Many public service employees who have student loans believe they’re on the right track toward forgiveness. They think they’ve taken the necessary actions and are enrolled in the Public Service Loan Forgiveness (PSLF) program.
However, 99% of applicants who apply for forgiveness are denied! And the #1 reason is due to misinformation... ineligible loans, incorrectly filed forms, and not meeting all of the requirements for the PSLF program are the consequences of misinformation. If you think you’re on the right path toward forgiveness, I would challenge you to read through each section below to make sure you really are. When it comes time to apply, make sure you’re approved for the forgiveness you deserve!
First, I need to point out that you can not be enrolled in the Public Service Loan Forgiveness program. This is not a program you enroll into, rather apply for. I hear so many borrowers say: “I’m enrolled in PSLF.” And I have to stop them there and ask how they are enrolled. Normally I’m met with “I work in public service and make monthly payments.” I then need to ask “Do you know if you have direct loans, if you’re on an income-driven repayment plan, have you sent in your ECF to Fedloan each year?” The answer is always, no.
Ineligible Loans
If you have direct subsidized or unsubsidized loans, you’re good to go. Specifically, Direct Stafford, Direct PLUS for graduates/professionals, and Direct Consolidation are all loan types that are eligible for PSLF.
Did you take out loans before 2010? If so, you may have FFEL Loans and these do NOT qualify for PSLF. However, these loans can become eligible if they are consolidated into a Direct Consolidation Loan.
By consolidating, the sum of your FFEL Loans will be the balance of your new Direct Consolidation Loan, and your new interest rate will be the weighted average of your FFEL Loan interest rates. Even if you only have one FFEL Loan, you can consolidate this loan into a Direct Consolidation Loan for the purposes of qualifying for PSLF. Note, make sure you consolidate your FFEL Loans into a Direct Consolidation Loan, and not a FFEL Consolidation Loan. Many people also make this mistake! Remember, Direct Consolidation Loan.
Incorrectly Filed Forms
The U.S. Department of Education is very finicky about how forms and applications are filed. The most common errors made are: leaving items blank, inconsistencies, invalid employment dates, correction errors (signifying with an initial to approve changes on the application). Double check your forms and applications! And if you are denied due to incorrectly filed forms, reach out to a student loan professional who can help you navigate exactly why you were denied and what other mistakes could the Dept. of Ed. flag. Most of the time, you will only be notified of one reason why you’re denied even though there might be multiple mistakes.
Also, many people forget to submit their Employment Certification Form each year in order for their payments to count! Don’t make this mistake!!! Get your employer to sign the form each year and turn it in when you re-certify your income to stay enrolled in your chosen income-driven repayment plan.
Not Meeting All of the Requirements
Pigging backing off of income-driven repayment, this is also a requirement for the PSLF program. You’ll need to enroll in an income-driven repayment plan and make 120 monthly payments. These plans cap monthly payments in proportion to your monthly income and are actually very beneficial to those pursuing PSLF, because if you pay the lowest amount possible per month, you’re ensuring you’re maxing out your forgiveness potential!
There are four different plans to choose from, you can read more about each plan on our blog, How To Qualify For Income-Based Repayment Plans. You will need to re-certify your income each year to stay enrolled in your chosen income-driven repayment plan. Don’t skip re-certifying, because you’ll be kicked off your income-driven repayment plan back to the Standard plan. Your payments will be higher AND they will not count toward the 120 payments needed for PSLF.
Sweating a lil bit? 🥵
Don’t worry! You can check for FREE if you’re on the right path toward forgiveness through your Chipper account. You’ll easily be able to see what kind of loans you have, which is the first step in determining if you’re on the right path.
If you do need to consolidate your FFEL Loans to be eligible for PSLF, you can do so directly through Chipper Concierge, you can also enroll in an income-driven repayment plan (or change IDR plans), as well as fill out all recertification forms and forgiveness applications the correct way as we’ve done the hard work for you.
Student loan forgiveness programs can be very confusing and the requirements to be eligible to apply can seem complicated. But you don’t have to do it alone!
