Key Takeaways:
- Monthly federal student loan payments are slated to resume after December 31, 2022.
- The months of non–payment due to the COVID forbearance period count toward PSLF (as if you made qualifying payments).
- MOHELA replaced FedLoan as the servicer for PSLF borrowers.
- Borrowers have more opportunities for eligibility via the Temporary Expanded Public Service Loan Forgiveness (TEPSLF), IDR adjustment and permanent changes on the way.
- President Joe Biden’s debt relief program increased from $10,000 to $20,000, but the initiative is currently in limbo.
- Employment details under PSLF have changed.
The Public Service Loan Forgiveness Program (PSLF) launched in 2007 to entice public service workers and help those currently working in the field with their federal student loan debt. As part of the PSLF program, eligible employees could qualify for student debt forgiveness after making 120 monthly payments.
The COVID-19 payment relief measure has federal loan payments on pause through December 31, 2022, but payments will resume in 2023. Alongside this transition, the Biden administration is ushering in new PSLF changes aimed at righting PSLF’s previous wrongs.
However, keeping up with these changes can be difficult. Below we break down the top PSLF changes you should be aware of.
1. Monthly payments start on January 1, 2023 2. The payment pause period is credited toward PSLF 3. MOHELA is the new loan servicer for PSLF borrowers 4. More programs for increased eligibility 5. Debt relief 6. PSLF changes related to employment 7. The bottom line
Monthly payments start on January 1, 2023
Federal student loan borrowers haven’t been required to make any student loan payments since March 13, 2020, because of the COVID pandemic forbearance.
The White House announced the “final” extension which is active through December 31, 2022. Borrowers should start preparing now for payments to start again January 1, 2023. Borrowers who are working toward PSLF should also confirm that they’re on an income-driven repayment plan (IDR).
Download the Best Student Loan Calculator
Under traditional PSLF rules, borrowers must make 120 payments to meet eligibility requirements for the program. Student loan borrowers who are working at a qualifying nonprofit or government entity will receive payment count credit toward PSLF.
Borrowers now have over two years’ worth of payments credited toward forgiveness without paying a dime. To ensure this time period is credited, submit your PSLF certification form certifying that you were employed with a qualifying employer during this period.
Related: PSLF Qualifying Payments: Ensure You Get Credit During Administrative Forbearance
MOHELA is the new loan servicer for PSLF borrowers
If you’ve been making payments toward PSLF and submitting the appropriate paperwork for a while, your loan servicer was likely FedLoan Servicing. But among the list of PSLF changes in 2022, servicers for the program have changed with MOHELA taking over all PSLF loans and assisting borrowers.
This occurred during July 2022 to September 2022. Although borrowers didn’t have to do anything right away, MOHELA sent notices to those who were affected by the change. If you’re just starting with PSLF, contact MOHELA for help managing and repaying your loans.
More programs for increased eligibility
The PSLF program was meant to help public servants, but its execution has been anything but smooth. Given the PSLF rejection rate and confusion around employment and qualifying payments, it’s been a messy process leaving borrowers frustrated.
To smooth these wrinkles, several major PSLF changes have occurred with new programs increasing eligibility for PSLF.
Temporary Expanded Public Service Loan Forgiveness (TEPSLF)
This program was launched in 2018 and allowed some borrowers additional eligibility if they made payments under a repayment plan that didn’t technically qualify for the PSLF program.
As per the requirements, payments must be made under an income-driven repayment plan. To meet qualifications, borrowers must have already served 10 years in an eligible workplace and previously made payments on a Graduated Repayment Plan or Extended Repayment Plan.
Additionally, if you consolidated, the Consolidation Standard Repayment Plan and Consolidation Graduated Repayment Plan also qualify. What you paid in the year before you apply must be the same as what your payment might be under an IDR plan.
Only Direct Loan borrowers in good standing (not in default) are eligible. Unfortunately, Parent PLUS loan borrowers are ineligible as well as Federal Perkins loan borrowers and Federal Family Education loan (FFEL) borrowers.
Limited PSLF waiver
Two waivers were created to help borrowers: the limited PSFL waiver and the IDR waiver.
The limited PSLF waiver brought expanded eligibility to borrowers — for a limited period of time, as the name suggests. It was available from October 6, 2021, through October 31, 2022.
Under the limited PSLF waiver, borrowers received credit for repayment periods that were otherwise ineligible. For example, payments made under non-IDR plans, payments toward FFEL and Perkins Loans, and other scenarios. If you missed the PSLF waiver, there are some major PSLF changes coming in 2023 that might help.
PSLF changes starting July 1, 2023
The U.S. Department of Education announced on October 25th, 2022, more PSLF changes coming July 1, 2023, that directly help borrowers who didn’t submit the PSLF waiver. This includes:
- Counting late, partial and lump sum payments toward PSLF.
- Including cancer deferment, military service deferment, time in the Peace Corps and more toward PSLF repayment.
- Consolidating loans will now have a weighted average instead of losing out on all credit toward PSLF.
This is big news that helps more borrowers qualify for PSLF.
IDR adjustment
The IDR adjustment — sometimes called the IDR waiver — is a one-time deal for those pursuing forgiveness through IDR. It revises previous payments that might not have been counted. These revisions will help borrowers who have accrued 240 or 300 monthly payments. This count puts borrowers at the 20- to 25-year mark that’s needed for IDR forgiveness, even if they weren’t on an IDR program when those payments were made.
Plus, borrowers who have eligible employment and 120 payments might also get PSLF forgiveness. This is slated to happen in November 2022.
As part of this IDR adjustment, other borrowers might have added payments credited to their accounts starting in July 2023.
This adjustment includes previous payments that might not have been on the right plan and will include a year or more of forbearance and some months of deferment before the year 2013.
It also counts previous periods of repayment before consolidation. A major benefit is that borrowers who have paid more than 20 to 25 years’ worth of monthly payments will qualify for a refund of the excess.
This adjustment may help PSLF applicants with previous bouts of deferment, and there won’t be an application needed like with the PSLF waiver. FFEL borrowers might also qualify for credit toward PSLF if they consolidate before May 1, 2023.
Debt relief
Loan cancellation is also on the table for $10,000 (regular federal loan borrowers) to $20,000 (federal Pell Grant recipients) for federal loan borrowers who meet specific income requirements.
Single student loan borrowers with incomes of less than $125,000 and married loan borrowers who file jointly with incomes of $250,000 might be eligible. Unfortunately, this relief is in limbo right now due to a standing court order, but hopefully, qualified borrowers will obtain debt relief ASAP.
If you apply for PSLF on top of the debt relief, the Department of Education will make adjustments. You may also get a refund if eligible.
PSLF changes related to employment
As part of the PSLF changes, “full-time” employment is now standardized and refers to 30 hours per week. Additionally, adjunct professors get a minimum credit of 3.35 hours per credit hour of teaching.
Lastly, some contracted physicians who work at nonprofit hospitals because state law doesn’t allow the nonprofits to directly employ them might get their employment counted as a PSLF-qualified employer. These major shifts can help more people qualify for PSLF.
Over the past few years, numerous PSLF changes have impacted borrowers or have flown under the radar. Using this guide, along with the PSLF Help Tool, you can see where you stand with PSLF.
Need help figuring things out? Get support through a Student Loan Planner consultation.
Get a Student Loan Plan Refinance student loans, get a bonus in 2022 1 Disclosures $1,050 BONUS1 For 100k+. $300 bonus for 50k to 99k.1 VISIT LAUREL ROAD Variable 2.50-6.80%1 Fixed 4.49-6.90%1 
2 Disclosures $1,000 BONUS2 For 100k+. $300 bonus for 50k to 99k.2 VISIT SPLASH Variable 2.50-8.90%2 Fixed 3.99-8.49%2 
3 Disclosures $1,000 BONUS3 For $100k or more. $200 for $50k to $99,9993 VISIT SOFI Variable 4.49-8.99%3 Fixed 4.49-8.99%3 
4 Disclosures $1,000 BONUS4 For 100k or more. $200 for 50k to $99,9994 VISIT EARNEST Variable 3.58-12.28%4 Fixed 3.99-12.78%4 
6 Disclosures $1,275 BONUS6 For 150k+. Tiered 300 to 575 bonus for 50k to 149k.6 VISIT ELFI Variable 2.48-7.24%6 Fixed 4.29-7.29%6 
7 Disclosures $1,250 BONUS7 For $100k or more. $100 to $350 for $5k to $99,9997 VISIT LENDKEY Variable 1.90-5.25%7 Fixed 2.49-7.75%7 
8 Disclosures $1,250 BONUS8 $350 for 50k to 100k8 VISIT CREDIBLE Variable 2.48-9.92%8 Fixed 2.40-10.11%8 Not sure what to do with your student loans?
Take our 11 question quiz to get a personalized recommendation of whether you should pursue PSLF, IDR forgiveness, or refinancing (including the one lender we think could give you the best rate).
Take Our QuizOriginal Article