3 things too many people don't know about PSLF, according to an expert who will be forgiven $132,000 of student loans
Ashleigh Bing
- PSLF has rejected 98% of eligible applicants.
- Missing paperwork is one of the most common reasons people are rejected.
- Debt expert Nika Booth says borrowers need to know the terms 'waiver' and 'recertification' to maximize forgiveness.
The Public Service Loan Forgiveness program was implemented in 2017 to help government and non-profit workers access student loan forgiveness after 10 years of payment.
While borrowers remained hopeful, 98% of eligible applicants are denied relief. A 2021 study by the Education Data Initiative shows that 30.7% of claims are denied due to incomplete paperwork, while 35.2% of applications have yet to be processed.
Debt expert Nika Booth, who shares her experience navigating PSLF with her 50,000 Instagram followers, says she almost gave up on loan forgiveness herself. According to records viewed by Insider, Booth's monthly payments totaled over $1,000 per month.
When federal student loan payments were paused in March 2020, Booth learned that paused payments during the pandemic count toward PSLF. With 102 qualifying payments, according to records reviewed by Insider, Booth is only 18 months away from having $132,000 worth of student loans forgiven.
Booth says public servants should know three keywords to make the most of PSLF:
1. Submit your waiver by October 31
In the past, only payments made under income-driven repayment plans were counted towards PSLF. The Biden Administration released a waiver to make more past payments eligible for PSLF. Here are the changes to PSLF that are only valid until October 31:
- Late payments or payments less than the amount due are now eligible.
- Payments are now eligible regardless of which payment plan you had.
- Military service members can now receive credit for the time they spent in active duty.
To take advantage of the limited waiver, you have to submit this form to Federal Student Aid on or before October 31.
Booth has been explaining the waiver to her followers in very simple terms. She says, "I told all of my coworkers about the waiver when it came out. They submitted the paperwork, and within a few months, one of my coworkers got a stack of checks from the Department of Treasury for overpayment because they got their loans forgiven."
2. You must recertify every year
PSLF is only available for borrowers who work full-time in the following sectors:
- Federal, state, or local government
- Federally recognized tribal governments
- Nonprofit organizations that are tax-exempt under Section 501(c)(3) of the tax code
Because PSLF is only for full-time public servants, borrowers must recertify every year to qualify. Booth says this is typically what throws borrowers for a loop. "For example, people who work in healthcare assume, 'Oh, I'm in public service, I'm sure I qualify,'" she adds. "But if you work for a for-profit hospital, you actually don't qualify for PSLF."
To get clarity on whether or not you can recertify for PSLF, Booth suggests speaking with the HR department of your company.
3. Paused payments during the pandemic are eligible
Booth says that many of her followers did not realize that the paused payments during the pandemic count toward student loan forgiveness.
Between March 2020 and August 31, 2022, the date that federal student loan payments are set to return, there are 34 payments that borrowers can count toward their progress. Under the limited waiver, even more past payments are now count toward PSLF, meaning more people are closer to student loan forgiveness than they think.
Booth says, "The limited waiver is giving me a light at the end of the tunnel. For me, it just means I get to move on with the rest of my life 18 months sooner."