If you are employed full-time by a government or not-for-profit organization, you may be able to receive loan forgiveness after making 120 qualifying payments (10 years), thanks to the Public Service Loan Forgiveness (PSLF) Program.
But loan forgiveness is not automatic. There are a number of specific requirements you must meet. If you want to make sure you’re on the right track, avoid these common mistakes:
1. Not submitting an Employment Certification Form each year
Submitting an Employment Certification Form (ECF) is the single most important thing you can do to make sure you’re on track for forgiveness. You should submit this ASAP.
In order to ensure you’re on the right track for forgiveness, it is important that you submit an Employment Certification Form (ECF)
as soon as you start your first public service job,
annually from that point on, and
any time you switch employers.
We use this is form to help verify you’re on the right track and to inform you about anything you should do to adjust to maximize the amount forgiven in the future.
Since borrowers who are interested in PSLF should be on income-driven repayment plans, we recommend submitting your annual ECF at the same time you recertify your income-based payments.
2. Making mistakes on your Employment Certification Form
Your ECF could be rejected if you make mistakes. Here are some common mistakes we see:
Missing information: Two of the most common missing items are the employer’s address and Employer Identification Number (EIN). You can find your employer’s EIN on your Wage and Tax Statement (W-2). Don’t submit your ECF without all the required fields filled in.
Inconsistent information: This occurs when you provide information on a new ECF that is inconsistent with info from a previous ECF. Most commonly, we see inconsistent employment begin dates.
Correction errors: If corrections are made on the form, initials must be provided next to the change.
If you’re correcting the borrower sections (Section 1 or 2), we need your initials.
If you’re correcting the employer sections (Section 3 or 4), we need the employer’s initials.
Tip: The ECF requires a signature from an “authorized official” at your employer. This is typically someone in your human resources office. Ask your employer who your organization has authorized to certify employment if you’re uncertain.
3. Not consolidating your FFEL, Perkins, and parent PLUS loans
There are different types of federal student loans, but only Direct Loans qualify for PSLF.
If you borrowed before 2011, or if you have Perkins or parent PLUS loans, you may need to consolidate your loans in order to qualify for PSLF.
To check which types of loans you have, log in to StudentAid.gov/login. If you see a loan type that doesn’t include the word “Direct,” you’ll need to consolidate it to get PSLF for that loan.
To fill out the consolidation application, go to StudentLoans.gov.
4. Not enrolling in an income-driven repayment plan.
You can get PSLF only if you enroll in and make payments under one of the income-driven repayment plans. While payments made under the 10-Year Standard Repayment Plan also qualify for PSLF, you will have fully paid off your loan within 10 years (i.e., before you can qualify for forgiveness) if you pay under that plan. Therefore, an income-driven plan is your best option. Not only will it help you qualify for PSLF, but most people enrolled in income-driven repayment plans see a reduction in their monthly payment amount—win-win! You can apply for an income-driven repayment plan on StudentLoans.gov.
Temporary Expanded Public Service Loan Forgiveness: You may have a second chance to get Public Service Loan Forgiveness (PSLF) if your application was denied because you were on the wrong repayment plan. With the passage of the Consolidated Appropriations Act, 2018, Congress set aside a $350 million fund to offer PSLF to borrowers who were denied for being on the wrong student loan repayment plan. This is a one-time-only expansion that will only be available until the funds run out, so it’s important to take action early. For complete eligibility requirement and to learn how to apply, visit StudentAid.gov/tepslf.
5. Missing your income-driven repayment recertification date
In order to remain eligible for income-driven payments, you must recertify each year. If you don’t, your payment will likely go up—possibly significantly. Recertify every year at the same time on StudentLoans.gov. This is a good time to submit an updated ECF too.
6. Staying on a deferment or forbearance
When you are in deferment or forbearance, you don’t get credit toward the 120 payments you need to qualify for PSLF. Every month you stay on deferment or forbearance, you’re pushing back your forgiveness date. Here are some tips to help you avoid this mistake:
If you want PSLF, you should be on an income-driven repayment plan. Your payment amount under these plans should be affordable because it is calculated based on your income. If it’s not affordable, and especially if you are on the Income-Based Repayment Plan, contact your servicer to see if you qualify for a different income-driven plan that will lower your monthly payment even further. Or, if you’ve had a drop in income since you last had your payment calculated, you can recertify your current income-driven repayment plan early.
You can waive periods of deferment—for example, if you’re working full-time for a qualifying employer while in graduate school, you could consider waiving any in-school deferment that is applied to your loans so you can start making qualifying payments. Contact your servicer to waive a deferment.
7. Missing payments
You shouldn’t miss loan payments, but it’s especially important if you’re working toward PSLF. Your payment won’t qualify if it’s more than 15 days late.
8. Not being strategic with early or extra payments
You cannot receive forgiveness any sooner than 10 years—even if you pay early or extra every month. For PSLF, you must make 120 separate monthly payments—and you can receive credit for only one payment per month, no matter how much you pay. If you consistently pay more than you have to, it will reduce the amount forgiven once you reach the 120 payments necessary.
However, one instance where we’ve seen borrowers interested in making additional payments while working toward PSLF is when they receive an employer-provided student loan repayment benefit. If your employer does provide these benefits and you’re working toward PSLF, consider inquiring whether the payment can be broken out monthly, as opposed to being paid as a lump sum. That way, it covers multiple scheduled monthly payments and not just one.
The easiest way to avoid these mistakes is to submit your ECF early and often and to keep in touch with FedLoan Servicing, our PSLF servicer. They are available to help you every step of the way.
BONUS: Answers to some PSLF FAQs:
Private loans do not qualify for PSLF.
Qualifying employment is about who your employer is, not the job you do for your employer. For example, if you are a government contractor, but your employer is a for-profit company, your employment would not qualify.
Payments don’t have to be consecutive—you can leave public service and come back and still qualify without starting over.
Any amount forgiven under the PSLF program is not taxable.
You can calculate your projected forgiveness amount using our repayment calculator.
Nicole Callahan is a Digital Engagement Strategist at the U.S. Department of Education’s office of Federal Student Aid.