Are you on the path to having your student loans forgiven using the Public Student Loan Forgiveness (PSLF) program? Are you sure? Did you know that the American Federation of Teachers recently sued the major student loan servicer Navient for misleading thousands of Americans about the PSLF and not actually helping people enroll in the program? Did you know that of the first 28,000 borrowers to apply for PSLF (after 10 years of payments) only 96 were approved? So please, take the time to confirm that you are taking the correct steps.
Here are the basics
PSLF is a program created to encourage college graduates to take lower-paying jobs by offering to forgive student loans (but only Direct Student Loans!) after 10 years of payment if they also have a qualifying job for those 10 years. To prove that your job qualifies you have to submit an Employment Certification Form for EACH year of work. This can all be done at the end of the 10 years, but it is better to make sure your work is counting along the way rather than work for 10 years and find out it doesn’t. Finally, what most people don’t know is that there is only one student loan servicer that holds all PSLF loans: FedLoan. If your student loans are being serviced by anyone else (Navient, CornerStone, EdFinancial, Sallie Mae, etc.) they will NOT be able to help you have the loans forgiven through PSLF. If this is you, keep reading, there is hope!
So how do you make sure you’re enrolled in PSLF and your loans will be forgiven?
Regardless of whether you just graduated or you’ve been on the job for years, go ahead and fill out the Employment Certification form starting after your first year on the job (and each year after that).
Per the instructions on the form, submit it to FedLoan Servicing (PHEAA). They will work with you if the form is incomplete or if they need more information to determine if your work qualifies.
Assuming your work qualifies for PSLF, FedLoan will become your student loan servicer. I’ve heard of some people getting tripped up here and missing a month of payment, so try to make sure you are paid up before the loan transfers.
After your 10 years of payments, you file the Application for Forgiveness. This time the program may decide that your work did not qualify after all (even if they already confirmed along the way that it did). But you are far more likely to get their approval if you were checking in along the way.
What if I've already worked my 10 years?
If you have already been working, or have already completed your 10 years and been told by your student loan servicer that you don’t qualify for PSLF, go through the steps above for your previous years of employment. This will require getting your employer to verify work for years ago, but the forms are free to complete and there’s nothing to lose by giving it a shot (Note: you can be in PSLF and an income-based repayment plan at the same time).
For more help go to the Government website built to help those attempting to use the PSLF program.