![]() Previously, PSLF required that borrowers be considered “full time” by their employer, in addition to the 30 hour-per-week mandate. The new PSLF regulations relax some rules regarding qualifying employment that should allow more borrowers to qualify for student loan forgiveness.įirst, the new regulations simplify the definition of qualifying employment to be an average of 30 hours per week or more. Expanded Employment Criteria For Student Loan Forgiveness Under PSLF The buyback process is not yet available, but should be later this summer, according to the department. And deferment and forbearance periods prior to loan consolidation are ineligible under the rule. Some periods, such as in-school deferment periods, cannot be bought back. There are some important limitations to this new feature. “To do so you must make an extra payment of at least as much as what you would have made under an income-driven repayment (IDR) plan that you were eligible for each month that you were in a deferment or forbearance and also had qualifying employment.” Borrowers would need to supply their tax return or other income documentation covering the period in question. “If you have a single month (or multiple months) in your payment history that do not count as a qualifying payment because you were in a deferment or forbearance status other than those that are considered an eligible payment equivalent, you can buyback that month to make it a qualifying payment,” says the updated Education Department guidance. One of the more transformative new PSLF rules will allow borrowers to “buy back” certain past non-qualifying deferment and forbearance periods so that they can count toward loan forgiveness. Borrowers Can Buy Back Time Toward Student Loan Forgiveness Some borrowers lose a month or two every year to these forbearances, which can have disastrous cumulative impacts. Historically, these involuntary forbearances have been implemented for borrowers as they apply for, or renew, income-driven repayment plans. The administrative forbearance feature is a particularly important change. Military service and post-active-duty deferment, as well as National Guard Duty and Department of Defense forbearance.The following deferment and forbearance periods can count toward loan forgiveness under the new regulations: Similarly to the treatment of loan consolidation, the new PSLF rules represent a middle ground approach between the original rules and the temporary waiver initiatives. The Limited PSLF Waiver and IDR Account Adjustment relaxed some of these rules, allowing many (although not all) such periods to be credited. Historically, periods of deferment and forbearance don’t count toward the 10 years required to receive student loan forgiveness through PSLF, even if borrowers were working in qualifying employment. More Deferment And Forbearance Periods Can Count Toward Student Loan Forgiveness Under PSLF This is not as generous as the treatment of consolidations under the Limited PSLF Waiver and IDR Account Adjustment, but represents a substantial improvement over the earlier PSLF rules. “If you consolidate your loans, the qualifying payments made on the Direct Loans (other loan types will not be considered) included in your consolidation loan will be credited to your consolidation loan using a weighted average of those payments,” says the Education Department’s updated guidance. Under the new regulations, borrowers won’t lose all of their PSLF credit by consolidating existing Direct loans. That rule was suspended under the Limited PSLF Waiver, and continues to be suspended under the IDR Account Adjustment. Borrowers who consolidated Direct loans that already had PSLF credit could erase their progress, resetting their PSLF qualifying payment count to zero. Borrowers with non-Direct student loans, such as FFEL loans, needed to consolidate those loans into a Direct consolidation loan to qualify for PSLF.īut Direct loan consolidation also had a downside. Direct loan consolidation has historically played a pivotal role in PSLF. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |