The Biden administration has quietly updated the process borrowers can use to apply for a key federal student loan forgiveness program geared toward people who work in public service careers. The change may ultimately make it easier for borrowers to request relief and reduce the chances that an application gets rejected.
Here’s what borrowers should know.
Student Loan Forgiveness For Borrowers Working In Public Service Jobs
Borrowers who commit to working in nonprofit or government jobs can qualify for Public Service Loan Forgiveness (PSLF), a program that provides complete federal student loan forgiveness in as little as 10 years (after 120 “qualifying” monthly payments). The PSLF program has historically had strict eligibility rules whereby only payments made on Direct-program federal student loans under specific repayment plans can qualify. Borrowers must be employed full-time for a qualifying public service organization (or part-time for multiple qualifying organizations), working at least 30 hours per week.
The Biden administration has recently established temporary initiatives to expand who can qualify for student loan forgiveness through PSLF. The Limited PSLF Waiver, enacted in 2021, relaxed some of the original PSLF rules and expanded what can count as a “qualifying payment” towards loan forgiveness. The waiver ended last fall, but the Education Department is still processing a backlog of applications, with nearly half a million borrowers approved for student loan forgiveness through early February.
Meanwhile, the Education Department is rolling out the IDR Account Adjustment, which extends many of the benefits of the Limited PSLF Waiver to the end of this year. The adjustment will allow many borrowers to receive retroactive credit toward student loan forgiveness under PSLF, including for many past periods of repayment, deferment, and forbearance, if the borrower was working in qualifying employment.
Student Loan Forgiveness Application Process For PSLF
In addition to meeting other eligibility criteria (including having Direct-program federal student loans), borrowers must complete and submit a PSLF Employment Certification form to request “credit” toward the 120 payments required to receive student loan forgiveness under the program.
Historically, the PSLF certification form has caused problems for borrowers, with forms being rejected for seemingly trivial technicalities such as an unchecked box or a misspelled name. The Education Department has been particularly finicky about signatures on the PSLF form. Signatures must either be a “wet” signature or a digital signatures that complies with specific requirements.
“Digital signatures from you or your employer must be hand-drawn (from a signature pad, mouse, finger, or by taking a picture of a signature drawn on a piece of paper that you then scan and embed on the signature line of the PSLF form) to be accepted,” says the Education Department in older published guidance. “Typed signatures, even if made to mimic a hand-drawn signature, or security certificate-based signatures are not accepted.” In addition, dates must be in “MM-DD-YYYY” format. A defect in the PSLF form’s signature or date could result in a delay or rejection.
Update To PSLF Process Will Allow For Electronic Signatures
The Education Department has tried to improve the PSLF application process in recent years by establishing the “PSLF Help Tool,” an online portal that borrowers can use to generate their PSLF form that ultimately must be signed and submitted. Using the PSLF Help Tool may streamline a borrower’s application process and reduce the chances that the certification form will be rejected. Last year, the department created the “Employer Search” tool to make it easier for borrowers to determine if their employer qualifies for PSLF.
Now, the department is attempting to streamline the application process even further by including an electronic signature option for employers.
“Current or past employees may be using the PSLF Help Tool, which provides digital signature and submission capabilities,” says the Education Department in new guidance for PSLF employers. “You, or an authorizing official at your organization, may receive an email from the Department of Education’s (ED) office of Federal Student Aid via DocuSign ([email protected]) requesting you certify employment and digitally sign the form. Once you review the employee’s form and certify it by applying your digital signature, the employee’s information will be captured for processing.”
To utilize the new digital signature feature, borrowers simply need to provide an email address for the individual certifying the PSLF form on behalf of their employer. The Education Department recommends notifying the employer of this process in advance and telling them to expect an email requesting a digital signature. Borrowers can also save their progress if they don’t have their employer’s email address, and then return to the PSLF Help Tool to input the email address. Employers must then sign the PSLF form within 60 days.
Borrowers will retain the option to obtain a manual signature on the PSLF form if they choose. However, this latest update may streamline the PSLF application process, reduce the chances of a form being rejected due to a technical error, and accelerate the ability of the Education Department to process student loan forgiveness requests and count PSLF payments.
Further Student Loan Forgiveness Reading
Biden’s Student Loan Forgiveness Plans And Payment Pause Face Multiple New Threats
453,000 Borrowers Approved For Student Loan Forgiveness Under Waiver As Processing Continues
What Happens If The Supreme Court Strikes Down Biden’s Student Loan Forgiveness Plan?
Potential Student Loan Forgiveness Loophole Could Cause Problems And Confusion For Consolidating Borrowers
Read the full article here
