Be aware, many people don’t get their debt forgiven because of seemingly minor errors in their paperwork.
If you work for the government, a nonprofit, or other public service organization full-time, you qualify for public service loan forgiveness. This means that you make 120 payments, 10 years worth of payments, on an income-based plan. After making those 120 qualified payments- you now QUALIFY for public service loan forgiveness. Congratulations!
But, you’re journey to student loan forgiveness is not over just yet. Before achieving forgiveness, you must apply for public service loan forgiveness.
We'll breakdown 9 of the most common pitfalls that people commit.
1. Thinking Public Service Loan Forgiveness is automatic and not filing 2 pieces of paper annually.
You must file the employment certification form and file it into the income-driven plan.
2. Not submitting your 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 you must submit ECF.
We recommend you submit this form when you recertify your income-driven plan. Either way, know when your paperwork is due-mark your calendar. You will automatically get this date on your "My Loans" dashboard on the LoanSense application, and you won't need to mark your calendar.
3. 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). Fill this information out exactly as it appears on your W-2. Don’t submit your ECF without all the required fields filled in.
Inconsistent information: Retain your offer letter and fill in the same start date on every single recertification form. Inconsistencies on your start date will lead to an error or rejection.
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) you'll need to initial.
If you’re correcting the employer sections (Section 3 or 4), your employer representative’s initials are required.
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.
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. LoanSense will let you know which plan is considered an income-driven plan.
DO NOT enroll in an extended graduated plan or a graduate plan. This is NOT an income-driven plan and will NOT qualify you for forgiveness.
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 if you don’t file into an income-driven plan.
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! We’ve helped people’s payments go from $311 to $39 or $1800 to $600!
You can apply for an income-driven repayment plan on StudentLoans.gov or you can let LoanSense manage all aspects of identifying the plan, enrollment steps, filing paperwork, and reminders.
5. Not consolidating your FFEL, Perkins, and Parent PLUS loans
Basically, if you did not borrow direct loans while you were in school (literally-they do not have the word direct in front of the loan type), you will need to consolidate your loans, because other types of loans do not qualify for income-based repayment.
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.
LoanSense will automatically recommend actions on the filing steps page to manage nondirect loans to avoid this pitfall.
6. Missing your income-driven repayment recertification date
In order to remain eligible for income-driven payments, you must re-certify each year. If you don’t, your payment will likely go up—possibly significantly. Re-certify every year at the same time on StudentLoans.gov. This is a good time to submit an updated ECF too.
Warning: If you don't re-certify in time, your interest will accrue and your loan payment will increase.
LoanSense will remind you of these dates and help you fill out your paperwork, and make sure your payments are getting counted toward loan forgiveness.
7. Staying on 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 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.
8. 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.
Also, you must make full-payments. Do NOT split them up or they will not count!
9. 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 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.
I know it makes zero sense, but DO NOT pay extra. It just means you are giving extra money to the government. If you receive payment help from your employer, family, etc. ask to make the payments in lieu of your regular payment and not any extra!
LoanSense will identify the right plan to file into, give you direct filing instructions for your personal situations, remind you to file again ON-TIME and keep track of your payments to make sure your servicer counts all your payments, so you get forgiveness in 120 payments, not MORE!
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