Many allied health professionals choose this route to help pay off student loan debt. Student loan debt is one of the heaviest, if not the heaviest portion of our debt as allied health professionals. I have even partnered with StudentLoanAdvice.com, a company that can help you manage your student loans, and I know is a topic that weighs heavily on allied health professionals’ minds. So today, I’m going to briefly go over the new changes to the Public Service Loan Forgiveness (PSLF) Program.

The PSLF Program “forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.”¹

Key word here is qualifying. I mean, they say it THREE times in the sentence.

But this is important, because most allied health professionals will go and work for a non-profit hospital or government position for years, only to find out that they don’t qualify for the PSLF program. Currently, only 5,500 people have actually managed to do it successfully – which means over 95% of people who applied for PSLF did not qualify and were not able to have their loans forgiven!² That’s because up until recently, the qualifications have been crazy specific, and it can get confusing to make sure you meet every. Single. Qualification.

So in general, the three biggest qualifications include:

1. A Federal William D. Ford Direct Loan
2. Enrolled in an Income-Driven Repayment (IDR) plan
3. Make 120 payments under the aforementioned IDR plan²

So these were incredibly specific qualifications. HOWEVER, looks like these qualifications are changing under the Biden administration. As of October 6, 2021, the U.S. Department of Education (ED) announced that for a limited time, due to the COVID-19 pandemic, borrowers may receive credit for past payments made on loans that would otherwise not qualify for PSLF.³

However, in order to benefit from this change, not only must you have full-time employment, but your student loans either need to be a Direct Loan, or have been consolidated into the Direct Loan Program, or consolidated into the Direct Loan Program by Oct. 31, 2022.

Let’s go over these new requirements in more detail, as outlined by the Federal Student Aid website:

1. Full-time employment.
   “You must have worked full-time for a qualifying employer when prior payments were made.”³ If you work(ed) a couple of qualifying part time jobs, for at minimum 30 hours a week, this will also count as full-time in this regard. Since the PSLF program began in October 2007, you can only receive credit for payments made after this date. It is required that you fill out a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF form) for any time period in which you are looking to receive additional qualifying payments.
2. Loan consolidation.
   Look into what federal student loans you currently have. If you have: “Federal Family Education Loan (FFEL) Program loans, Federal Perkins Loans, or other types of federal student loans that are not Direct Loans,”³ you absolutely NEED to consolidate those loans into the Direct Loan program no later than Oct. 31, 2022.

The difference between the past requirements and the current requirements are that you don’t have to be enrolled in the IDR plan – past payments under any payment plan count! And previously you needed to have 120 qualifying payments, now any past ineligible loan payments can count toward those 120 total payments.

What did NOT change was the type of employment: you still need to be employed by the government or a qualifying non-profit organization. You also still need to work full-time. And your loans need to be consolidated into a Direct Loan.

But remember, this is TEMPORARY. If you have student loans, you need to jump on this ASAP. Because before you know it, the year will go by, and you will want to make sure that you can take advantage of this before time runs out.

(wow, I used the word “qualifying” a whopping 9 times in this post… I guess 10, if you count me just using it in this sentence)

References:

1. Public Service Loan Forgiveness (PSLF). https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service
2. It Just Got Easier To Have Your Student Loans Forgiven, from Millennial Revolution. https://www.millennial-revolution.com/build/it-just-got-easier-to-have-your-student-loans-forgiven/?utm_source=rss&utm_medium=rss&utm_campaign=it-just-got-easier-to-have-your-student-loans-forgiven
3. Public Service Loan Forgiveness Limited Waiver Opportunity. https://studentaid.gov/announcements-events/pslf-limited-waiver

Note: I am not a certified financial advisor/planner or a certified financial analyst or a CPA or an accountant or a lawyer. Remember, I am an allied health professional, just like you!

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