Does COVID Deferment Count Towards PSLF?
Understand how the COVID-19 student loan payment pause impacts your Public Service Loan Forgiveness progress and what steps to take.
Student loan deferment allows borrowers to temporarily postpone payments on their federal student loans. Public Service Loan Forgiveness (PSLF) offers a path to debt cancellation for individuals working in public service roles. Many borrowers have inquired about how the temporary student loan payment pause enacted during the COVID-19 pandemic impacts their progress toward PSLF. This article clarifies the specifics of the COVID-19 payment pause and its direct effect on qualifying payments for loan forgiveness.
Understanding the COVID-19 Payment Pause
The COVID-19 student loan payment pause, also known as administrative forbearance, originated with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This measure was implemented to provide financial relief to federal student loan borrowers during the pandemic. It initially began on March 13, 2020, and was subsequently extended multiple times by both the Trump and Biden administrations.
During this extensive pause, payments were automatically suspended for most federal student loans held by the U.S. Department of Education. This included all Direct Loan Program loans, as well as some Federal Family Education Loan (FFEL) Program and Perkins Loan Program loans held by the Department. Additionally, interest accrual on these eligible loans was set to 0% for the duration of the forbearance period. The payment pause officially concluded on August 31, 2023, with regular interest rates resuming on September 1, 2023, and payments restarting for most borrowers in October 2023.
Counting Payments Towards PSLF
The periods during which payments were paused due to COVID-19 count as qualifying payments for Public Service Loan Forgiveness (PSLF). This special administrative forbearance was specifically designed to count toward the 120 monthly payments required for PSLF. This means that even though borrowers were not required to make actual payments, these months were still credited toward their forgiveness progress.
For these $0 payments to count, borrowers needed to meet other PSLF requirements during the pause. The borrower must have been employed full-time by a qualifying employer for the duration of the payment pause. Qualifying employers include U.S. federal, state, local, or tribal government organizations, or not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code. Full-time employment is defined as working at least 30 hours per week.
Only loans under the Direct Loan Program are eligible for PSLF. If a borrower had other types of federal loans, such as FFEL Program or Perkins Loans, they needed to consolidate them into a Direct Consolidation Loan to make them eligible for PSLF. The $0 payments during the COVID-19 pause still counted as qualifying payments for these consolidated loans, provided all other PSLF criteria were met.
Ensuring Your Payments Count
To ensure that the periods of the COVID-19 payment pause are properly credited toward your Public Service Loan Forgiveness (PSLF) payment count, borrowers must submit the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application form. This form, often referred to as the Employment Certification Form (ECF), is the mechanism for verifying your qualifying employment. Submitting the ECF allows the Department of Education to verify your employer’s eligibility and track your progress toward the 120 required payments.
It is recommended to submit this form annually or whenever you change employers to keep your payment count updated and accurate. This regular certification helps create a comprehensive record of your qualifying employment over time. The easiest way to complete and submit the ECF is through the PSLF Help Tool on the Federal Student Aid website, which facilitates electronic submission and allows for digital signatures from your employer.
After submitting the ECF, your loan servicer will review your employment information and update your qualifying payment count. Borrowers can monitor their PSLF progress, including the number of qualifying payments made, by logging into their StudentAid.gov account and navigating to their dashboard. If discrepancies are found in the payment count, or if certain periods are not reflected correctly, borrowers should contact their loan servicer to address these issues and provide any necessary documentation.