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KSRE Tuesday Letter

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K-State Research and Extension
123 Umberger Hall
Manhattan, KS 66506-3401
785-532-5820
extadmin@ksu.edu

December 21, 2021

Federal Student Loan Payment Restart and Changes to the PSLF Program

Submitted by Debra Wood for Family Resource Management PFT

Federal Student Loan Payments Set to Restart

Federal student loan payments are set to restart after January 31, 2022, after being on pause during the pandemic. 

If you are a student loan borrower, you can prepare by doing the following:

  • Update your contact info with your loan servicer and at StudentAid.gov.
  • Review your auto-debit enrollment or sign up for auto-debit for the first time. If you use auto-debit, you could get a 0.25% interest rate reduction on your loans.
  • Use Loan Simulator at StudentAid.gov to make sure you are on the best repayment plan, especially if your financial situation has changed.
  • Consider applying for an income-driven repayment (IDR) plan. An IDR plan can make your monthly payment more affordable. Plus, if all your loans are Direct Loans, you can now self-report your income when applying for or recertifying an IDR plan.
  • Review the requirements for loan forgiveness programs, including the recent big changes to Public Service Loan Forgiveness (PSLF). While many changes will be automatic, some borrowers will need to take steps. Learn more about these PSLF changes at StudentAid.gov/pslfwaiver.

 Public Student Loan Forgiveness Changes

On October 6, 2021, the U.S. Department of Education announced a change to Public Service Loan Forgiveness (PSLF) program rules for a limited time as a result of the COVID-19 national emergency. For a limited time, borrowers may receive credit for past periods of repayment that would otherwise not qualify for PSLF.

Many borrowers found after years of payment that they were in the wrong type of loan program or may have consolidated loans only to find out that started the clock over when counting months toward the PSLF program.  This waiver will allow them to get credit for those payments and move closer to loan forgiveness.

If you have FFEL, Perkins, or other federal student loans, you will need to consolidate your loans into a Direct Consolidation Loan to qualify for PSLF both in general and under the waiver. Before consolidating make sure to check to see if you work for a qualifying employer.

Requirements to receive additional qualifying payments include:

  • You must work full time for a qualifying employer during the calendar month you were also in repayment on your loan. 
  • If you have a Federal Family Education Loan (FFEL), Federal Perkins Loan, or other types of federal student loans that are not Direct Loans (these loans are from older programs), you must consolidate the loans into the Direct Loan program by October 31, 2022.

You can log into Aid Summary at https://studentaid.gov/aid-summary to find out how many and what types of loans you have.

Periods of repayment on parent PLUS loans are not eligible under the limited PSLF waiver, but Graduate Plus loans are. For more information, to see if you qualify and what steps to take, visit StudentAid.gov/pslfwaiver.

 Normal PSLF Requirements

  • Receive credit only on Direct Loans.
  • Repay under the Standard Plan or an IDR plan.
  • Make on-time payments.
  • Need to be employed full-time for a qualifying employer in order to receive credit.
  • Can only receive forgiveness if working for a qualifying employer at the time of application and forgiveness.

Changes Until October 31, 2022

  • Receive credit for periods of repayment made on Direct, FFEL, or Perkins Loans.
  • Past payments under any plan count for non-consolidation loans through September 30, 2021.
  • Past payments made on loans before consolidation count, even if on the wrong repayment plan.
  • Past payments that were made late or for less than the amount due count for non-consolidation loans through September 30, 2021.
  • Past payments made on loans before consolidation count, even if paid late, or for less than the amount due.
  • Need to be employed full-time for a qualifying employer in order to receive credit.
  • Can receive forgiveness even if not employed or not employed by a qualifying employer at the time of application and forgiveness.