If you have federal student loan debt and work in public service, you may already qualify for loan forgiveness—or you may be closer to qualifying than you think. But the Office of the Attorney General for the District of Columbia (OAG) has learned that at least one student loan servicer has provided inaccurate information about the Department of Education’s Public Service Loan Forgiveness (PSLF) program to thousands of DC residents.
During the COVID-19 pandemic, the Department of Education temporarily relaxed some of the rules around its PSLF program. These changes give borrowers a chance to correct past errors and claim credit for past loan payments—and some periods of deferral or forbearance—that would not otherwise count toward loan forgiveness. This includes payments from all federal loan programs or repayment plans, including those that were not previously eligible. But this process is not automatic, and the deadline to have previously non-qualifying payments to count towards PSLF is set to expire on October 31, 2022.
OAG’s consumer protection team is working to make sure the loan servicer corrects the false information it provided to DC consumers. We are also issuing this alert to warn DC residents of potential misinformation, ensure they have accurate information and resources to make decisions about their student loans, and encourage them to report any misinformation to our office.
This opportunity to gain credit towards the PSLF credit is separate from President Biden’s recent announcement about debt cancellation. Because the announced cancellation will provide $10,000 or $20,000 in relief, the OAG encourages all DC residents to determine whether PSLF applies to them, as it would cancel a qualifying borrower’s entire loan balance, and to take all necessary steps before the October 31, 2022, deadline.
Here is more information about the PSLF Program, the temporary waiver, steps you can take before the October 31 deadline, and how you can get more help:
What is the PSLF Program?
The PSLF Program was created by Congress in 2007. It was intended to provide debt relief for federal student loan borrowers who work in public service. Through the PSLF Program, borrowers who work for government or certain types of non-profit employers can have the remainder of their student loan debt cancelled after they make ten years (120 months) of qualifying loan payments. Prior to the Temporary Waiver, only payments made on Direct loans while enrolled in certain payment plans counted towards the 120 payments required to apply for loan forgiveness. (Check whether your employer qualifies for PSLF using the Department of Education’s tool here.)
What is the PSLF Temporary Waiver?
On October 6, 2021, the Department of Education announced a temporary waiver that relaxed some of the requirements around which student loan payments can be counted toward loan forgiveness. The waiver allows borrowers to receive credit for past loan payment periods that did not otherwise qualify for the PSLF program. This waiver is only in effect through October 31, 2022. To benefit from this waiver, all borrowers must certify any period of qualifying government or non-profit employment by this deadline by filing a PSLF Form, and any borrower with a federal student loan that is a not a Direct loan must consolidate their loan by this deadline.
Given the October 31st deadline, borrowers should confirm their qualifying employment even if they have not yet received confirmation of their loan consolidation. If you have not yet received confirmation of consolidation, we recommend certifying your employment by sending in a physical copy of the PSLF form via certified mail, rather than using the online PSLF Help Tool.
Borrowers with only Direct loans who have already certified their entire employment history do not need to recertify or take any additional steps.
Summary of Changes under the Temporary PSLF Waiver
- Previously non-qualifying loan payments will now be counted. During periods for which you certify your eligible employment (or have previously certified all of your eligible employment), you will receive credit for past periods of repayment that would otherwise not qualify for PSLF. Months in which you failed to make a payment, paid late, paid the wrong amount, paid under the wrong repayment plan, or paid on a loan that was later consolidated will count towards forgiveness under the waiver. These payments will count as long as your loans were not in deferment, forbearance, or default. (NOTE: As part of a separate initiative, some time spent in forbearance or deferment may also count toward loan forgiveness. See below for more information under “Summary of the Department of Education’s One-Time Account Adjustment.”)
- Payments on non-qualifying loan types can now count. Outside of the temporary waiver, only payments on Direct loans counted towards the 120 payments. Under the temporary waiver, payments made on non-Direct loans, such as Federal Family Education (FFEL) Program loans or Perkins loans, can also be counted toward loan forgiveness. For non-Direct loans payments to qualify for PSLF and for the waiver you'll need to convert your loan to a Direct Consolidation Loan through a process called consolidation.
- IMPORTANT: If you consolidate your loans by October 31, 2022, periods of repayment on loans before consolidation will count towards your 120 PSLF payments. Consolidating your loans before October 31, 2022 WILL NOT restart your PSLF payment count. (After the waiver ends on October 31, 2022, consolidating could result in restarting your PSLF payment count.)
- Currently, Parent PLUS Loans are not eligible to benefit from the waiver, unless they are consolidated with a non-Parent PLUS Loan.
- Note on Employer Requirement: The qualifying employment requirement has not changed. Before consolidating, make sure to check to see if you work for a qualifying employer. To determine if your employer qualifies for PSLF, use the Department of Education’s employer search tool.
Summary of the Department of Education’s One-Time Account Adjustment
- Through a separate initiative, the Department of Education will grant credit toward PSLF for certain time spent in forbearance and deferment.
- Certain periods of forbearance will count. Forbearance periods of 12 consecutive months or greater, or 36 cumulative months or greater, will count towards loan forgiveness automatically.
- Certain periods of deferment will count. Months spent in deferment before 2013 will count towards PSLF automatically. Months in Economic Hardship Deferment on or after January 1, 2013 will also count towards PSLF. No credit will be given for in-school deferments.
- To receive credit for other periods of forbearance (shorter than 12 consecutive months and not more than 36 cumulative months) or deferment (later than 2013), you can submit a complaint to the Department of Education requesting credit.
- If you already have Direct Loans, you do not have to take any action to receive these credits, unless you are seeking time for additional forbearance or deferment that require you to file a complaint.
- If you have other loan types, you must consolidate them into a Direct Consolidation Loan by October 31, 2022 to receive these credits.
- Credit for these periods of forbearance and deferment will be applied to your account beginning in fall 2022. (You may not see the credit applied until after the waiver deadline of October 31, 2022.)
What Steps Do I Need to Take Before October 31, 2022?
- Check and make sure that your current and/or former jobs count as qualifying full-time employment under the PSLF program.
- Identify your federal loan types to see if you need to consolidate. You can verify your loan types by logging into the Federal Student Aid website.
- Consolidate any non-Direct Loans into the Direct Loan Program.
- File a PSLF form for each qualifying employer you have worked for since 2007. You do not need to wait until your loan consolidation is confirmed to file your PSLF form. (If you have previously filed a PSLF form for an employer, you do not need to refile the form.)You will only get credit under these flexible rules for repayment periods for which you have filed a PSLF form for each employer by Oct. 31, 2022. ( Be sure to leave time for your employer to sign the form so that you can submit it before the October 31, 2022, deadline.
- Plan to pay under traditional PSLF rules after October 31, 2022, which for most borrowers will mean enrolling in an income-driven repayment (IDR) plan. (Note: the current pause in federal student loan repayments has been extended through December 2022; each paused month will count toward PSLF for borrowers who maintain qualifying employment.)
If you have received information from your student loan servicer contrary to this alert, we want to hear from you. Contact the Office of the Attorney General by phone at (202) 442-9828, by email at Consumer.Protection@dc.gov, or by filling out our web form.
Have additional questions? More information regarding the temporary waiver of PSLF eligibility requirements is available at StudentAid and the Student Borrowers Protection Center.
Need to talk to someone regarding your student loans? You can reach out to Ricardo Jefferson, the Student Loan Ombudsman at (202) 727-8000 or DCLoanHelp@dc.gov.
The Office of the Attorney General works to educate District residents about their consumer rights, responds to individual consumer complaints, and takes appropriate law enforcement actions where possible. Learn more about your rights and how to protect yourself against scams at oag.dc.gov/ConsumerProtection.