The PSLF Program, which began in October 2007, promises tax-free loan forgiveness to borrowers who work 10 years in public service jobs and make regular payments — 120 qualifying payments in total.
This seems like a clear-cut proposition. But in practice, many public servants who believed they qualified learned they weren’t eligible because they had the wrong types of federal student loans or paid their loans under the wrong plan.
The US Department of Education rejected the applications of more than 98 percent of those who applied.
Lawmakers tried to fix the program by creating the Temporary Expanded Public Service Loan Forgiveness Program. But TEPSLF was troubled by the same complexity that made the original initiative ineffective. And it didn’t fix the wrong loan problem. Help was limited to borrowers who made payments under the wrong type of repayment plan.
For years, the Education Department resisted giving borrowers credit for their payments towards ineligible loans, insisting it lacked the authority to do so. But in late 2021, under cover of the coronavirus pandemic, the department used the Heroes Act to temporarily relax the program’s rules in times of national emergency.
This limited relief fixes both the wrong loan and the wrong repayment plan problem. It gives borrowers credit toward forgiveness for payments made on FFEL and Perkins Loans and payments made under ineligible repayment options. The PSLF Waiver will also automate eligibility for federal employees and allow months spent on active duty to count toward PSLF, even if the service member’s loans were on a deferment or forbearance rather than in active repayment.
To get retroactive credit for previously ineligible student loan payments, borrowers who still have FFEL or Perkins loans need to do two things:
Parent PLUS Loans aren’t eligible for the waiver.
Learn More: What is Public Service Loan Forgiveness?