Changes to the Public Service Loan Forgiveness (PSLF) Program and New, Single PSLF Form

Federal Student Aid (FSA) is committed to ensuring borrowers have the information they need to determine if the Public Service Loan Forgiveness (PSLF) Program is right for them. Leveraging our work on the Next Gen FSA initiative, we have made or will make some changes to clarify information, simplify processes, and improve the overall borrower experience with the PSLF Program.

In this announcement, we provide schools a summary of those changes. We hope this high-level information about these PSLF-related improvements will assist you in counseling borrowers interested in the PSLF Program. If you wish to direct your borrowers to more information about these changes, you can provide them with this link to an article on StudentAid.gov.

Qualifying Payment Updates – Prepayments and Lump-Sum Payments

In August 2020, we implemented a policy change to the PSLF Program by updating the definition of a qualifying payment. Specifically, and with the limitations below, regardless of when a payment is made, the payment will be counted as a qualifying payment as long as it was made in full and no later than 15 days after the payment due date. This change allows borrowers to make prepayments or lump-sum payments and have those payments potentially count as qualifying payments (given employment certification is on file and all other eligibility conditions are met) under the PSLF Program for up to 12 months or until the next time their income-driven repayment plan is due for certification, whichever comes first.

Example: A borrower’s monthly payment amount is $100. The borrower makes a $500 on-time payment for November 2020 and is now considered pre-paid through March 2021. Previously, this payment would only count as one qualifying payment for November 2020 (the four early payments for December, January, February, and March would not be counted as qualifying because they were made more than 30 days before the due date). As a result of the policy change, the remaining four months will now be eligible to be qualifying payments (assuming all other PSLF requirements are met, e.g., borrower also has certified employment on file).

The policy change applies to any payment that was or will be made while a borrower’s loans have been serviced by FedLoan Servicing, our designated federal loan servicer for the PSLF Program.

Updates to PSLF Help Tool and Changes to PSLF Forms

In November 2020, we will make two operational changes to help borrowers with the PSLF Program.

• PSLF Help Tool Enhancements – Building on the recent PSLF Help Tool enhancements put in place on StudentAid.gov in June 2020 (see a June 29, 2020 Electronic Announcement), we will complete a major update to the PSLF Help Tool’s design. The redesigned tool will feature a modernized interface and revised format to help borrowers more easily determine their eligibility for the PSLF Program, including a new, single PSLF form (explained more below). We also plan to expand functionality within the employer database, and borrowers who have used the tool before will be able to see a history of their submitted employment information. Finally, we will add a “My Loan Actions” feature. With this feature, borrowers will answer a series of questions that will result in a customized table of borrower loan information and a personalized review of possible next steps to take to attain loan forgiveness.
• New, Single PSLF Form – As part of the next update to StudentAid.gov, we will launch a new, single form for the entire PSLF Program. The new form will be called the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application, or PSLF Form for short. The new form essentially combines the employment certification form and the forgiveness application to be one form. Following the StudentAid.gov update, borrowers will only need to submit this one form to certify their employment or to be considered for forgiveness under PSLF or TEPSLF. Note: FedLoan Servicing will continue to accept the existing (and separate) ECF and PSLF Application for Forgiveness forms, but we hope that this new, single form will reduce confusion for borrowers and make it simpler for borrowers to track their progress toward forgiveness.

Information about other changes coming to StudentAid.gov in November 2020 will be provided in a forthcoming Electronic Announcement.

We appreciate your support of Federal Student Aid and our Next Gen FSA initiative.