Does the COVID Forbearance Count Towards PSLF?

Federal student loan forgiveness programs offer pathways to reduce educational debt, and for many, the Public Service Loan Forgiveness (PSLF) program is a significant consideration. During the COVID-19 pandemic, a nationwide payment pause was implemented, leading many borrowers to question how these unique circumstances would affect their progress toward PSLF. Understanding the details of both the PSLF program and the pandemic-era relief is important for borrowers seeking loan forgiveness.

Understanding Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program forgives outstanding federal student loan balances for individuals working in public service. Borrowers must meet specific criteria related to their loan type, employment, and repayment history.

Only Direct Loans qualify for PSLF. Other federal loan types, such as Federal Family Education Loan (FFEL) Program loans or Federal Perkins Loans, do not directly qualify but can become eligible if they are consolidated into a Direct Consolidation Loan.

Qualifying employment for PSLF is based on the employer, not the specific job duties performed. Eligible employers include U.S. federal, state, local, or tribal government organizations, including U.S. military service, and most not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code. Certain other non-profit organizations that provide specific public services may also qualify. Borrowers must be employed full-time, typically defined as working at least 30 hours per week, for a qualifying employer.

Borrowers must make 120 qualifying monthly payments to be eligible for forgiveness. These payments do not need to be consecutive, allowing for periods of non-qualifying employment or payment pauses. Payments must be made under an eligible repayment plan, with income-driven repayment (IDR) plans being the most common choice for PSLF. While the 10-year Standard Repayment Plan is also eligible, borrowers on this plan would typically repay their loans in full before reaching 120 payments, leaving no balance to forgive.

The COVID-19 Payment Pause Explained

The federal student loan payment pause began in March 2020 in response to the COVID-19 pandemic. This relief measure was initially enacted through the CARES Act. The pause provided significant financial relief to millions of borrowers by temporarily suspending monthly payments.

During this period, the interest rate on eligible federally held student loans was set to 0%. Borrowers were not required to make payments, and automatic debit payments were suspended.

The payment pause was extended multiple times through various executive actions. It officially ended on September 1, 2023, with interest resuming. Most borrowers saw their first student loan payments due in October 2023.

Counting COVID Forbearance Payments for PSLF

Months during the federal student loan payment pause count towards the 120 qualifying payments required for Public Service Loan Forgiveness. Borrowers received credit for these months as if they had made a qualifying payment, even though no actual payment was required.

For these months to count, a borrower must have been employed full-time by a qualifying PSLF employer during the specific months of the payment pause. This employment requirement remained in effect despite the payment suspension. The policy applied to all federally held Direct Loans, which are the only loan types eligible for PSLF.

This treatment of the payment pause months as qualifying payments accelerated the path to forgiveness for many public service workers. It allowed borrowers to accumulate PSLF credit without making monthly payments. The Department of Education stated that these suspended payments count toward the 120 monthly payments required under the PSLF program.

Steps to Ensure PSLF Credit

To ensure that all eligible months, including those during the COVID-19 payment pause, are correctly counted towards PSLF, borrowers must take specific administrative actions. The primary step involves regularly submitting the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application form (PSLF Form). This form verifies qualifying employment.

It is recommended to submit this form annually or whenever there is a change in employment or employment status. Regular submission helps track progress and ensures that all qualifying months are properly recorded. The PSLF Help Tool on StudentAid.gov can assist in completing and submitting the form, allowing for electronic signatures and direct submission.

Borrowers should actively monitor their qualifying payment count through their loan servicer or by logging into their account on StudentAid.gov. The “PSLF/TEPSLF Payment Progress” section on the dashboard provides an overview of qualifying payments, offering a month-by-month breakdown.

If a borrower discovers discrepancies in their payment count or if the COVID forbearance months are not accurately reflected, they should take action. This may involve contacting their loan servicer to request a manual recount or submitting updated PSLF Forms for the periods in question. For persistent issues, borrowers can submit a reconsideration request if they disagree with the payment count displayed on StudentAid.gov or provided by their servicer.