Does COVID Forbearance Count Towards PSLF?
Decipher how COVID-19 forbearance and other loan pauses impact your PSLF payment counts and ensure accuracy.
The Public Service Loan Forgiveness (PSLF) program offers student loan relief for individuals dedicated to public service. The COVID-19 student loan payment pause raised questions about how it and other forbearance periods affect PSLF progress. This article clarifies how these periods are treated under PSLF.
Understanding Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) aims to encourage careers in public service by forgiving the remaining balance on eligible federal student loans. To qualify, a borrower must meet several requirements: working full-time for a qualifying employer, having eligible federal student loans, and making 120 qualifying monthly payments under an accepted repayment plan.
Qualifying employment means working for a U.S. federal, state, local, or tribal government organization, including military service, or a qualifying not-for-profit organization that is tax-exempt under section 501(c)(3) of the Internal Revenue Code. Full-time employment involves working at least 30 hours per week, or the employer’s definition of full-time, whichever is greater.
Only Direct Loans are eligible for PSLF. Other federal loans like Federal Family Education Loan (FFEL) Program loans or Federal Perkins Loans may become eligible if consolidated into a Direct Consolidation Loan. Qualifying payments are 120 monthly payments made under an income-driven repayment (IDR) plan, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), Income-Contingent Repayment (ICR), or Saving on a Valuable Education (SAVE). While payments made under the 10-year Standard Repayment Plan are qualifying, borrowers need an IDR plan to have a balance remaining to be forgiven after 120 payments.
The COVID-19 Payment Pause and PSLF Eligibility
The COVID-19 pandemic prompted an automatic payment pause on most federal student loans from March 13, 2020, to August 31, 2023. During this period, interest rates were 0%, and payments were not required. For PSLF, these months automatically counted towards the 120 qualifying payments, provided the borrower maintained qualifying employment.
This automatic counting occurred even with $0 payments. The period was treated as if payments were made for PSLF purposes, offering a unique benefit compared to traditional forbearance. To receive credit for these months, borrowers needed to certify their employment for the duration of the payment pause.
Getting Credit for Other Forbearance Periods
Traditional periods of forbearance, where loan payments are temporarily suspended, generally do not count towards PSLF. However, the Income-Driven Repayment (IDR) Account Adjustment, also known as the IDR Waiver, provided a mechanism for certain long-term forbearance periods to be credited towards PSLF. This adjustment recognized that some borrowers spent extended periods in forbearance that would have otherwise counted toward forgiveness if they had been in an IDR plan.
Under this adjustment, borrowers received credit for periods of forbearance if they had 12 or more consecutive months in forbearance, or 36 or more cumulative months. These specific forbearance periods, excluding the COVID-19 payment pause, were treated as time in repayment for PSLF purposes.
Steps to Ensure Accurate PSLF Payment Counts
Borrowers pursuing Public Service Loan Forgiveness should ensure their payment counts are accurately tracked. A primary action involves regularly submitting the PSLF Employment Certification Form (ECF). This form verifies qualifying employment and allows the loan servicer to track progress toward the 120 required payments. It is recommended to submit the ECF annually, or whenever employment changes, to ensure consistent tracking.
Another important step for some borrowers is loan consolidation. If a borrower has federal student loans that are not Direct Loans, such as FFEL Program loans or Federal Perkins Loans, they must consolidate them into a Direct Consolidation Loan to become eligible for PSLF. Consolidation also allows past payments on eligible loans to count under the IDR Account Adjustment. After employment certification and, if necessary, loan consolidation, borrowers should regularly check their official PSLF payment count through their loan servicer’s online portal. This allows borrowers to monitor their progress and confirm that all qualifying periods, including the COVID-19 payment pause and eligible forbearance periods under the IDR Adjustment, are correctly applied.