INDIANAPOLIS — Public Service Loan Forgiveness is a student loan forgiveness program that started in 2007. It's meant to help people who work in the public sector including teachers, police officers and firefighters said Cecilia Clark, a student loan expert with NerdWallet.
"The intent, get people excited about public service and we'll pay off your federal student loans, or will forgive your federal student loans," Clark said.
Forgiveness criteria include the proper loan type, a qualifying employer and making 120, or 10 years' worth of loan payments.
But when it came time for the forgiveness to kick in more than a decade later, Clark said the approval rate was significantly low.
"People who thought they should qualify, weren't qualifying," Clark said. "People were getting rejection notices and the perception was just that it's kind of not what it's made out to be."
To increase the number of public service workers who qualify for forgiveness, the government is offering a limited-time waiver until Oct. 31, 2022.
That waiver is temporarily tweaking some of the rules.
The U.S. Department of Education said the temporary rules are because of the COVID-19 national emergency.
"If you made a late payment before, they might have been like, 'Nope, doesn't count.' Now, fill out the form and they may count it. Also, if you have Federal Family Education Loans (FFEL) or Perkins Loans, and you were making payments under those, they were not counted. Now, if you consolidate those loans, they will go back and count those previous loan payments," Clark said.
If you think your forgiveness was wrongly rejected, Clark said this is what you need to do.
- Make sure your loan is federal, not private
- Next make sure your employer qualifies using the PSLF tool
- Head to StudentAid.gov and certify your loans by Oct. 31, 2022
If you call your loan servicer and can't get the answers to your questions, file a complaint with the Consumer Financial Protection Bureau (CFPB).
The CFPB recently criticized loan servicers saying in part that they have "found that servicers made deceptive statements to borrowers about their ability to become eligible for PSLF. "