Education Department Announces Permanent Changes to the Public Service Loan Forgiveness Program

The Biden administration announced a number of permanent changes to the Public Service Loan Forgiveness (PSLF) program to make it easier for eligible borrowers to get student loan relief.

By , Attorney · University of Denver Sturm College of Law

On October 25, 2022, the Biden-Harris Administration announced a plan to implement permanent changes to the Public Service Loan Forgiveness (PSLF) program after the Limited PSLF Waiver ends on October 31, 2022. These changes will make it easier for eligible borrowers to cancel their student debt.

Borrowers will get many of the same benefits already available under the Limited PSLF Waiver.

What Is Public Service Loan Forgiveness (PSLF)?

The Public Service Loan Forgiveness (PSLF) program was developed to provide debt relief for public servants, like firefighters, nurses, and teachers, by canceling their federal student loans after ten years of public service. But in the past, around 98% of people who applied for PSLF were rejected.

Most applications were denied due to borrowers failing to meet program requirements for reasons like not having eligible student loans, failing to make 120 qualifying payments, or not working for a qualified employer. Other applications were denied because of missing or incomplete information on an employment certification form.

So, to help more borrowers qualify for loan forgiveness, the U.S. Department of Education is making permanent changes to the PSLF program.

Upcoming Permanent Changes to the PSLF Program

Specifically, the U.S. Department of Education announced the following lasting improvements to the PSLF program under new regulations.

Qualifying Payments

The Education Department is expanding what types of payments qualify for the PSLF program. Borrowers can get credit toward PSLF on payments made late, in installments, or with a lump sum.

Previously, a payment wouldn't count for forgiveness if it was more than 15 days late or wasn't for the full amount, even if only a few pennies short.

Deferments and Forbearances

The new regulations expand the situations in which it's acceptable for a borrower to defer or pause (forbear) their payments and still qualify for PSLF, including:

  • cancer treatment deferment
  • military service deferment
  • post-active-duty student deferment
  • economic hardship deferment, including service in the Peace Corps
  • AmeriCorps and National Guard service forbearances
  • U.S. Department of Defense Student Loan Repayment Program forbearance, and
  • administrative or mandatory administrative forbearances.

The new program counts these periods of deferment or forbearance toward PSLF.

Defining "Full-Time" Employment

The department clarified that full-time employment is now defined as 30 hours per week with more specific guidelines for adjunct faculty and lecturers.

Prior rules required borrowers to either work 30 hours per week at multiple jobs or whatever their employer defined as full-time, which led to confusing and varying standards. Under the new regulations, working 30 hours a week will be considered full-time.

Eligibility for PSLF

Only Direct Loans qualify for PSLF.

When These Changes Go Into Effect

The regulations will be published soon and go into effect on July 1, 2023.

Also, One-Time Income-Driven Repayment (IDR) Account Adjustments

The Education Department will also retroactively credit borrowers toward 20-year or 25-year student loan forgiveness programs under Income-Driven Repayment (IDR) plans.

These one-time improvements will adjust a borrower's account by awarding credit for the following:

  • any month in which a borrower was in a repayment status, regardless of whether payments were partial or late, the loan type, or the repayment plan
  • any month in which loans were in an eligible repayment, deferment, or forbearance status before consolidation
  • months while a borrower spent at least 12 months of consecutive forbearance
  • months while a borrower spent at least 36 cumulative months in forbearance, and
  • any month spent in deferment (exception for in-school deferment) before 2013.

These periods also result in credit toward PSLF if the borrower has certified qualifying employment overlapping the same periods.

To receive this credit toward IDR, you must have Direct Loans or FFEL loans that the Education Department manages. Borrowers with other types of federal loans must consolidate into the Direct Loan program to get the credit. You must consolidate by July 2023. Because it might take a few months for the consolidation process, you should apply for consolidation no later than May 1, 2023.

Starting November 2022, borrowers with 20 years (that's 240 monthly payments) or 25 years (300 monthly payments) of payments through these changes will start receiving loan discharges. Borrowers who applied for PSLF before October 31, 2022, and reach 120 payments because of the deferment and forbearance changes will also get loan discharges.

Borrowers who get additional credit for IDR or PSLF through the one-time account adjustment but don't reach the required monthly payments for forgiveness under the programs will have their accounts adjusted in July 2023.

Get More Information

For details, read the U.S. Department of Education's Fact Sheet: Charting the Path Forward for Public Service Loan Forgiveness.