What Is a Qualifying Payment for PSLF?

The Public Service Loan Forgiveness (PSLF) program offers a path to forgiveness for federal student loans for individuals working in public service. After 120 qualifying monthly payments, the remaining balance on eligible federal student loans may be forgiven. Understanding what constitutes a “qualifying payment” is fundamental, as specific criteria must be met for payments to count.

Defining a Qualifying Payment

For a payment to be considered qualifying for PSLF, it must meet several distinct requirements. These criteria ensure that only specific types of loans, repayment plans, and employment scenarios contribute to forgiveness.

First, the loan type must be a Direct Loan, including Direct Subsidized, Unsubsidized, PLUS, and Consolidation Loans. Other federal loan types, such as Federal Family Education Loan (FFEL) Program loans or Federal Perkins Loans, do not directly qualify. However, these can become eligible if consolidated into a Direct Consolidation Loan. Only payments made on the new Direct Consolidation Loan count, not payments made on the original FFEL or Perkins loans prior to consolidation.

Second, payments must be made under a qualifying repayment plan. Primary qualifying plans are Income-Driven Repayment (IDR) plans, including Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE) Plan. The 10-year Standard Repayment Plan also qualifies, though borrowers typically pay off loans before reaching 120 payments. Other plans, such as Graduated or Extended Repayment, do not qualify.

Third, a payment must be made while the borrower is employed full-time by a qualifying employer. This includes U.S. federal, state, local, or tribal government organizations, and military service. Not-for-profit organizations tax-exempt under Section 501(c)(3) of the Internal Revenue Code also qualify, along with certain other not-for-profits providing specific public services. Full-time employment means working at least 30 hours per week for one or more qualifying employers, or meeting the employer’s definition of full-time, whichever is greater.

Fourth, each payment must be for the full amount due as shown on the billing statement. Payments must also be made on time, typically within 15 days of the due date.

Finally, 120 distinct qualifying monthly payments are required for forgiveness. These payments do not need to be consecutive; borrowers do not lose credit for previously made qualifying payments if they temporarily work for a non-qualifying employer. This allows flexibility for career changes or periods of unemployment, provided other criteria are met when payments resume.

Specific Payment Scenarios

Various scenarios can influence whether a payment counts towards PSLF, often involving periods when payments might not be actively made. Understanding these nuances helps borrowers manage their path to forgiveness.

Payments made during forbearance or deferment generally do not count toward PSLF. However, temporary exceptions allow some periods to be credited. For instance, months in the COVID-19 student loan payment pause, an administrative forbearance, count as qualifying payments if the borrower met other PSLF qualifications and certified employment for that period.

Certain deferments and forbearances may count if the borrower was employed full-time by a qualifying employer during those months. These include:
Cancer treatment deferment
Economic hardship deferment
Military service deferment
Post-active-duty student deferment
AmeriCorps forbearance
National Guard Duty forbearance
U.S. Department of Defense Student Loan Repayment Program forbearance

For military members, active duty service periods may count even if loans were in deferment or forbearance. Temporary account adjustments have also allowed credit for 12 or more consecutive months of forbearance, or 36 or more cumulative months of forbearance, under specific conditions.

Lump sum payments can cover multiple future qualifying months, up to a certain limit. If a borrower makes a lump sum payment exceeding their regular monthly amount, it can count for up to 12 months of qualifying payments or until the next income-driven repayment recertification date, whichever comes first. This is relevant for AmeriCorps members using their Segal Education Award, which may count for up to 12 qualifying PSLF payments.

Historically, consolidating federal loans reset the PSLF payment count, meaning payments made on original loans before consolidation did not count. However, recent temporary waivers allow past payments on consolidated loans to count, even if made before consolidation. This change provides significant relief for many borrowers who previously lost progress.

Payments made during grace periods or in-school deferment generally do not count towards PSLF. For payments to count, loans must be in an “in-repayment” status, meaning a payment is due, even if that amount is $0 under an income-driven repayment plan. Borrowers cannot make a qualifying payment while loans are in a grace period or in-school deferment.

Tracking and Verifying Payments

Maintaining accurate records and regularly verifying payment counts are essential steps for borrowers pursuing Public Service Loan Forgiveness. Proactive engagement with the process helps ensure eligible payments are recognized.

The Employment Certification Form (ECF), integrated into the PSLF Help Tool, is crucial for verifying qualifying employment and having payments counted. Borrowers should submit this form annually or whenever they change employers to ensure employment history is certified and payment count updated. The PSLF Help Tool assists borrowers by guiding them through eligibility requirements and helping generate the form for digital or manual signatures.

Borrowers can track their qualifying payment count through their loan servicer’s online portal, such as studentaid.gov. This allows individuals to monitor progress toward the 120 required payments.

If payment counts appear incorrect or disputes arise, borrowers should contact their loan servicer promptly. Providing documentation, such as pay stubs, W-2 forms, or payment confirmations, can help resolve issues and ensure accurate counting. The Department of Education aims to provide accurate counts, but borrower vigilance is beneficial.

When federal loans are consolidated, payment counts may be temporarily affected as the new Direct Consolidation Loan is established. Submit the ECF form after consolidation to ensure any eligible past payments, particularly those that may count due to temporary waivers, are properly credited to the new loan. This helps maintain a clear and accurate record of progress towards PSLF.