advisor to help.