It’s time for a tune up! The temporary student loan benefits in the CARES Act (like the pause in payments and interest) are set to expire in October. If you’re working toward Public Service Loan Forgiveness (PSLF), it’s especially important to be on top of recertification and qualifying payments to make sure you’re still on track for forgiveness. Loan servicers may be overwhelmed and delayed with paperwork and requests for help come the fall, so now is a great time to beat the rush. Here are our very best tips to stay on track:
Tips for Everyone
Even if you’re already doing everything right for PSLF, there are a few things you can double-check to make sure you’re set up correctly for October.
Check your repayment plan. To receive forgiveness under PSLF, you’ll need to be enrolled in an income-driven repayment (IDR) plan. If you’re not in an IDR plan already, you can enroll now to make sure your payments are affordable and eligible in October. You still won’t have to make payments in the meantime, but submitting now will make sure you’re all set come the fall.
If you’re already enrolled in an IDR plan, you can get one step ahead by recertifying your plan now rather than waiting until it’s required. You’ll have more time before you need to recertify next, and you can avoid any potential paperwork backlog that delays your form being processed. If your income went up this year, you can wait until you’re required to recertify so your payment doesn’t go up as well!
Check your qualifying payments. If you’re already working toward PSLF, you probably know that it can be a bit of a challenge to have your qualifying payments counted correctly. Log in to your account at FedLoan Servicing (the servicer that handles PSLF) and double check their count of your qualifying payments. If something doesn’t look right, let them know. It’s a good time to make sure your previous employment certification forms have been processed and approved.
Optional: Submit a new employment certification form. If it’s been over a year since the last time you submitted an employment certification form, you can submit a new form to update your count of qualifying payments. In fact, this is the only way to get FedLoan and the Department of Education to keep counting your payments. While FedLoan has told some borrowers that they’re not processing employment certification forms during the pandemic, we know that others have been processed and approved. If you’re told to wait, it’s ok to still request that your form be processed right away!
If You Made Payments After March 2020
Some folks chose to continue to make payments on their loans over the past year even though it wasn’t required: if you meet the other requirements for PSLF, the months from March 2020 to September 2021 will qualify even if you didn’t make payments.
If you’re someone who has continued to make payments, check with FedLoan Servicing to make sure you won’t be put into “paid ahead” status when payments resume. This could impact your future payments and make them ineligible for PSLF. You may need to take a refund from FedLoan of any payments you’ve made during the pandemic to prevent “paid ahead” status from being applied to your account. The good news: even if you take a refund, these months will still qualify toward the 120 required monthly payments for forgiveness.
If You Changed Jobs
If your PSLF-qualifying employer has changed in the last year, make sure your payments from both will count toward PSLF! That’ll mean submitting one employment certification form for your old employer, and one for your new one. As we noted above, some borrowers have been told that forms aren’t currently being processed, but many we’ve worked with have had forms successfully processed and approved. If you’re told to wait, it’s ok to push back and ask that your form be processed sooner!
If You’re New to PSLF or Not Sure You Qualify
If you haven’t started the PSLF process or aren’t sure if you qualify, now is a great time to find out! The primary requirements for this program are that you work full time in public service (for example: the government, a public school, or a non-profit organization), have Direct loans, and are enrolled in an income-driven repayment (IDR) plan.
Summer can help you get set up and ready to go. You can use Summer’s PSLF tool to make sure you qualify and submit an employment certification form. If you need to change your loan type or repayment plan in order to qualify, you’ll be redirected to our Income-Driven Repayment tool first. Either way, we’ll be here to help each step of the way.
If You Have Any Loans In Default
Even if you’re on track for PSLF with some of your loans, you may have older loans like Perkins or FFEL loans. Those older loan types didn’t qualify for the payment and interest freeze from the CARES Act, and may have gone into default if you stopped making payments. To check if you have loans in default, you can sync your loan information with Summer, or head to Federal Student Aid directly. Loans in default may be at a different loan servicer than the one you usually use to make payments, so it’s important to not just look at your servicer, but also at information from the Department of Education.
If you do have student loans in default, don’t panic! But it’s a great idea to work on the next steps for getting them out of default as soon as possible. There are several avenues available, and we’ll make a recommendation for you when you sync your loans with Summer. The CARES Act included benefits for loans in default that will also expire in October (like a pause in collections activity), so now is the time to work on next steps!
Many of us here at Summer are student loan borrowers ourselves, so we know how challenging it can be to navigate all of these different rules and changes. You can reach our team of experts at hello@meetsummer.org and we’d be happy to help.
