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Student Loans

As part of the Federal government response to the COVID-19 pandemic, payments on most types of Federal loans are suspended through May 1, 2022. See Suspension of Loans during the Pandemic and Prepare to Resume Payments, below.

The Federal government announced a Limited Time Waiver that provides relief for borrowers whose employment did not count toward Public Service Loan Forgiveness for technical reasons, such as being in the wrong type of repayment plans, making payments on a loan type that didn’t qualify, or making a payment that was a couple of days late or off by a few pennies. You can get credit for those payments, but you may need to take certain actions by the October 31, 2022 deadline. See Limited Time Waiver, below, or get the info direct from the source at https://bit.ly/PSLFFactSheet and https://studentaid.gov/announcements-events/pslf-limited-waiver.

You can download a PDF file of the PowerPoint slides from this workshop.

The slides and this webpage are current as of November 15, 2021. They can help you make decisions about loan consolidation, choosing the best repayment plan for you, and healing a loan that is in default, as well as taking advantage of the Public Service Loan Forgiveness Limited Time Waiver and preparing for the end of suspension of payments during the pandemic.

General resources

These are your “go-to” sources for information about student loans. Use the search tools to find answers to your questions.

SUSPENSION OF LOANS DURING THE PANDEMIC

Suspended payments count as on-time payments for:

  • Reporting to credit reporting agencies. Check your credit reports at annualcreditreport.com to verify they have been reported correctly.
  • 120 payments toward Public Service Loan Forgiveness
  • 20/25 years of payments to complete income-driven repayment plans and forgiveness of the balance.
  • Curing a default.

What happens when suspension ends?

  • Your first payment will be due AFTER May 1, 2022.
  • Interest will begin to accumulate again.
  • Collections may begin.
  • Recertifications for income-driven loan payment calculations will be required.
Prepare to Resume Payments

StudentAid.gov suggests the following steps to prepare for payments to resume. Go to https://studentaid.gov/announcements-events/coronavirus for details and links.

  • Update your contact information in your profile on your loan servicer’s website and in your StudentAid.gov profile.
  • Check out https://studentaid.gov/loan-simulator/ to find a repayment plan that meets your needs and goals or to decide whether to consolidate.
  • Consider applying for an income-driven repayment (IDR) plan. An IDR plan can make your payments more affordable, depending on your income and family size.
  • Check whether you are (still) set up for auto-debit payments.
  • Contact your loan servicer to ask what your payment amount will be.
  • Watch for your billing statement or notice. You should receive it at least 21 days before the due date.

PUBLIC SERVICE LOAN FORGIVENESS – LIMITED TIME WAIVER

To qualify for Public Service Loan Forgiveness, you must make 120 payments. They do not have to be consecutive, but they must have been made after Oct. 1, 2007 when the program was first put in place. The forgiven amount is NOT taxable

For each payment to count, you must:

  • Have qualifying employment
  • Make the payment on a qualifying type of loan(s)
  • Make on-time payments
  • Be in a qualifying repayment plan

But under the new rules, you can get credit for prior payments that didn’t count for technical reasons, such being made while in a non-qualifying repayment plan or on a non-qualifying federal loan. According to https://studentaid.gov/announcements-events/pslf-limited-waiver:

…any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment.

This change will apply to student loan borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by Oct. 31, 2022. Parent Plus loans are not eligible under the limited PSLF waiver.

Here are examples of situations where you may get credit for past payments – provided you take any required action by the October 31, 2022 deadline:

  • You consolidated your loans and lost credit for previous payments that would have qualified for PSLF.
    • Apply for PSLF and certify employment by Oct. 31, 2022.
  • You made payments on a FFEL or Perkins loan while working in a qualifying job.
    • Consolidate by Oct. 31, 2022.
  • You made prior payments in Standard, Extended, or Graduated repayment program while working in a qualifying job.
    • Apply for PSLF and certify employment for payments prior to Oct. 31, 2022.
  • Under the new rules, you have made more than 120 qualifying payments.
    • You will receive a refund.
  • You have 120 payments under the new rules, but your current employer isn’t qualified.
    • Apply for forgiveness by Oct. 31, 2022.
  • You previously applied but were denied forgiveness.
    • Your application will automatically be reviewed.

You must still meet the requirements for qualifying employment. They are:

  • Working for a qualifying employer
    • Government – any level, entity
    • 501(c)3 nonprofit
    • Some other nonprofits
    • AmeriCorps and Peace Corps volunteer
    • Check the employer database using PSLF Help tool at https://studentaid.gov/pslf/.
  • Full time – at least 30 hrs/week
    • Part-time totaling 30 hrs with 2 qualifying employers will count
  • Employed with a qualifying employer:
    • At time of each payment
    • When apply for forgiveness
    • When the loan is forgiven
      • Waived if have 120 payments and apply by Oct. 31, 2022
Steps to take before October 31, 2022

ASAP: Verify/update contact info with Dept. of Education

By October 31, 2022

  • Consolidate Federal loans that are not Direct loans (i.e., FFEL, Perkins – not Parent Plus).
  • If not already done, use the PSLF Help tool at https://studentaid.gov/pslf/ to:
    • Certify all qualifying employment
    • Submit a PSLF form
  • Apply for forgiveness if 120 payments but current employer not qualified.
  • Switch to a qualifying repayment plan – meaning, an income-driven plan. The official information from the Department of Education is not clear on this, but this is the position taken by Ryan Frailich writing on kitces.com

WHAT TYPES OF LOANS DO I HAVE

  • All of your Federal loans – except for PLUS loans in the parent’s name – will be listed in your account at StudentAid.gov/login.
    • Enter your username and password and select LOG IN if you already have an FSA ID. If you do not have an FSA ID, select the Create An FSA ID tab.
    • Go to StudentAid.gov/aid-summary/. Scroll down to the Loan Breakdown section. For each loan, you will see the type of loan, the amount, the date of the loan, how much money you received, how much of that amount is still owed, and any unpaid (outstanding) interest. Click on the # by each loan to see additional details, including the name and contact information for your loan servicer and lender, and the current and previous statuses of your loan
  • If additional loans appear on your credit report, those will be private loans. Check your report from all three major credit reporting agencies at annualcreditreport.com/
Private Loans
Perkins Loans

COMPARING REPAYMENT PLANS

  • For an overview of the various repayment plans, scroll down to the chart at https://studentaid.ed.gov/sa/repay-loans/understand/plans
  • Use the Repayment Estimator to compare the monthly payments & interest you will pay for each plan at https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action.
    • Log in with your FSA info to use actual loan info or click Proceed to enter loan info manually or use national averages.
    • Click each loan to see the plans for which it qualifies. Switch the loan type to “Consolidated” to see if that gives you more options.
    • This page is designed for borrowers who have not yet made payments on their loans. If you are already making payments on your loans, your loan servicer should be able to give you more correct, current information about your options.

Thee two decision trees may help you get an idea of what repayment plan fits your situation. The first one looks at balance driven plans versus income-driven plans as a group. The second one helps you figure out which income-driven plan(s) you might be eligible for.

Loan Consolidation
Deferment and Forbearance
Difficulty making loan payments
Loan forgiveness, discharge, and cancellation
Getting Out of Default
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