Concerned about your PSLF – student loan forgiveness for public service?

The processing of PSLF was turned over by Mohela to ED during the three months preceding July 1 and all work was paused during the transfer. Starting July 1, ED would have re-started reviews as it was doing the calculations from that point forward. Then the whole system paused July 1 with the pending SAVE litigation and injunctions against it and the 400 pages of regulations that were to take place July 1. There is nothing delaying PSLF calculations and forgiveness, but ED has not restarted those for some reason. There is a hearing Oct 24, where there may be some clarification on what ED can continue to do, but the circuit court refused to clarify its ruling about two weeks ago. I feel that ED is not processing PSLF right now as a pollical move to throw more of the educational system into chaos. Either way, we can’t do anything about it.

Eventually, PSLF will restart its calculations.

If you are short just a few months time, you could choose to do the 10 year standard payment which counts toward PSLF and then submit an application for PSLF discharge. Make sure you are using the 10 year standard, not 20-30 years. It will be higher at 10 years, but it’s the only standard payment that counts for PSLF. If that payment is too high, and they begin re-processing IDR applications (they are paused right now), you could file a request for another IDR plan other than SAVE – such as IBR. Finish the 120, then file the PSLF discharge application. We were finding that paper IDR applications were being processed, but they too seem to have stopped. Do nothing online, the entire online portals are paused. When sending a paper application, be sure to send certified mail with tracking information.

You have to remain employed at the qualifying non-profit or gov’t agency until your loans are discharged and the final application is approved. There is no way around that at present.

If you go into forbearance now (whether automatic or you request this), these months will not count toward IDR or PSLF, but no interest will be charged, and no payment is due. It’s likely we will have a ruling on SAVE by next summer. PSLF is not being challenged, only the reduced payment option under SAVE and its accompanying regulations. But the entire system has been mostly frozen since July.

The IDR audit is supposed to occur for all remaining Direct loans or FFEL loans managed by ED at the end of this month (this may account for the discrepancy in the count):

Crediting Borrowers with Earned Progress toward Forgiveness

In April 2022, the Department announced one-time improvements to address historic inaccuracies in the count of payments that qualify toward forgiveness under IDR as well as practices by loan servicers to put borrowers into forbearance in violation of Department rules. As a result of these past failures, borrowers who were in repayment for 20 or 25 years or longer are unable to receive forgiveness under IDR, and borrowers who were in repayment for 10 years or longer while working in public service may not receive PSLF. These one-time improvements will adjust a borrower’s account by awarding credit for:

Any month in which a borrower was in a repayment status, regardless of whether payments were partial or late, the loan type, or the repayment plan;
Any month in which loans were in an eligible repayment, deferment, or forbearance status prior to consolidation;
Months while a borrower spent at least 12 months of consecutive forbearance;
Months while a borrower spent at least 36 cumulative months in forbearance; and
Any month spent in deferment (exception for in-school deferment) prior to 2013.

To receive this credit toward IDR, however, a borrower must have Direct Loans or FFEL loans managed by the Department. Borrowers who have other types of federal loans have to consolidate into the Direct Loan program to receive the credit.

These periods will also result in credit toward PSLF if the borrower has certified qualifying employment that overlaps the same periods. Borrowers pursuing PSLF must consolidate any non-Direct Loan for eligibility.

To challenge the count that you believe is incorrect, go here and log in using your FSA username and password and submit a request for reconsideration: https://studentaid.gov/manage-loans/pslf-reconsideration

If your count will be affected by the IDR audit, ED recommends you wait until after the audit to address any errors in the count. That being said, ED provides a deadline to submit a reconsideration request: If you disagree with the qualifying payment count you received in a letter from the PSLF servicer, you must submit your PSLF reconsideration by a certain deadline depending on when you received your letter. If your letter is dated before July 1, 2023, you must submit your PSLF reconsideration request by December 29, 2023. If your letter is dated July 1, 2023, or after, you must submit your PSLF reconsideration request within 90 days of the date of the letter.

Those deadlines may not apply or may change due to the pause in PSLF processing, but there is no information on that.

Here is a Youtube video we did on PSLF and a blog on PSLF this summer:

https://www.youtube.com/watch?v=NEA-z8kyYXM

https://www.tampabankruptcylawyerblog.com/questions-about-pslf-processing-for-student-loan-forgiveness-and-whats-happening-now/

If you need help with all this, please reach out — use the link below or call 813-258-2808 or email info@christiearkovich.com.