Unpacking PSLF: Webinar Recap and Key Takeaways

Couldn’t make it to Summer’s webinar breaking down everything you need to know about the Public Service Loan Forgiveness Program (PSLF)? Don’t worry if you weren’t in the online crowd. We want all eligible borrowers to take advantage of the program, so we’ve gathered the eight key takeaways from the webinar here, including the steps you need to take to make sure you’re on the path to forgiveness.

1. PSLF is the most promising opportunity in the student loan world. If you work at a qualifying government or nonprofit institution and you have student loans, make sure you’re participating in the PSLF program. After 120 monthly payments (or 10 years of total public service), you can have your debts forgiven, tax-free. Right now, a better deal doesn’t exist in the student loan space.

2. There are three requirements you must meet to make sure you can take advantage of PSLF:

• Employment: In order to qualify for PSLF, you must make payments while you work full time at a government organization (like the government itself or a public school or university) or for a qualifying nonprofit employer. You can work 30 or more hours per week there on average, or work multiple part time jobs at qualifying employers for a combined total average of 30 or more hours per week.
• Loan Types: Only federal student loans qualify for PSLF, specifically Direct loans and Direct Consolidation loans. Most public loans offered today are Direct Loans, but if you have other loan types like FFEL, Perkins, or Parent PLUS loans, you’ll need to consolidate them into a Direct Loan to qualify. (Past payments on FFEL and Perkins loans will temporarily count under the Limited Waiver — more below — but they still must be consolidated first.)
• Repayment Plan: To make the most of the program, you’ll want to make monthly payments that are as low as possible for 10 years, so that you’ll maximize the amount eventually forgiven. Typically, this is done under an income-driven repayment (IDR) plan. In order for payments to qualify once the current Limited Waiver expires, payments must be made under an IDR plan to receive forgiveness.

3. You must certify your employment with every qualifying employer. The only way the Department of Education will know you’re on the path to forgiveness is if you certify your employment at every nonprofit or government employer you work for during your 10 years of service. The certification form verifies that you work at a qualifying public service institution full time. It’s a relatively simple form (one of the only simple parts of this program!), and it must be signed off on by you and someone who can verify your employment, like an HR rep or a boss. We recommend you send it at least once a year for your current employer.

4.  A Limited Waiver is in place for the PSLF until October, and it may help you achieve forgiveness faster. The Department of Education has issued a limited waiver that is making more past payments, loan types, and repayment plans eligible for the PSLF program. For more information about exactly which types of payments are newly eligible, you can check out our PSLF guide here or get in touch with us today.

Keep in mind the limited waiver is only in effect until October 31, 2022. It’s best to get your paperwork and consolidation in now so that if you find down the line you need to make changes, you have plenty of time to do so before the temporary benefits expire.

5. You may need to consolidate your loans to take advantage of newly qualifying PSLF payments. If you have FFEL or Perkins Loans, these can be consolidated to newly qualify for the PSLF program before October 31, 2022. If they had already been consolidated in the past, you just need to certify past employment before October 31 to make sure they qualify. Past payments on Parent PLUS loans do not count toward forgiveness, but they can be consolidated to qualify going forward.

6. Your loan servicer may change. There is currently only one servicer who handles Direct Loans: FedLoan Servicing. So, if you consolidate to qualify for PSLF, you will be notified that your loans are now handled by FedLoan. However, there’s another wrinkle this year. FedLoan will not be renewing its contract to handle those loans, so MOHELA will take its place going forward. The transfer has not happened yet. We understand that it can be stressful to deal with so many changes outside of your control, but know that the servicer change(s) will not affect your payments or your path to forgiveness — it only changes who processes the bills.

7. It’s taking a long time for people to hear back from the Department of Education. The Department of Education is backlogged with requests and some people are waiting as long as three months to hear back about their forgiveness status. If you’re having trouble sitting tight after you’ve submitted all your paperwork, you can re-submit your employment certification form, or read about other tips in our blog post on “the waiting game.”

8. Summer can do all this for you. Summer’s mission is to improve borrowers’ financial health by reducing their student debt. Here’s what we can do for you: 

• Provide personalized guidance: Since so many factors go into each individual borrower’s situation, there’s no one-size-fits-all solution to student loan repayment and forgiveness. That’s why our online tools assess each borrower and each loan individually, providing customized guidance based on your financial situation and loan details.
• Send forms for you: We make the paperwork process quick and seamless, sending you digital copies of forms with clear info about what’s needed from you. We can even send forms to your HR teams so you don’t have to chase down signatures.
• Boosts your bank account: Summer understands how much of a burden financial stress can be. We help borrowers save an average of $333 per month and $80,000 over the lifetime of their loans. Read more about some of our PSLF success stories here!

Catch the full webinar recording.

If you’re an employer considering Summer as an employee benefit, schedule a one-on-one demo with our product specialists to see how Summer can work for your employees.