6 Things to Know About Public Service Loan Forgiveness During the COVID-19 Emergency
On Jan. 20, 2021, the 0% student loan interest rate and suspension of payments on federal student loans owned by the U.S. Department of Education (ED) were extended through at least Sept. 30, 2021. These relief measures, which began March 13, 2020, are intended to provide some financial flexibility during the pandemic to borrowers with loans owned by ED.
Check StudentAid.gov/coronavirus for the latest updates.
Read on to find a brief roundup of what you need to know about how the payment suspension affects Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF).
Suspended Monthly Payments
- have Direct Loans that are not in default, and
- work full-time for a qualifying employer during the payment suspension,
you can earn credit toward PSLF and TEPSLF as if you continued to make regular monthly payments. You can think of them as $0 payments. The only thing you need to do is submit the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF form) to receive qualifying payment credit.
If you made a payment between March 13, 2020, and the end of the payment suspension period and would like a refund, you can call your servicer to request that the funds be returned. Even if you get a refund, that month still counts toward PSLF, as long as all other qualifications are met.
Tips on Applying for PSLF and TEPSLF
If you reach 120 qualifying payments during the payment suspension period, you can still apply for and receive forgiveness at this time. However, you must be working for a qualifying employer at the time you submit the PSLF application and at the time the remaining balance on your loan is forgiven. If you are eligible for forgiveness, the amount forgiven will be the principal and interest that was due after you made your 120th qualifying payment. Learn about eligibility requirements for PSLF and TEPSLF.
Reduced Work Hours Could Impact Your Eligibility
You must continue to work full-time (either 30 hours or what your employer considers to be full-time, whichever is greater) for a qualifying employer to have the suspended payments count toward PSLF. You can meet the full-time requirement by being employed part-time for multiple employers, but they must all be qualifying employers.
If you no longer work full-time for a qualifying employer or lost your employment (or were laid off or furloughed), your suspended payments will not count toward PSLF. You don’t lose your eligibility for PSLF entirely. If you later meet the qualifying employer and full-time status requirements, payments you make at that point will count toward PSLF and can be added to the count of qualifying payments you had when you originally went below 30 hours per week or lost your employment with a qualifying employer.
Additional Payments Will Reduce Your Amount Forgiven
In most cases, it’s a good financial strategy to make additional payments, if you can, during the 0% interest period. If you are seeking PSLF, however, additional payments may not be in your best interest.
If you make payments during the period of suspended payments, they won’t make you eligible for PSLF sooner. The suspended $0 payments already qualify toward your required 120 PSLF payments, so not making additional payments maximizes the amount to be forgiven.
Receiving Credit During the Payment Suspension
As a reminder, the best way to benefit from and to confirm you are meeting PSLF requirements is to submit your PSLF form annually. Use the PSLF Help Tool to complete your PSLF form. Print it, sign it, have your employer sign it, and submit it to FedLoan Servicing. Keep the signature requirements in mind before submitting your form.
For info about how to use the PSLF Help Tool, read our latest article.
Note: When you visit the FedLoan Servicing website, the timeline for reaching the number of qualifying payments for PSLF may appear to have been extended. This is only temporary. Your estimated eligibility date for forgiveness will be corrected.
Mark Your Calendar for Your IDR Plan Recertification Deadline
It’s important to recertify on time so that you remain on your IDR plan. If you aren’t on an IDR plan, payments you make after the payment suspension period ends won’t count toward PSLF.
You will not have to recertify your income before the end of the COVID-19 emergency relief period, regardless of whether your recertification date would have happened prior to the end of the relief period. As part of the payment suspension, your recertification date has been pushed out from your original recertification date. You will be notified of your new recertification date before it is time to recertify.
Wrong contact info means you’ll be missing important updates about your federal student loans. Log in now to confirm your info is correct. Be on the lookout for this email or letter to ensure you don’t miss your IDR recertification deadline.
Consider what your financial circumstances will be when repayment resumes. You might want to recertify early. If you recertify, your new payment amount will begin after the payment suspension ends. If you would like to recertify during the payment suspension, contact your loan servicer to request to do so.
Remember to Avoid PSLF Scams!
There is no fee for the suspension of payments and other federal student loan benefits—not from the federal government and not from your loan servicer. If someone asks for money to suspend payments on your loans or help you apply for PSLF (for example), it’s a scam. Learn more about avoiding student aid scams.
This article was written by Miranda H., a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid. As a public servant with federal student loans, she is passionate about increasing awareness around the PSLF program to improve the overall experience for people like her.