Student loan repayments make up a significant portion of household expenses for many Americans, especially in the beginning portion of their careers. These payments can delay or make it hard to save for important goals like retirement accounts and first home purchases.

With that in mind, it is important to verify that you are using the right strategy to repay loans and taking advantage of all the programs available. The PSLF program can benefit many borrowers such as doctors, nurses, and members of the military. It is targeted to help those employed by nonprofits and US Federal, state and local governments.

Changes to the Public Student Loan Forgiveness Program

Last October, the US Department of Education made changes to this program designed to combat frustrations and make good on promises made by the Bush administration in 2007.

First and foremost, it’s important to note that the program has long been a frustrating experience for borrowers across the country.

The program is notably tough to navigate and there is little support, so as a result, many qualified borrowers end up not receiving the loan forgiveness they’re entitled to due to mismanaged enrollment.

One of the primary changes that the US Department of Education is implementing is streamlining the loan forgiveness process for borrowers.

Coordination between loan servicers and the US Department of Education will provide clarity for borrowers on how to apply for forgiveness (and have their application meet all requirements).

The US Department of Education has also put a one-time waiver into effect until October 31, 2022. This waiver is intended to authorize all prior payments from borrowers, regardless of the payment plan they’re on, to apply toward loan forgiveness. If you think you may qualify for the Public Student Loan Forgiveness Program, fill out the U.S. Federal Student Loan form here: hhttps://studentaid.gov/manage-loans/forgiveness-cancellation/public-service/public-service-loan-forgiveness-application

One of the primary complaints from borrowers is that they make payments toward their loans for a number of years, and when they go to apply for forgiveness, they realize they’ve been on a payment plan or loan type that doesn’t qualify.

This government waiver seeks to amend that common pain point, and ensure that borrowers can have their loans forgiven if they check all of the appropriate boxes.

Do you qualify for the Public Student Loan Forgiveness Program?

To qualify for PSLF, you must

  1. Be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service),
  2. Work full-time for that agency or organization,
  3. Have Direct Loans (or consolidate other federal student loans into a Direct Loan),
  4. Repay your loans under an income-driven repayment plan*, and
  5. Make 120 qualifying payments.

If you have any questions about PSLF or would like assistance navigating the program, don’t hesitate to reach out to our team. No question is off limits for our team of financial advisors at Wealth Dimensions

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