Does Forbearance Count Toward PSLF? Yes, Here’s How to Maximize It

Historically, the Public Service Loan Forgiveness (PSLF) program has been riddled with complicated eligibility requirements that have prevented borrowers from receiving loan cancellation. 

But recent student debt relief efforts gave PSLF borrowers the opportunity to fast-track loan forgiveness by relaxing “qualifying payment” rules. This included allowing some forbearance periods to count toward PSLF and other student loan forgiveness programs.

Does forbearance count toward PSLF?

Student loan borrowers working toward Public Service Loan Forgiveness normally receive tax-free loan forgiveness after making 120 qualifying payments. However, certain periods of deferment and forbearance counted toward PSLF and income-driven repayment (IDR) forgiveness for a short time, thanks to temporary student loan initiatives from the Biden administration.

Under the IDR Account Adjustment, which expired June 30, 2024, you could have qualified for additional loan forgiveness credit if you have:

• 12 consecutive months or more of forbearance.
• 36 cumulative months or more of forbearance.
• Any months spent in an economic hardship deferment or military service deferment after 2013.
• Any months spent in any type of deferment before 2013 (excludes in-school deferment).

The key to receiving credit for forbearance that counts toward PSLF specifically is to confirm you were working for a PSLF-qualifying employer during eligible forbearance periods. To do this, borrowers would have used the PSLF Help Tool to certify your employment for these periods of time.

Otherwise, if you weren’t working at a public or nonprofit employer during eligible forbearance periods, you could still receive forgiveness credit. But it would have strictly been toward IDR forgiveness, which is a 20- or 25-year timeline.

Note the COVID-19 pandemic payment pause doesn’t count toward the forbearance totals listed above — but it does count toward your overall forgiveness payment count.

When should you consolidate a loan with a history of forbearance?

Although we made a big push for the PSLF Waiver, a lot of public service borrowers missed out on that limited-time opportunity. However, many had a second chance at receiving similar benefits under the IDR account adjustment, also called the IDR waiver.

As a PSLF borrower, here’s what you need to be aware of:

1. You needed to have certified your PSLF employment for all eligible periods of time from October 1, 2007, through the end of 2023.
2. Depending on your situation, you may have needed to consolidate your federal student loans to receive PSLF credit.
3. You had until June 30, 2024, to consolidate your loans to receive the maximum benefit under the IDR account adjustment.

Only Direct Loans qualify for the PSLF program. So, if you have any non-Direct Loans, you would have needed to consolidate to receive PSLF credit. This includes Federal Family Education Loans (FFEL), Perkins Loans and Health Education Assistance Loan (HEAL) program loans.

But you should also consider applying for a new Direct Consolidation Loan if you have one student loan that has significantly more payment credit than others.

Consolidation benefits for PSLF borrowers before the one-time account adjustment

If you consolidated your loans before the end of 2023, the U.S. Department of Education used your longest payment history to determine loan forgiveness credits for the new consolidation loan.

For example, let’s say you had undergraduate loans that you’ve been paying on since your grace period ended. But you also took out loans to fund your graduate degree. If you consolidated before the end of the year, your new loan would have automatically received IDR forgiveness credit based on the undergraduate loan with the longest payment history. Additionally, the entire loan would have gotten PSLF credit based on employment certification documents you submited from working full-time in the public or nonprofit sector.

Consolidation after the IDR Account Adjustment ends

If you consolidate your student loans in 2024 and beyond, the Department of Education will use a weighted average payment count to determine your forgiveness credits on the new loan. This isn’t nearly as generous as the IDR waiver was, but it can still put you ahead.

Additionally, you could have gotten all of your loans on the same forgiveness timeline. That way, all of your student loans are wiped away at the same time instead of being spread out over several years. 

Future forbearance option: How buying back forbearance works for PSLF

Any forbearance periods prior to July 2023 were supposed to have been dealt with using the IDR account adjustment. But going forward, new loan regulations will allow you to buy back months spent in forbearance.

This new option allows forbearance to count toward PSLF if you’re willing to pay for it. Basically, you’ll pay what your income-driven repayment plan payment would have been if you weren’t placed in forbearance. In turn, you’ll receive PSLF or IDR forgiveness credit for being “in repayment” status during qualifying months.

Keep in mind your required payment with an IDR plan could be as low as $0, depending on your income and other factors during that forbearance period.

How to appeal a forbearance period not counting toward forgiveness

After the IDR account adjustment was applied to your account, you had the option to file a complaint with the Federal Student Aid (FSA) Ombudsman if you think a forbearance period should have counted toward PSLF or IDR forgiveness.

This could have come into play if you didn't meet the 12-month or 36-month forbearance thresholds and felt you were steered into unnecessary forbearance by your student loan servicer.

The same applies if you believe there’s been a mistake with your payment count for any reason after your account is adjusted. The Department of Education suggests checking with your loan servicer or submitting a complaint directly.

Get help to receive the full benefit of the IDR Account Adjustment

The IDR account adjustment was a huge benefit to both PSLF and IDR forgiveness borrowers. Even though it's expired, we recommend being informed about your projected payment count to ensure you receive the maximum credit toward forgiveness. After all, the Department of Education and its loan servicers are well-known for making mistakes, especially when it comes to accurate paperwork.

Schedule a consultation with our team of student loan debt experts to receive a custom repayment strategy to save you the most money.