Public Service Loan Forgiveness Overhaul

By: Kelly Vaillancourt Strobach, PhD, NASP Director, Government Relations

In 2007, the Public Service Loan Forgiveness Program (PSLF) was signed into law. Since 10 years of payments and full-time employment are a prerequisite for forgiveness, the first evaluation of the program's success or lack thereof came in October 2017. As of March 2019, the Department of Education had denied close to 99% of applicants. Even after temporarily expanding the process, yet again nearly all applicants were denied. This program was meant to extend loan forgiveness to public service employees, including those who work in a public school setting, but it has fallen significantly short of its promise. You can find our previous resources, which include background on PSLF, here

On October 6, 2021, the Department of Education announced a series of planned actions to improve PSLF and deliver relief to more borrowers. One major change is the offering of a time-limited waiver that allows borrowers to count payments from all federal loan programs or repayment plans toward forgiveness, including plans and federal loan types that were previously deemed ineligible. The Department estimates that over 20,000 borrowers will be immediately eligible to have their loans discharged without their having to take additional action; over 550,000 borrowers are estimated to see automatic progress toward forgiveness with the limited waiver alone. This waiver will expire on October 31, 2022. You have until then to consolidate your loans, certify employment, and apply for PSLF if you have not already. Visit for more information. The Department of Education urges borrowers to check whether your employer is a certified qualifying employer before making any changes to your loan structure. 

In addition to the waiver, the Department of Education also plans to simplify payment requirements for PSLF, review denied applications and correct processing errors, begin an outreach campaign targeting PSLF-eligible borrowers, and simplify the application process among other changes. You can learn more about the announced changes here

If you have been previously told that your employer does not qualify, and you disagree, there is a process to have that reviewed. In addition, the Department has acknowledged that they may not have every single qualifying employer in the current database online. Do not get discouraged if your employer does not show upIf you have been denied forgiveness, you may be able to get it now through this limited time waiver process. Below we have included a section of commonly asked questions. If you have specific questions about your unique situation, please contact your loan servicer or the Department of Education.

Who qualifies?  
PSLF and qualifying payments only count for payments and employment after Oct 1, 2007. Anyone who works at a qualifying employer, broadly defined as a nonprofit, a government agency, or other nonprofit organization that provides a public service. School districts are included in this definition.   

Where do I start? 
I suggest you start at the PSLF website on the office of student aid. You will need to confirm that you are in the correct repayment plan and have consolidated your loans with Direct Loan. You will also need to certify your employment, and the Department has the forms you need to do this.  

Why all these changes now? 
The Department has determined that it can use flexibilities provided by the HEROES Act of 2003, which allows the Secretary of Education to waive certain rules related to the federal student aid programs during periods of national emergency. In addition, over the last few years, administrative issues with PSLF have resulted in many people being denied forgiveness who likely do qualify. This is an attempt to correct those mistakes.

Do you have to work for a Title I school/district for payments to count?  
No. There is a separate loan forgiveness program targeted at educators that work in Title I schools, but PSLF is available to anyone who works for a qualifying employer. Public school districts are considered a qualifying employer. If you switch schools within the same district that should not matter, but you do need to certify your employment each year.  

What if the online tool does not recognize my employer as a qualified employer? 
If you think you do, in fact, work for a qualifying employer, the Department has outlined steps you can take to have that decision reviewed.   

What if, after correcting errors that said previous payments did not count, it is determined that I made more than 120 qualifying payments?  
Any excess payments will be refunded.  

What if I have already received forgiveness? Can I get a refund to any additional payments I made that previously did not count toward forgiveness? 
No. If you have already received loan forgiveness, you are not eligible to receive a refund.  

Do you have to make payments for 10 years or can you pay it off early? 
You have to make 120 qualifying payments to be eligible for forgiveness.  

What if I made years of payments under the wrong repayment plan. Will I qualify for forgiveness? 
Yes! This waiver is for you. Any payments made while you worked for a qualifying employer will count towards PSLF. However, to have these payments applied, you must consolidate your loans into a Direct Loan (if you have not already) by October 31, 2022, and submit the appropriate PSLF form and employer certification information.  

Does this apply to only federal loans? 
Yes. Private loans cannot be consolidated to Direct Loans.  

If you have direct student loans, do they need to be consolidated? 
No, but you should confirm that you are in the correct repayment plan and that your payments have been counted.  

Will my interest rate change? 
Consolidating loans results in a weighted average of your underlying loans rounded up to the nearest 1/8th of a point. So the variable rate loans would lock in the rate they have now and then as part of the weighted average plus the rounding. 

Will we have to switch payment plans if we still have 2 years left before reaching 10? 
If you are currently enrolled in PSLF, have consolidated your loans, and have verified that you are in the correct repayment plan, then you do not have to do anything. If you are not positive that you are in the right repayment plan, use the PSLF help tool and contact your loan servicer.  

Do payments under the extended repay options count (25 year plans vs. 10 year plans)? 
Payments count toward forgiveness if you made them while employed at a qualified employer AND you are enrolled in public service loan forgiveness. The time-limited waiver is intended to fix the problems with people who were inadvertently placed in the incorrect payment plan.  

Do you need to be 1.0 FTE to be considered full-time for PSLF? 
You’re generally considered to work full-time if you meet your employer’s definition of full-time or work at least 30 hours per week, whichever is greater. If you are employed in more than one qualifying part-time job at the same time, you will be considered full-time if you work a combined average of at least 30 hours per week with your employers. 

When will the PSLF waiver tool be updated? 
Hopefully soon.  

What do I need to check my status? 
You can check your eligibility for PSLF using the online PSLF help tool, which as we mentioned will be updated soon.  

Is there any indication that PSLF will be changed so tuition will be forgiven after 5 years? 
No. Certainly some members of Congress have proposed this idea, but it would require a legislative change, and I do not forsee this being addressed in the near future.  

NASP will continue to share relevant information about the various loan forgiveness options available to school psychologists; however, all inquiries about your specific student loan situation should be directed to your loan servicer or the Department of Education. If you have additional questions, you may reach out to Kelly Vaillancourt Strobach or Becca Murdoch, and we will do our best to get you an answer.