Are you a teacher, nurse or other public servant? We made this step-by-step guide on how to navigate the Public Service Loan Forgiveness program — and make a successful claim:
Hello and welcome back to MarketWatch’s Extra Credit column, a weekly look at the news through the lens of debt.
As Secretary of Education Miguel Cardona put it this week in describing experiences he heard from borrowers earlier this year. “Just the hoops they had to jump through…it’s almost like the process was designed to get them to be frustrated,” Cardona said during a roundtable discussion with public servants.
Still, there are a few caveats to the announcement: Parent PLUS loans are not eligible for the waiver and it doesn’t expand the categories of employment that are eligible for the program . In addition, borrowers need to be working full-time for a qualifying employer at the time of their payments in order for those payments to count.
What’s more, the student loan system is currently in flux. Over the past year, four student-loan servicers, including FedLoan Servicing, the organization that has historically managed the PSLF program, announced they won’t be renewing their contracts with the Department. To do this, borrowers should register with the Office of Federal Student Aid by creating an FSA ID. To create an account, click here. If you already have an FSA I.D. make sure your contact information is up to date. To do that, first log into your FSA account and then go to StudentAid.gov/settings.
Loans that start with the word “Direct” are Direct Loans. If all of your loans are Direct Loans — including because you previously consolidated other types of loans into the Direct Loan program — you can skip down to Step 5. If you don’t work for the government or a 501 and aren’t sure if your employer makes you eligible for PSLF and you have FFEL or Perkins Loans you may want to check whether your employer qualifies before you go to step four, which is to consolidate those loans into the Direct Loan program. That’s because consolidation can change certain features of your loan, like the interest rate, which may not be beneficial to you if you’re not working for an employer that’s eligible under PSLF.
Borrowers can consolidate their non-Direct Loans at any time and may want to start the process as soon as possible. In order to have previous payments on FFEL or Perkins loans count under the limited waiver borrowers need to consolidate their non-Direct Loans by Oct. 31, 2022.To consolidate your loans go here.
To certify your employment for the first time or to certify portions of your employment you haven’t verified already, go to the PSLF help tool. You can also fill out the PSLF form by hand and mail it in. For your payments to qualify under the waiver, you need to fill out the PSLF form by Oct. 31, 2022.
The processing time for a PSLF form varies, but the majority of borrowers can expect to know the results of their processing within two weeks of submitting the form, according to the Department. The agency recommends using the PSLF Help Tool for the speediest processing.
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