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Washington, D.C.

  • Kevin Mahoney, CFP®

Can I Depend on the PSLF Program?

The Program Promises to Forgive Your Loans After Enough Qualifying Payments, But It's Rarely That Simple

About the author: Kevin Mahoney, CFP® is a fee-only financial advisor in Washington, D.C. Kevin's work with his clients focuses on paying off student loans, buying a house, investing savings, and budgeting. Kevin is the founder & CEO of Illumint, a virtual financial planning firm specifically designed to help couples and young families with their financial decisions.

According to the Consumer Financial Protection Bureau, the Public Service Loan Forgiveness (PSLF) program “forgives the remaining balance on your federal Direct Loans after you make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying public service employer.”

Specifically, the agency writes, “This program helps you manage your student loan debt while pursuing a career in public service. Public Service Loan Forgiveness (PSLF) is available to many employees working in public service, including all levels of government, states and municipalities, school districts, public hospitals, non-profit organizations, and more.”

Problems With the Public Service Loan Forgiveness Program

In a thorough review of the program -- particularly its problems -- Danielle Douglas-Gabriel wrote:

“Lawmakers created [PSLF] in 2007 during President George W. Bush's administration to entice college graduates to go into teaching, law enforcement and other public service jobs. To qualify, borrowers must make 120 on-time monthly payments for 10 years to have the remaining balance canceled. They must work for the government or certain nonprofits. They must have loans made directly by the federal government. And they must be enrolled in specific repayment plans, primarily those that cap monthly loan payments to a percentage of their income.

The rules are complex. And missteps can be devastating for people who plan their lives and careers around the promise of tax-free loan forgiveness. Enough public servants complained of receiving bad advice from loan servicers that Congress created a temporary fix [in 2018] so payments made in the wrong plan could be credited toward forgiveness.”

Congress's Attempts to Fix The PSLF Program

New York Times columnist Ron Lieber, who has doggedly investigated the problems with loan servicers and student loan forgiveness programs, has reported that Congress’s attempts at additional relief haven’t fared well:

“It has been nearly five months since the Department of Education released instructions for a $350 million pot of money that some public servants can use if they received bad information about the loan forgiveness program and ended up in the wrong type of repayment plan.

Tens of thousands of people have applied for the relief program. But so far, most have been rejected, and as of late last month, none among the few thousand who remain in the running have seen their debt balances go to zero.

… It can take up to six months or so to review these requests because of the complexity of both the forgiveness program and the relief fund application process. The Department of Education has shifted some staff to work more closely with the loan servicer that handles the forgiveness program.”

Six months later, Lieber turned his attention to loan servicers, writing:

“The law is indeed complicated. That makes FedLoan’s job difficult, particularly as more people qualify — or want to find out if they do — for a highly popular program. And because of the many moving parts, borrowers may discover that they have misunderstood the rules, or that the servicer has miscounted their payments.

One big problem, Ms. Hill said, is that borrowers often need their previous servicer to transfer payment records to FedLoan. If it’s not in a format FedLoan’s software can read, that creates delays. FedLoan has hired a consulting firm to make the process more efficient, Ms. Hill said.”


On its website, the UC Berkeley School of Law offers some tips that hopefully will “make applying for and obtaining loan forgiveness under PSLF easier,” including:

  • “Submit the PSLF Employment Certification Form annually, and at a minimum, every time you leave a job. If your loan servicer is not FedLoan Servicing, the first time you submit the form, it will trigger a transfer of your loans to FedLoan Servicing. At this time, the transfer typically takes 1-2 months, during which you will not be able to make payments on your loans (and therefore may lose out on 1-2 months of eligible payments toward the 120 you need).

  • Download and save a loan payment history every 6-12 months, and before you submit your first Employment Certification Form, as FedLoans may not transfer over your payment history data.

  • Consider keeping a separate bank account for your loan payments to make it easier to track your payments, LRAP funds, and out-of-pocket imputed contributions.

  • Regularly track how many months you’ve built up toward the 120 needed. If you notice discrepancies between what you believe and what your loan servicer says, contact them ASAP.

  • Generally, make sure to document everything. Keep a history of communications with your loan servicer, income-driven repayment plan approval letters and payment schedules, Employer Certification Forms and approval letters, and payment histories.”

As Ron Lieber concludes in one of his columns, pursuing student loan forgiveness isn’t easy, and requires strong organizational skills, constant vigilance, and a little luck:

“So I expect that this problem will be with us for a long time. If you’re one of the people doing good work in the world and counting on the program, don’t just trust what you’re told. Print everything. Ask for written verification. And cross your fingers the next time you call for help, and hope the very people who are supposed to be looking out for you won’t tell you to come back in a year.”