a year ago
The rumors of student loan forgiveness program cancellation have been swirling around for a while. Still, the Trump administration is providing a second chance to apply for public service loan forgiveness. So get ready, student loan borrowers!
The federal spending plan of $1.3 trillion foresees allocating $350 million in student loan debt forgiveness. This includes the student debts owed by borrowers qualifying for the Public Service Loan Forgiveness program but got mistakenly enrolled in the wrong repayment plan. According to the PSLF, student borrowers have to make 120 payments to get forgiveness for the rest of the debt.
Not Getting the PSLF?
Landed in a group of borrowers who expected to qualify for PSLF, but aren’t meeting the requirements? You’re not the only one! Take a look at the PSLF checklist to make sure you’ve submitted all the papers properly.
The most important condition of being eligible for PSLF is working full-time for an employer that qualifies. Making the mandatory 120 payments and documenting them with employment certification forms is crucial.
Which employers qualify?
The employment certification form for every employer you’ve worked for while making payments must be submitted to FedLoan Servicing. This servicer processes PSLF employment certifications and applications.Submit a Public Service Loan Forgiveness application only after all 120 qualifying payments are made.
To be an eligible PSLF applicant, your loans must be part of the William D. Ford Federal Direct Loan Program. It is necessary to verify having direct loans. To do this, call your loan provider or log into its online portal. Alternatively, use your FSA ID to sign in to your Federal Student Aid account.
In case you have no direct loans, consolidate those other federal loans into a new, direct consolidation loan to qualify for PSLF.
Please mind: payments you made prior to loan consolidation don’t count toward the 120 payments required for PSLF.
According to Nerdwallet, PSLF makes sense for qualified borrowers choosing the repayment periods over 10 years. Among borrowers selecting longer repayment terms, only those in income-driven repayment plans are eligible for PSLF. Graduates and users of extended repayment plans are not.
To verify your current repayment plan, call your loan provider or log into its online portal. Alternatively, use your FSA ID to sign in to National Student Loan Data System and find your repayment plan listed in the “Repayment Plan Type” box.
To switch to any of the 4 income-driven repayment plans, apply for a chosen income-driven repayment plan on the Federal Student Aid website.
The US Department of Education is yet to issue a PSLF application guidance for borrowers who have on graduated or extended repayment plans. Stay tuned for the upcoming updates the Department has to provide until late May in accordance with the new budget act.
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