PSLF Changes That Borrowers Should Know About

As we hope you know, student loan payments have resumed for graduates. While this has dominated recent headlines, critical PSLF changes have also been implemented that may benefit you as well.

  • Definition of Full-Time: This is now simply 30 or more hours per week, even if you’re under 1.0 FTE with your employer. Previously, if you were anything less than 1.0 FTE, you weren’t eligible for PSLF.
  • Definition of Qualifying Employment: Now expanded to include contractors who provide services that by State law cannot be filled or provided by a direct employee. This is a significant change for hospital staff in California and Texas specifically.
  • Late, Installment and Lump Sum Payments: Will now qualify for PSLF when you certify employment for these periods.

If you’ve met the NEW definitions for full-time and eligible employment, we encourage you to submit PSLF Forms for past employment, even if past forms were denied due to the old rules. 

Lastly, a few reminders related to repayment:

  • 12-Month “On-Ramp”: If you anticipate a struggle to make payments, the 12-month on-ramp will prevent default over the next year. Remember, non-payment won’t count towards PSLF and you may still qualify for “0 “payments” through SAVE. To maximize savings, we encourage you make your SAVE payments as best possible.
  • IDR Account Adjustment: If you have recently consolidated your loans, you may have seen that your PSLF payment count has temporarily been reset to “0”. If you had confirmed qualifying payments on any of the loans included in the consolidation, the new loan will be updated when the IDR Account Adjustment captures them, which is scheduled for the Fall. If you’ve already met all the PSLF requirements for 10+ years, are expecting forgiveness, and still working for a qualifying employer, you don’t need make payments while the IDR adjustment is pending.

About Author

Jason DiLorenzo

Jason is the Founder of BenElevate, an early stage fintech company working to address the student debt crisis by bringing to bear tools, expertise, and bespoke solutions to streamline student debt management for borrowers and employers.

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