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You can now apply for limited student loan forgiveness. There is changes announced by the U.S Department of Education regarding its Public Service Loan Forgiveness program. This comes days after thousands of borrowers applied for forgiveness, with nearly all of them being rejected by the federal government.
What is Public Service Loan Forgiveness? How did it originate?
The Public Service Loan Forgiveness is a program that was launched in 2007 in an effort to steer more college graduates into public service. As long as they made 10 years of payments on their federal student loans, the program promised to erase the remainder.
The program, however, has proved anything but forgiving. Before Wednesday’s announcement, only 16,000 borrowers had seen their debt forgiven via the program, according to the Education Department. About 1.3 million people are trying to have their debts discharged through the program.
Below are some frequently asked question with answers
What is the difference between PSLF and TEPSLF?
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PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying payments while working full-time for a qualifying employer. Only payments made under certain repayment plans (primarily income-driven repayment plans) qualify for PSLF.
TEPSLF forgives the remaining balance on your Direct Loans, but is available if you do not qualify for PSLF only because some or all of your payments were made under a repayment plan that did not qualify for PSLF and you meet other requirements. TEPSLF is a temporary program and will end once a certain amount of loan forgiveness has been granted.
What loans can be forgiven?
Only Direct Loan Program loans that are not in default are eligible for PSLF and TEPSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, or any other student loan program are not eligible for PSLF.
If you have FFEL Program or Perkins Loan Program loans, you may consolidate them into a Direct Consolidation Loan to take advantage of PSLF and TEPSLF. However, payments made on your FFEL Program or Perkins Loan Program loans before you consolidated them, even if they were made under a qualifying repayment plan, do not count as qualifying PSLF or TEPSLF payments. In addition, if you made qualifying payments on a Direct Loan and then consolidate it into a Direct Consolidation Loan, you must start over making qualifying payments on the new Direct Consolidation Loan.
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To find out which types of loans you have, log in to your “Aid Summary” using your username and password (FSA ID). https://studentaid.gov/aid-summary/loans
Limited PSLF Waiver
On Oct. 6, 2021, the U.S. Department of Education announced a temporary period during which borrowers may receive credit for payments that previously did not qualify for PSLF or TEPSLF. Learn how to take advantage of this opportunity.
Student Loan Payment Pause Due to COVID-19 Emergency
As part of the COVID-19 emergency relief, federal student loan payments were paused. Payments will restart after Jan. 31, 2022.
Suspended payments count toward PSLF and Temporary Expanded PSLF as long as you meet all other qualifications. You will receive credit as though you made on-time monthly payments in the correct amount while on a qualifying repayment plan. Note: In-grace, in-school, and certain deferment, forbearance, and bankruptcy statuses are not eligible for credit toward PSLF.
Note: In-grace, in-school, and certain deferment, forbearance, and bankruptcy statuses are not eligible for credit toward PSLF.