Written By Travis Hornsby, CFA®, CFP®
As it relates to the Public Service Loan Forgiveness (PSLF) program, the media reports stats without context. I received a huge number of messages about the National Public Radio (NPR) piece entitled, “Why Public Service Loan Forgiveness is So Unforgiving.”
Vice decided to throw caution to the wind and warned borrowers, “You’re Probably Not Getting that Loan Forgiveness You’re Counting On.”
No one seems to understand the PSLF program. In fact, the PSLF success rate for applications will be exponentially increasing over the next few years thanks to the “PSLF Snowball Effect.”
Not only is PSLF working, it will be America's most popular student loan forgiveness program within only a couple years.
Editor's note: Years after I first wrote this post, President Biden issued the PSLF Waiver, which makes many types of loans and repayment plans qualify for PSLF that would normally not. While it expired in October 2022, the IDR Waiver is still in effect and offers many of the same benefits. This will speed up the “PSLF snowball” drastically. We should see tens of billions of loans forgiven by 2023 because of this waiver.
Get Started With Our New IDR Calculator
Why is everyone getting rejected for PSLF – and who qualifies?
As of November 2020, from the most recent data I could find, 3,776 borrowers had PSLF discharges out of 227,382 unique applications.
The initial success rate was about 0.5%, and now it's above 1% only a couple of years later. You might think that's still ridiculous, but it shows the exponential path to a 50% PSLF success rate that will happen over time and lead to more student loan forgiveness on borrowers' loans.
Congress passed the Public Service Loan Forgiveness Program (PSLF) in September 2007 with the College Cost Reduction and Access Act. However, setting up federal loans for forgiveness takes a while when people owe hundreds of billions of dollars.
In fact, around the time of the bill’s passage in 2007, federal Direct Loans only constituted $106.8 billion of the total federal loan portfolio of $516 billion, according to the Federal Student Loan Portfolio database.
Only Direct Loans were eligible for PSLF. That meant only about 20% of the total pool of debt was even possibly eligible approximately 10 years ago.
Here are the loan forgiveness stats as of November 2020 under the PSLF program — actual forgiveness, not just approved for forgiveness, which takes more time. There were 263,118 applications that were denied because they failed to meet the requirements. The number of loans discharged is in millions.
- Borrowers: 227,382
- Borrower discharges: 3,776
- Loans discharged: $290,395,836
How has Income-Based Repayment hurt the PSLF success rate?
How many of those borrowers with Direct Loans were on an income-driven repayment program? Keep in mind that borrowers have only been able to access the Income-Based Repayment (IBR) program since about September 2009.
Before that, the only option to pay based on your income was the Income-Contingent Repayment (ICR) plan. ICR is definitely the least understood, most complicated, dumbest kind of income-driven repayment for student loan borrowers.
It's confusing to sign up for, and the payment is significantly higher than the IBR, Pay As You Earn (PAYE) and Saving on a Valuable Education (SAVE) — formerly known as Revised Pay As You Earn (REPAYE).
Additionally, the Extended and Graduated plans probably have lower payments in many cases than ICR does. If you were a borrower back in 2007 or 2008, then you might have just chosen the lowest cost repayment plan without knowing about PSLF.
Borrowers first gained access to the 10%-of-your-income PAYE plan in 2013. REPAYE became easily accessible in early 2016.
Another clue of how poorly adopted income-driven repayment adoption has been historically is to look at the first available data in 2013 for how many people used it.
In late 2013, $72.3 billion of Direct Loans were on an income-driven repayment plan out of over $1 trillion. That’s barely 7% — and that’s in 2013!
What was the percent of borrowers who had figured out ICR back in 2007 and 2008? Likely minuscule. Here’s the percentage since 2013. The figures shown below are in billions, and the percentages equal the percentage of total federal student loan debt.
Year | Direct Loans on IDR Plan in Billions of Dollars | Total Federal Loan Portfolio in Billions of Dollars | Direct Loans on an IDR Plan (%) |
2013 | $72.3 | $1,006.0 | 7% |
2014 | $121.3 | $1,096.5 | 11% |
2015 | $193.4 | $1,182.1 | 16% |
2016 | $269.0 | $1,262.2 | 21% |
2017 | $336.8 | $1,337.4 | 25% |
2018 | $402.7 | $1,412.0 | 29% |
2Q 2019 | $444.9 | $1,476.6 | 30% |
Notice a trend? Income-driven options aren’t going anywhere, folks. Give it another decade and the majority of Americans will be on an income-driven repayment option. That would sever the tie of the amount of debt you borrow to your payment.
The PSLF employment certification form is just starting to help
Back in 2012, the government decided it was a very bad idea to have the people depending on this program try to hunt down their old employers from 10 years ago to certify their credit. That’s one reason why the Public Service Loan Forgiveness Employment Certification Form, or ECF, was created.
This allows you to submit paperwork to certify your status in the program as often as you like, usually yearly.
How did borrowers certify their PSLF status before 2012? The answer is they didn’t. Any borrower applying now either tried to certify their status when the form came out and is battling FedLoan for an accurate payment count, or they never submitted the certification in the first place.
Do you know many people who work ahead and document everything they do? The average person certainly waits until the last minute and doesn’t cross their T’s. And that’s the average PSLF applicant, too. The structure of the federal student loan system put them in a place where they wouldn't qualify.
If you're one of the lucky few, you likely had a best friend at the U.S. Department of Education who was telling you about all of this stuff back in 2007 and 2008. (I keep mentioning those years because only borrowers with Direct Loans back then could have the necessary 10 years of credit to receive PSLF.)
The borrowers who applied with a paperwork mistake likely were hurt by not having access to the ECF sooner. They left off a single signature from a qualifying employer, maybe failed to check something on the application or didn’t document their employment history.
Direct Loans have only been around for everybody since 2010
Did you know that the Federal Family Education Loan (FFEL) Program was the primary system of student loan borrowing prior to 2010? This program has no PSLF eligibility, and the only way to qualify for PSLF if you have FFEL Loans is to consolidate them.
The typical American worries about doing a good job at their place of work, taking care of their family, achieving happiness in their relationships and just living their lives. They aren't nerding out on repayment rules, reading promissory notes and running monthly payments numbers in spreadsheets (that’s why people hire us).
Before 2010, you had to rely on being at the right institution that just happened to offer Direct Loans. Certainly for grad school, FFEL loans were far more commonly offered.
Physicians and PSLF success rate
I’ve been asked if any physicians have received PSLF yet. Structurally, it will be impossible for large numbers of physicians to get PSLF until mid-2020 at the earliest.
If you graduated from medical school in 2008 to begin your 10 years of credit and full-time employment, you would have started borrowing in 2004 at a minimum.
There’s almost zero chance that you'd have been able to borrow only Direct Loans. There’s also only a small possibility that you could consolidate back in 2008 to change your loans into qualifying ones.
The earliest class that would have been able to get PSLF eligible loans finished med school in 2010. That's when they could have conceivably consolidated their ineligible FFEL debt into a Direct Consolidation Loan and signed up for IBR.
Realistically, though, the consolidation process was a wreck back then. It was still a wreck as of 2011, too. Every graduating med school class until 2014 would have had significant FFEL loans. This is because the Direct program became the only option in 2010, and med school lasts four years.
Without having hired a student loan consultant, the first physicians getting PSLF en masse will be in 2024.
The only stories I’ve seen of people who qualified already are folks who had shorter degree programs, got lucky by attending a school that pushed taking out Direct Loans or have debt primarily from undergrad. That’s because of the way the PSLF program got implemented. That will also change over time.
The pool of eligible PSLF borrowers in the late 2010s is tiny
Let’s look at the potential pool of people who could get their loans forgiven starting in 2008, when borrowers could be eligible for PSLF.
In June 2008, there was about $122 billion of Direct Federal Loans.
In 2013, 2% of federal student loan debt was on the ICR program. So let’s assume that 2% of the $122 billion could have been in a qualifying repayment program. So $2.44 billion would now be eligible.
That means we need to take 25% of the $2.44 billion figure now to see how many borrowers could have had qualifying loans in an eligible job an income-driven option (the only one back then was ICR).
That figure is now $610 million.
How many people were continuously employed for those 10 years, used no forbearance or deferment, took no time off in between jobs and shrugged off all the misinformation coming from their loan servicers? Would you guess one-third of that amount? I'd say that’s far too high, but let’s go with it. Now we have a potential eligible pool of $203 million.
How many borrowers in that cohort:
- Realize they qualify?
- Made qualified payments?
- Can track down signatures they need proving their 10 years of qualified employment?
- Submitted their paperwork already?
- Will be applying later in the year?
It’s hard to know for sure, but maybe $50 million worth? The government has already approved $30 million, and FedLoan has approved hundreds more, pending the forgiveness disbursement.
Out of the potentially eligible pool of loans, it seems that almost 25% or more are being forgiven as we speak. That's not a 1% approval rate.
The pool of eligible PSLF borrowers in the late 2020s will be huge
According to the Consumer Financial Protection Bureau, about 25% of the American workforce could be eligible for PSLF one day.
With over 1,000,000 unique borrowers certified for the PSLF program, the question is not if but when the government will start handing out billions of dollars for this loan forgiveness program. I wouldn't be shocked if the cost of this one program exceeds the annual budget of NASA by 2029.
Milestones that will make the PSLF success rate rapidly grow
There are several big moments that will happen soon, causing the PSLF rejection rate to drastically improve at the years below plus 10 (because you need 10 years of qualifying service to get your remaining loan balance forgiven).
1. IBR becomes widely accessible: Late 2009
We know this happened around the end of 2009. That means the crop of PSLF borrowers in 2019 would have been able to use IBR instead of the drastically more confusing ICR. This will significantly broaden the pool of eligible borrowers.
2. Direct Loans become primary loan type: 2010
Starting in 2010, the FFEL Program ceased to exist, and the Direct Loan program became by far the typical way students borrowed. That’s going to be huge when PSLF applicants would have had the right kind of loans to qualify without having to do anything special.
3. Employment Certification Form becomes widely available: 2012
We know the ECF is incredibly important for folks tracking progress toward PSLF. In fact, it’s designed to prevent fiascos like these from happening when you apply. Borrowers starting in 2022 will have had the ECF around for 10 years. This will significantly reduce the error rate for the application process because there won’t be any mysteries when you apply.
4. PAYE Became Available: 2013
At University of Iowa campaign rally, former President Barack Obama used executive powers to create the PAYE program. Limited funds meant he had to restrict it to folks who took out their first loan after Oct. 1, 2007 and who took out at least one new loan after Oct. 1, 2011. Basically, this was done so the Class of 2012 undergrads would qualify. This program improved the incentive for a borrower to sign up for an income-driven option.
5. REPAYE Became Available: Early 2016
A lot of people couldn’t access the PAYE plan when it came out. But the REPAYE program is open to everyone with Direct Loans. In 2016, it became even easier to get access to the PSLF program, as REPAYE became the default recommendation for what to do with your loans for every clueless loan servicer phone representative everywhere.
6. Media makes borrowers aware of the program's poor success rate: 2018
All publicity is good publicity, right? A lot of borrowers have never heard of PSLF. However, thanks to the large amount of coverage in the media, many more people know about this program today than even in the mid-2010s.
7. Borrowers begin to realize the PSLF program is legit: 2020-2022
If you weren't counting on getting PSLF because of negative media attention, you might change your mind as 2020 ushers in the first relatively large cohort of borrowers who will receive tax free forgiveness. Once more borrowers see that it works, more of them will commit to the 10-year process of qualifying for the program.
8. PSLF Waiver and IDR Waiver are introduced: 2021-2023
The PSLF Waiver temporarily suspended the standard PSLF rules for qualifying repayment plans, on-time payments and eligible loan types. This opportunity was available to borrowers from October 6, 2021 to October 31, 2022 as a result of the COVID-19 pandemic national emergency. As of July 2023, approximately 662,000 borrowers were eligible for forgiveness under the PSLF Waiver.
But borrowers who missed out on the PSLF Waiver are still eligible for the IDR Waiver through the end of 2023, which provides similar benefits for PSLF borrowers.
What’s the current status of the PSLF Program?
Public Service Loan Forgiveness Employment Certification Forms (ECFs)
Year | Direct Loans on IDR Plan in Billions of Dollars | Total Federal Loan Portfolio in Billions of Dollars | Direct Loans on an IDR Plan (%) |
2013 | $72.3 | $1,006.0 | 7% |
2014 | $121.3 | $1,096.5 | 11% |
2015 | $193.4 | $1,182.1 | 16% |
2016 | $269.0 | $1,262.2 | 21% |
2017 | $336.8 | $1,337.4 | 25% |
2018 | $402.7 | $1,412.0 | 29% |
2Q 2019 | $444.9 | $1,476.6 | 30% |
Source: FedLoan Servicing, Federal Government, SLP Calculations
By 2024, a med student who started school in 2010 would have taken out exclusively Direct Loans until they graduated in 2014. She would have been steered into an income-driven repayment (IDR plan) as the default suggestion. And she would have learned in residency to apply for PSLF with the ECF and submit it every year.
In 2018, maybe she contacted Student Loan Planner® for a consult where we told her to max her pretax retirement accounts, think through her tax filing status with her spouse and avoid the misinformation surrounding the PSLF program.
She continued to stay the course with student loan payments, save in her tax bomb account and not freak out. In 2024, she applies with a clear paper trail proving her credit, and she receives the forgiveness.
Along the way, there will be attempts to repeal the program by government organizations. One might be successful, but it will likely grandfather in current borrowers. There are now over 1 million people depending on PSLF. If you were a congressperson, would you want to piss off 1 million highly educated people who all vote?
Please media, tell the full story about the PSLF success rate
More accurate headlines would say something like:
- Breaking News: Design of PSLF Program Sucked in 2008. Lousy Congress and President to Blame
- PSLF Program Sees 99% Rejection Rate. The Program Was So Confusing 10 Years Ago, We’re Surprised it’s Not 100%!
- Over 800 Borrowers Got Approved. 1 Million Set to Be Approved in 2029.
- Projected Cost of PSLF Program in 2019 Set to Increase by 1,000% Per Year
- Media Causes Thousands to Abandon Loan Forgiveness Program They Likely Would’ve Qualified For
Financial media has long been a huge cause of behavioral mistakes in investing. Just ask literally any Certified Financial Planner you know. And now this misinformation is spreading to managing student loans. Also, the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) is not getting enough press, either.
I think reporters are trying their best to highlight the poor design and implementation of PSLF instead of helping the PSLF success rate. Please just be careful and try to tell the full story. Millions of people are making decisions now based on what you say.
If you want expert help evaluating all your options for your student loans (if they’re between $20,000 and $1 million), reach out for help. You can also find the PSLF form here and the Federal Student Aid PSLF help tool as well to stay on the right track.
Not sure what to do with your student loans?
Take our 11 question quiz to get a personalized recommendation for 2024 on whether you should pursue PSLF, Biden’s New IDR plan, or refinancing (including the one lender we think could give you the best rate).
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[…] out properly. If you want to dive deeper into the numbers and why the acceptance rate was so low, read this post that provides a detailed […]
[…] out properly. If you want to dive deeper into the numbers and why the acceptance rate was so low, read this post that provides a detailed […]
Another milestone is the Special Direct Consolidation Loan opportunity in early 2012. This was a push to get people with a mix of FFEL and Direct loans to consolidate, with interest incentives. Qualifying borrowers were notified directly.
I consolidated for the interest rate reduction and the ease of having one servicer. Now that I’m pursuing PSLF, I’m very glad that I did.
1. The Federal Government accidentally created a program that fooled 99% of the people who applied for it.
2. The Federal Government purposefully created a program that fooled 99% of the people who applied for it.
3. The Federal Government vastly underestimated the incompetence of people who applied for the program.
Which do we believe? If you believe number 2, why would we have any faith in a snowball effect? Is there a presence of malice in the way the program has been administered, or are we all (99%, anyway) all idiots?
There’s an old saying: “I know it’s in Texas, probably in Tennessee that says, ‘Fool me once, shame on … shame on you. Fool me… You can’t get fooled again!'”
I think 2 and 3 give the government too much credit. This loan program was never thought out very well.
It’s very clear this program was created to intentionally fool people. The % of loan forgiveness will not change over time. They never intended to forgive the loans. This law was signed by a Republican. That is all we need to know
The percent of loans being forgiven has already doubled this year, although from a low level. If I’m wrong in 2024 I’ll invite readers to pie me in the face.
No disrespect but the problem is that an article like this gives people false hope. I have been through this with my fiance and we received conflicting and inaccurate information from FedLoan that resulted in her going from 60 payments made to 10 – from almost half-way to forgiveness to virtually at the beginning again. The IBR repayment plan does not even cover the interest so the loan amount continues to increase. We were told that this could not be changed and if we paid ahead (principal) that we would lose eligibility. It is clear that this program was never intended to help people. If anything, it is intended to drive them further into debt. It does not make sense. Again FedLoan insists that this cannot be changed. Suggesting that people make decisions based on the possibility that these loans will be forgiven is equivalent to suggesting buying lottery tickets. You would probably have better odds of success in the lottery.
Lottery tickets are 1 in 1 million and PSLF right now is about 1 or 2 in 100. Also the people that are applying are a biased sample (ie people who didn’t know they dont qualify are more likely to apply than people that know they don’t qualify, which makes the denial rate look worse than it is). So I feel for what you’re going through. FedLoan should not be allowed to manage the program, but we stand by the content here.
I have been fighting for PSLF since the program became “live” in 2017, and they have found every conceivable excuse to deny my applications. I’ve worked the same (qualifying) job since 2006, so there was no confusion over my work history. I’ve made every single monthly payment as billed for the last 20+ years, so that shouldn’t have been an issue. Well, lemme tell ya. First they claimed I hadn’t made enough qualifying payments, by dozens and dozens. Then they denied me because they claimed I was on the wrong repayment plan all along. Then they said, well, maybe that plan was okay after all, but I hadn’t paid enough back. What?? But I paid exactly what the bills said every month. That didn’t matter, they said, because they claimed that while I did make the billed payments each month, I hadn’t actually been billed enough. So they recalculated my made payments based on what they now thought I should have been paying all along, and decided it only constituted 60-something qualifying payments rather than 120. (The rule on the form actually says that you have to pay what is billed, not some fantasy magical number that only they knew about all this time but never told me. Plus, had I actually paid that amount each month, I would have paid off my loans years ago and have no balance left to forgive.) They left it at that for months, and I basically gave up. But I complained! Finally they saw my complaints on social media and one of their reps contacted me out of the blue, offering to follow up on it. She got back with me a couple of months later (now more than 2 years into this, and with me making payments again) and said they have now “found” 61 more qualifying payments (I have no idea where these months had been hiding), for a total of 121. So they suddenly agree I have met all terms, and I am awaiting final approval now. What this demonstrates is that there are more reasons than the ones you listed in the article for how and why they would deny someone. It wasn’t a case of me having things wrong or it being too complicated. They simply looked for every possible loophole and excuse to deny me. They gave me a completely different story every single time I called in asking why I was being denied. And finally they approved my application not because they admitted they should give me full credit for each of my monthly payments, as per their own rules, but because they somehow “found” 60 more months of payments I had made that they somehow missed before. (?!?!)
I still feel this whole thing has been a scam, but I’m not arguing now. I suspect they approved mine mainly to help their numbers and because my remaining balance is so pitifully low at this point, it’s not costing them much to forgive it. But I’ll take what I can get and declare a (small) victory.
Well that’s good that it’s gone!
Would you be able to share the final steps/process of the forgiveness? Are your loans officially ‘forgiven?’
You just apply via this PDF thats it.
https://studentaid.ed.gov/sa/sites/default/files/public-service-application-for-forgiveness.pdf
If CP was referring to my comment, then that’s *not* necessarily “it.”
For nearly 2 years they rejected my application forms over and over. They used every excuse in the book, which were mostly the same as the reasons cited in this main article as “legitimate reasons” why applicants are rejected.
So when they give statistics that say people are applying who are not eligible, that’s not necessarily the case. People who are eligible are being falsely told they’re not, and then journalists are being told, “Oh, most of the people who apply aren’t actually eligible.”
Again, for two years and many multiple applications, all those reasons were given to me as to why I was being rejected. And then, two years into the process, they suddenly decide I’m perfectly eligible. Nothing had changed. And it never involved the temporary extension program they added. Only thing that changed was that they finally acknowledged what was on my paperwork all along.
For me, the final step was that a review person contacted me (out of the blue, after I’d mostly given up) after seeing my tweets and Facebook posts about my negative experience. She investigated my case on my behalf, saw that I was right and that they had been wrong all those months, and sent in a recommendation to the Department of Education to overturn the ruling on my case. In the last month, the Dept of Education has agreed with her findings. As of two weeks ago, I have the paperwork that says my balance is now zero.
It also says on the paperwork that a forgiven student loan balance does not —repeat not —count as taxable income on your taxes.
I will always believe they finally relented and accepted my application mainly because they have millions and millions of dollars sitting there unused, with an acceptance rate of 1%, and my balance was just over $4000. It gives them a statistical win, basically using change they found in the cushions of the sofa at the Department of Education.
Am I cynical about this after over 2 years of phone calls and paperwork and battles? Little bit.
Thank you, for sharing your story and experience. I believe the logic behind the evidence this article provides; that more and more people will be eligible. 2017, meant that you must have graduated in 2007, at which point the Direct Loans were not in existence yet.
I really appreciate this article. So often I see only negativity surrounding the PSLF online or even in discussion with peers who have only heard how bad it is, not that they have applied themselves. It is really difficult to stay positive when everyone seems to think I won’t be approved. Meanwhile, I am 6 years into the 10 year plan, working hard to keep up with the ECF’s and ensuring that FedLoan has all of my qualifying payments up to date, I have been crossing T’s and Dotting I’s long before I even applied for the first ECF. When my employment was approved and I made sure I was on the correct payment plan all along, I became hopeful. I yes, I have had to fight with FedLoan for a year and a half to correctly reflect my qualifying payments since the transfer of my files between Navient and Fedloan were done so lazily/slopping on their ends. But I called more than once asking what I could do to help, figured it out and compiled what they needed. Now everything is on track for me to apply in spring 2024. I’m keeping my nose to the grindstone and crossing my fingers. Thanks again! Your breakdown renewed my hope.
That’s great to hear Izzie. Just keep up your hope.
I just want to add, that I had the same experience as the previous poster, when I had to keep fighting with the Fedloan over the past year to accept my certification to update my qualifying payments since, they had it wrong in their system. I been working for the same qualified employer for over 10 years and they keep using every excuse in the book to deny me the certification. I have spoken to so many representatives that, I had to keep track of my their ID numbers and names, and keep notes about what they were telling me, to fight the next rejection. I’m at my wits end, because, the public loan forgiveness program is a stressful process and it does seem like a scam, when you constantly have to fight to get them to admit they made a mistake and correct it. I have went over my certifications with representatives and confirmed all my information was correct and still got a rejection letter. I have probably submitted the stupid certification form over 10 times this past year since, it can take a month to get the rejection letter. I even requested for a review of application and they stated they would do so, but I have received no resolution to my problem. It’s just an endless loop of calls to the Fedloan line and submitting certification forms, hoping that they finally run out of excuses. I’m hoping that they would just accept my certification and I keep on the track process to getting my loans forgiven and I’m wondering if it could be amount of the loans, since I had loans that pretty much doubled with interest and the public loan forgiveness program gave me false hope, that I can the get the rest of the balance forgiven, but it just been a nightmare.
Hi there,
I stumbled upon a very helpful thread discussing PSFL’s last night and was wondering if you could help clarify a few things.
Can you please help me out with the below details?
– I have a total of $161k in student loans (specifically 3 grad PLUS and 3 unsub Stafford)
– each with a different interest rate
– I’m in a REPAYE (est. lowest payment $400-500/mo)
I want to clarify (among other requirements to get PSFL) that after 120 consistent payments I will qualify for PSFL and that my 120 payments DO NOT have to be at least the payment of a Standard Repayment plan (est. $1600/mp for 120 payments)?
I hope this makes sense, I’ve been entangling myself in PSFL research for the past 5 days and have so many questions that my lender hasn’t really clarified for me. I am graduating from grad nursing school this coming December. And, I am also even considering withdrawing $ from my Roth IRA, but want to understand this PSFL first. If I only have to make the lowest payment/mo for 120 payments then Why in the world doesn’t everyone do a IDR plan and see if they qualify for PSFL ?!?
Thanks so much for your time and I hope to hear from you very soon!
With $161 in student debt, forgiveness might make sense. Especially if you qualify for PSLF. You need 120 qualifying payments, and the payments should be based on your income (not the Standard 10-year plan). You might find this article helpful: 40 Tips for Getting PSLF and I also recommend reaching out to book a consult in December/January when you graduate to get a full plan in place.
I have a question. My wife said she is doing this program and has already been accepted but she still has five years to go. So is this something you apply for before you start the program or is it that you meet all the requirements and then apply? It seems like its the latter but I am just looking for clarity. I also want to prepare for worst case scenario because we will have a really big loan to deal with if the government denies her loan forgiveness! Thank you!
Both. You submit paperwork to start PSLF, make sure you’re on an income-driven repayment plan, and your loan transfers to FedLoan (they handle all of the PSLF accounts). Ideally, she would submit paperwork each year to her servicer to make sure she’s on track and that all of the payments she made are counted. (Otherwise, you could be in for a surprise when you reach 10 years.) Once the servicer has a record of 120 qualifying payments, she’ll apply for forgiveness and her loan and payments will be reviewed for compliance at that time. PSLF isn’t going anywhere, despite what the media might have you believe.
Just now seeing the response to my comment from Jan 6 of last year.
>>”2017, meant that you must have graduated in 2007, at which point the Direct Loans were not in existence yet.”<<
My last year of college was 1998. I paid monthly payments every month from 1998 through 2019. I applied for this program in 2017 because that was the first year it was available.
Saying I was not in the right repayment plan in my earlier years was one of the many excuses they used to deny my application–as if I could have known in 1998 which plan I would need to be in, for my payments back then to count in a program that wouldn't be made law until 2007! They actually originally denied over half of my full monthly payments over 21 years as being in the wrong plan.