A major milestone for those seeking federal student loan relief is quickly approaching: In October 2017, the first wave of borrowers who enrolled in the government's Public Service Loan Forgiveness program (PSLF) could start seeing their balances forgiven. In advance of the big date, the formal application for forgiveness has finally gone live on the Federal Student Aid website.
Prior to the application becoming available, there was little way to know for sure if borrowers would actually have their debt forgiven. Those who worked in public service could fill out an employment certification form to see if their employer met the criteria, but it wasn't mandatory to file. And with the wave of recent controversy surrounding the program, consumer advocates and hopeful borrowers will be watching closely next month to see how many people actually end up with a zero balance.
PSLF was introduced in 2007 as a way to relieve student loan debt for those who chose qualifying public service jobs with the government or nonprofits, and who made 10 years' worth of monthly payments. As such, 2017 marks the first year anyone would have made enough payments to qualify for forgiveness.
But many borrowers who thought their jobs qualified for PSLF were later told by their loan servicer that they weren't. On top of that, borrowers have had to put up with numerous errors and complex rules when it comes to loan forgiveness, according to a report by a federal watchdog group, and a proposed White House budget would cut PSLF altogether. All these factors have created a perfect storm of confusion around whether the program will make good on its promises.
But for now, you can still apply, and if you think you qualify for the program, here are a few things to double check before you fill out the application.
See what kinds of loans you actually carry. Only Direct Loans qualify for forgiveness.
Make sure you've made 120 qualifying payments. The payments do not have to be consecutive, but they need to have been made while you were working for a qualifying employer. Also, your payments are only considered qualified if you made them under a standard or income-driven repayment plan.
Remember that your employer has to fill out part of the application. There is a section in the application that must be signed by an authorized official, so figure out in advance who that person could be. If you're not eligible yet to apply for forgiveness but you expect to be in the next few years, then it's worth filling out and updating the employment certification form ahead of time.