Public Service Loan Forgiveness Has Changed. What Does This Mean For You?

On October 6, 2021, President Biden and the U.S. Department of Education announced major updates to the Public Service Loan Forgiveness (PSLF) program. These changes aim to make it easier for borrowers to receive full federal student loan forgiveness.

PSLF forgives federal student loan debt, including both principal and interest, after 120 qualifying payments while working full-time for a public service employer or a 501(c)(3) non-profit. Eligible workers include public school teachers, firefighters, police officers, and more.

Since PSLF began in 2007, only 2% of applicants have received forgiveness. Confusing rules about “qualifying payments,” unclear annual recertifications, and inconsistent support from loan servicers contributed to this low success rate. The 2021 changes aim to address these issues.

How Past Payments Now Count Towards PSLF

Previously, borrowers with FFEL or Perkins loans often could not count past payments toward PSLF.

• FFEL loans issued before 2010 by private lenders did not qualify.

• Perkins loans disbursed before June 30, 2018, also did not count.

To receive credit, borrowers had to consolidate these loans into Direct Loans, which reset qualifying payments to zero. Many borrowers unknowingly paid for years without advancing toward forgiveness.

The new updates allow prior payments on these loan types, even under the wrong repayment plan, to count toward PSLF if the borrower was working for a qualifying employer. Over 550,000 borrowers are expected to benefit, averaging 23 payments closer to forgiveness.

Important: Borrowers still need to move loans to Direct Loans and enroll in an Income-Driven Repayment (IDR) plan before the waiver deadline of October 31, 2022.

If you are not or are unsure if you are on the right track, you must reach out to reputable student loan experts, as this could mean years of difference between getting your loans paid off.

Military Service Members

Active-duty military members often defer loan payments due to service commitments.

• Previously, deferred payments did not count toward PSLF.

• Under the new changes, eligible service members will now receive credit for periods of deferment or forbearance.

Previously Denied Applicants

With past payments now counting, previously denied applications may be reviewed and reconsidered.

• The changes follow FedLoan/PHEAA’s exit as the PSLF servicer.

• Many borrowers reporting discrepancies in payment counts may now see immediate forgiveness after review.

If you have always had Direct Loans and have been on an IDR plan, these changes do not affect your progress.

• Ensure your IDR recertifications are submitted on time.

• Maintain full-time employment with a qualified employer.

• Submit employment certification accurately.

What Should I Do?

To take advantage of the 2021 PSLF changes:

1. Check your loan type – Convert FFEL or Perkins loans to Direct Loans if needed.

2. Enroll in an IDR plan – Confirm you are on a qualifying repayment plan.

3. Recertify annually – Avoid missing a year, which could invalidate payments.

4. Verify employer eligibility – Only full-time work with qualifying employers counts.

5. Consult a student loan specialist – Each borrower’s situation is unique, and professional guidance can prevent lost payments.

The 2021 Public Service Loan Forgiveness changes make it easier for borrowers to count past payments and simplify forgiveness for public service workers. Acting before the waiver deadline and staying on the correct repayment plan is critical to maximize benefits.