If you’re one of the 62% of college students that graduate with some form of student loan debt, you are likely investigating the many different options that exist for repayment. One popular repayment option is Public Service Loan Forgiveness (PSLF). 

PSLF was introduced in October 2007. It allows borrowers who make 10 years of qualifying payments (120 total payments) and work for an employer in the public service sector to have their loans completely forgiven.

The first eligible borrowers for PSLF would have completed their 10 years of payments in October 2017. But the most recent statistics released by the Department of Education in April 2021 show that just 5.5% of PSLF applicants have been approved. In this article, we’re going to look at the biggest PSLF errors that cause rejections and how you can avoid them.

If you’ve been denied from PSLF and are looking for the best repayment strategy, consider checking out Chipper. Chipper is a service that can help you analyze the different repayment and loan forgiveness options and determine which one might be right for you.

What Is Public Service Loan Forgiveness (PSLF)?

As previously noted, Public Service Loan Forgiveness is a program that was first introduced back in 2007. It allows graduates who make 120 qualifying payments and work for a qualifying employer to have their loans completely forgiven.

The Public Service Loan Forgiveness program is only an option for borrowers who have Direct Loans or who consolidate other federal loans into a Direct Loan. You must also be on an income-driven repayment plan, such as Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income Contingent Repayment (ICR) or Income-Based Repayment (IBR).

If you’ve made payments on a non-qualifying repayment while working for a qualifying employer, you may eligible to apply for Temporary Expanded Public Service Loan Forgiveness (TEPSLF). Of the 5.5% of applicants who were approved for PSLF forgiveness in April 2021, 3.4% qualified through TEPSLF.

How To Qualify For PSLF

Even if you’re eligible for PSLF based on the type of loans that you have and the type of repayment plan you are on, you must also work for a qualifying employer. The following types of jobs and employers qualify for Public Service Loan Forgiveness:

  • Government organizations at any level (U.S. federal, state, local, or tribal)
  • Not-for-profit organizations that are tax-exempt under Section 501(c)(3) 
  • Not-for-profit organizations that are NOT tax-exempt under Section 501(c)(3) but provide certain types of qualifying public services.
  • The Peace Corps
  • AmeriCorps

See Also: What Jobs and Employers Qualify for PSLF?

It’s important to understand that it’s your actual employer whose occupation is relevant for the purposes of qualification under PSLF. For example, if you’re a government contractor, that is not the same as being employed by a governmental organization.

The Biggest PSLF Errors That Cause Loan Forgiveness Denial

The US Department of Education has called out eight common PSFL errors that can cause denial. Here’s the list:

  • Failing to submit your Employment Certification Form (ECF) each year
  • Making mistakes on your ECF
  • Not consolidating your ineligible loans
  • Not being in an income-driven repayment (IDR) plan
  • Missing your annual IDR recertification deadline
  • Staying on a deferment or forbearance
  • Missing payments
  • Making extra payments

The #1 way to avoid these PSLF errors that cause denial is by remembering to fill out your Employment Certification Form (ECF) each year. Rather than make 10 years of payments only to find out that you aren’t eligible for PSLF, filling out your ECF every year is a way to make sure that all of the kinks are worked out up front.

How To Avoid These PSLF Errors

Filling out the ECF isn’t the only step you can take to steer clear of PSLF problem. Here are a few more suggestions for how to avoid PSLF errors. 

  • Make sure your ECF isn’t missing any Information. The Department of Education mentions that two of the most common pieces of missing information are the employer’s address and Employer Identification Number (EIN).
  • Keep your information consistent each year. ED mentions specifically that they often see inconsistent employment beginning dates. If you have any other type of loans besides Direct Loans, you’ll need to consolidate your loans before applying for PSLF.
  • Consolidate ineligible loans. If you have Parent PLUS, FFEL, or Perkins Loans, you’ll need to consolidate them into a Direct Consolidation Loan before applying.
  • Join an income-driven repayment plan. If you’re currently on the Standard, Graduated, or Extended, repayment plans, you’ll want to switch to an IDR plan to maximize your forgiveness potential.
  • Waive your deferment. If you’re working for a qualifying employer while still in graduate school, you may want to contact your servicer to waive your deferment in order to start your 120 months of qualifying payments as soon as possible.
  • Don’t make late payments. Of course you shouldn’t be making late payments in general. But this is especially important when pursuing PSLF as any payments made more than 15 days late won’t count as qualifying payments.

Most of these ways to avoid PSLF errors can be adroitly summed up by saying “Look at all the mistakes we just mentioned. Now don’t do any of them!”

Final Thoughts

If you still have questions about whether PSLF fits your specific situation, check out Chipper and let it help you analyze the different repayment and loan forgiveness options to determine which one might be right for you.

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