On October 6, 2021, the Department of Education announced it would temporarily change the rules for PSLF so that more borrowers could obtain cancellation. The waiver will only last until October 31, 2022. Borrowers will need to take steps prior to October 31, 2022 in order to qualify for the waiver.
Typically, to have your loans canceled under the normal PSLF rules, you must:
- have Direct Loans,
- work full-time in a qualifying public service job,
- be in an income-driven repayment plan,
- make 120 monthly payments (10 years).
Under the PSLF limited waiver, the following now counts:
- time in the wrong repayment plan,
- time making payments on the wrong type of loan (so long as you consolidate into a Direct Loan before the waiver ends), and
- time in forbearance or deferment.
Significantly, the waiver now allows borrowers with FFEL loans, Perkins loans, and some Parent PLUS loans to receive credit for time their loan was in repayment while working in public service. Additionally, borrowers who will have 120 months or more of credit toward PSLF after the waiver is applied do not need to still be working in a public service job to receive cancellation. The waiver is only available through the end of October 2022.
Apply for the Waiver
If you are only applying for PSLF for loans taken out for your education, you need to take the following steps before end of the day October 31, 2022 to receive the waiver credit:
- Apply to consolidate any FFEL or Perkins loans into a Direct Consolidation Loan (if you haven’t already done so) before October 31st. Under the waiver, you will receive credit for the time you were making payments on the old loans while you were working in a public service job. The new consolidation loan does not need to be disbursed by October 31st, you just need to apply for it by the deadline.
- Submit Employer Certification Forms (signed by you and your employer) for all of your public service jobs after you started paying on your loans. If you use the PSLF help tool to create the form, you will be included in the waiver, even if you submit the form after the deadline.
If you have Parent PLUS loans, you may qualify for the PSLF waiver if you have other loans as well. The waiver rules are different for Parent PLUS borrowers and depend on your specific situation. Before taking any steps to apply for the waiver, you first need to make sure you qualify and what steps are right for your situation. You still need to complete any required steps before October 31, 2022 to receive the waiver.
Read the following to find out if you are eligible for the PSLF waiver with Parent PLUS loans and how to apply:
- If you have other loans, such as Direct, FFEL, or Perkins loans, in addition to your Parent PLUS loans, then you may qualify for the PSLF waiver. To get the waiver credit, you need to consolidate your loans into a new Direct Consolidation Loan before October 31, 2022. You will then get credit for time in repayment under the original loans.
- Note: If you won’t have 120 months of payments under PSLF after the waiver is applied, you will need to enroll in an income-driven repayment plan. Consolidation loans that contain Parent PLUS loans are only eligible for the Income Contingent Repayment Plan (ICR). Because ICR is not the most generous repayment plan, it might make sense to apply for multiple consolidation loans to take advantage of more affordable IDR plans–borrowers should speak with a student loan attorney to determine which plan makes sense for them. However, the Parent PLUS loan must be consolidated with at least one loan of a different type to qualify for the waiver. Parent PLUS loans that are consolidated alone are excluded from the waiver.
- If you only have Parent PLUS loans, you will not qualify for relief under the PSLF waiver. However, you can still consolidate your Parent PLUS loans into a new Direct Consolidation Loan and start working toward PSLF now. You just won’t get credit for any repayments made before the consolidation. If you do consolidate your Parent PLUS loans, you will have to enroll in an IDR plan and make 120 qualifying payments to have your loans canceled under PSLF. Currently, the only IDR plan these consolidation loans would be eligible for is the Income Contingent Repayment (ICR) plan.
