Does COVID Student Loan Forbearance Count Towards PSLF?
Navigate the complexities of the COVID-19 student loan payment pause and its implications for Public Service Loan Forgiveness eligibility.
The Public Service Loan Forgiveness (PSLF) program offers a pathway to debt relief for individuals dedicated to public service. It provides forgiveness for the remaining balance on eligible student loans after a specific period of qualifying payments and employment. The COVID-19 pandemic introduced a period of student loan payment suspension, leading many borrowers to question how this pause might impact their progress toward PSLF. This article clarifies the interaction between the COVID-19 payment pause and PSLF eligibility.
Public Service Loan Forgiveness Program Fundamentals
The Public Service Loan Forgiveness program helps individuals in public service by forgiving their federal student loan debt. Eligibility for PSLF depends on several requirements.
Borrowers must be employed full-time by a qualifying employer. This includes U.S. federal, state, local, or tribal government organizations, and most 501(c)(3) non-profit organizations. Certain other non-profit organizations that provide specific public services, such as public health or education, may also qualify, even if they are not 501(c)(3) organizations. Full-time employment is defined as working at least 30 hours per week, or the employer’s definition of full-time, whichever is greater.
Only federal Direct Loans are eligible for PSLF. Other federal loan types, such as Federal Family Education Loan (FFEL) Program loans or Federal Perkins Loans, do not directly qualify. However, these loans can become eligible if consolidated into a Direct Consolidation Loan.
Borrowers must make 120 qualifying monthly payments. These payments do not need to be consecutive. Each qualifying payment must be made under a qualifying repayment plan, typically an income-driven repayment (IDR) plan, while the borrower is employed full-time by a qualifying employer.
COVID-19 Payment Pause and PSLF Eligibility
The COVID-19 pandemic led to a temporary federal student loan payment pause, also known as administrative forbearance. This period began on March 13, 2020, and ended on August 31, 2023. During this time, payments were suspended, and interest rates were 0% for most federally held student loans.
For borrowers meeting other PSLF qualifications, months during the COVID-19 payment pause counted as qualifying payments toward PSLF. This credit was applied as if monthly payments had been made, even though no actual payment was required.
This benefit applied to borrowers with Direct Loans who worked full-time for a qualifying employer throughout the payment pause. If a borrower maintained qualifying employment from March 2020 through August 2023, those months are recognized as progress toward the 120 payments needed for PSLF.
Ensuring Your Payments Count
To ensure months during the COVID-19 payment pause are credited toward PSLF, borrowers should take steps. The Employment Certification Form (ECF) verifies qualifying employment periods and tracks PSLF progress. It is recommended to submit this form regularly, such as annually or when changing employers.
The PSLF Help Tool on the Federal Student Aid website assists borrowers in determining employer qualification, generating the ECF, and submitting it. Borrowers will need their employer’s Employer Identification Number (EIN) and dates of employment, often found on a W-2 form.
After submitting an ECF, borrowers should regularly check their PSLF payment tracker through their loan servicer’s online account. This tracker shows confirmed qualifying payments. Monitoring this ensures all eligible months, including those from the COVID-19 forbearance, are correctly reflected. Address discrepancies promptly with the loan servicer.
Only Direct Loans are eligible for PSLF. If a borrower had other federal loan types, like FFEL or Perkins Loans, during the COVID-19 payment pause, those months only counted if the loans were consolidated into a Direct Loan by a specific deadline. This requirement underscores the importance of having the correct loan type to benefit from PSLF and the payment pause.
Addressing Common Scenarios and Next Steps
Borrowers may encounter specific situations requiring additional action. One common scenario involves consolidating non-Direct Loans to ensure past payments count.
The consolidation process typically involves applying through StudentAid.gov. This combines multiple federal student loans into a single Direct Loan, making it eligible for PSLF. While consolidation can reset the payment count under normal circumstances, temporary waivers, such as the one-time Income-Driven Repayment (IDR) adjustment, have allowed past payments on consolidated loans to count. Borrowers with eligible non-Direct Loans should consider consolidation to maximize their qualifying payment count.
Disputing payment count errors is another step borrowers might need to take. If the PSLF payment tracker does not accurately reflect qualifying months, especially from the COVID-19 forbearance, borrowers should contact their loan servicer. This involves submitting documentation like employment records or payment histories. If the servicer does not resolve the issue, further escalation options may be available through the Department of Education.
As the COVID-19 payment pause concluded, making qualifying payments resumed for borrowers pursuing PSLF. Ensure enrollment in a qualifying repayment plan, such as an income-driven repayment plan, and make timely payments. Consistent qualifying payments are essential to progress toward the 120 payments needed for loan forgiveness.