AFSCME Student Loan Alert

The Department of Education has announced an opportunity for federal student loan borrowers who enrolled in the wrong IBR payment plan to be reconsidered for PSLF.  It has established guidelines for the $350 million given for this purpose in the appropriations bill. This money is available on a first come first serve basis. See press release below for additional information.

FOR IMMEDIATE RELEASE
May 23, 2018
Contact: Press Office
(202) 401-1576 or [email protected]

U.S. Department of Education Announces Opportunity for Federal Student Loan Borrowers to be Reconsidered for Public Service Loan Forgiveness

WASHINGTON—The U.S. Department of Education (Department) has launched a process for federal student loan borrowers to be reconsidered for loan forgiveness under a temporary expansion of the Public Service Loan Forgiveness (PSLF) Program.

This limited opportunity—which the Department is referring to as Temporary Expanded PSLF (TEPSLF)—was made possible by a $350-million appropriation through the Consolidated Appropriations Act, 2018. The law provides additional conditions under which borrowers may become eligible for loan forgiveness if some or all of their payments made on William D. Ford Federal Direct Loan (Direct Loan) Program loans were made on a nonqualifying repayment plan for the PSLF Program. This opportunity is only available on a first-come, first-served basis until the $350 million has been allocated or other criteria are met.

The Department will reconsider eligibility for the TEPSLF opportunity using an expanded list of qualifying repayment plans, which includes the Graduated Repayment Plan, Extended Repayment Plan, Consolidated Standard Repayment Plan, and Consolidated Graduated Repayment Plan. Funds for this opportunity are limited, and borrowers will be considered on a first come, first serve basis. Once funds under this opportunity are depleted or other criteria are met, the program will end.

In order to qualify for the TEPSLF opportunity, a borrower must have done the following:

  • Submitted the Public Service Loan Forgiveness: Application for Forgiveness and had that application denied because some or all of the payments were not made under a qualifying repayment plan for PSLF
  • Worked at least 10 years of full-time employment with a qualifying employer, certified by the employer, and approved by the Department
  • Made 120 qualifying monthly payments under the new requirements for the TEPSLF opportunity while working full-time for a qualifying employer or employers

Borrowers who believe they may qualify for the TEPSLF opportunity should email a request for reconsideration to [email protected].

To learn more about this opportunity and how to apply, visit StudentAid.gov/tepslf.

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Public Service Loan Forgiveness Qualifications

The Public Service Loan Forgiveness (PSLF) program was established in 2007. The program was designed to forgive the remaining balance of Direct Loans after the borrower made 120 qualifying monthly payments under a qualifying repayment plan while working full-time, for a qualifying employer. Forgiveness for those who enrolled in the program at its inception was to begin in 2017. However, many of these borrowers have recently learned that they were not enrolled in eligible repayment plans and therefore do not qualify for forgiveness. The following link to a New York Times article describes some of the problems borrowers are experiencing:

Under the PSLF, only loan payments made through one of the following four income-driven repayment plans are credited towards the required 120 payments:

  1. Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  2. Pay As You Earn Repayment Plan (PAYE Plan)
  3. Income-Based Repayment Plan (IBR Plan)
  4. Income-Contingent Repayment Plan (ICR Plan) 

A few weeks ago, a provision was included in the massive omnibus funding package (Consolidated Appropriations Act, 2018) to help individuals who erroneously believed they were enrolled in PSLF. AFSCME worked closely with Senators Chuck Schumer (D-NY) and Elizabeth Warren (D-MA) who led the effort to help these borrowers. The bill includes $350 million for the Department of Education to forgive student debts of borrowers who meet the requirements of the PSLF, except for their failure to enroll in an income-driven repayment plan. Although $350 million seems like a lot of money, these funds will be distributed on a first-come first-serve basis and could run out quickly. The Department of Education is currently assessing the law and is expected to explain the new loan forgiveness conditions and how it will administer the fix by late May.

In the meantime, AFSCME members who have enrolled in PSFL should verify that they are satisfying all of the following program requirements:

Qualified Loan:

Only Federal Direct Loans are eligible for PSLF. However, borrowers who prior to July 1, 2010 received loans under other federal student loan programs, such as the Federal Family Education Loan (FFEL) program or the Federal Perkins Loan program may eligible for PSLF if they are consolidated into a Direct Consolidation Loan.

Qualified Employment:

Full-time (usually 30 hours per week) employment with the following types of organizations qualify for PSLF: 1) Government organizations at any level (federal, state, local, or tribal); 2) Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code; 3) Other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services; and AmeriCorps and Peace Corps. Employment with labor or partisan political organizations do not qualify for PSLF.

Borrowers must recertify their employment annually by completing and submitting the Employment Certification for PSLF form annually, or when they change employers. Upon receipt the Department will review and advise the borrower whether their loans and employment qualify. The form is available on the Department of Education website: https://studentaid.ed.gov/sa/sites/default/files/public-service-employme...

Qualified Repayment Plan:

Qualified repayment plans are limited to the four income-driven repayment plans listed above.
Qualified Monthly Payments: Payments qualify under PSLF if they are made: 1) after October 1, 2007; 2) under a qualifying repayment plan; 3) for the full amount due as shown on your bill; 4) no later than 15 days after your due date and 5) while the borrower is employed full-time by a qualifying employer. Payments do not need to be consecutive. If you have missed a payment, the next on-time payment you make will enable you to pick up where you left off. If you have missed a payment, you must make up that payment and any late charges. Once you are caught up on all missed payments, your future on-time payments count towards PSLF again.

Members can confirm the number of qualifying payments they have made by logging in to their account at: https://myfedloan.org/

Please share this information with participants of the AFSCME Student Debt Clinic. If you have questions
you may submit them to: StudentDebt[email protected].