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Posted: October 15th, 2021

On October 6, 2021, the Department of Education (ED), under the Biden administration, announced temporary changes to the Public Service Loan Forgiveness program (PSLF) called Temporary Expanded Public Service Loan Forgiveness (TEPSLF). With these changes, the ED intends to make more people eligible for PSLF. In fact, ED estimates that 550,000 federal student loan borrowers could receive credit for payments that were previously ineligible. Continue reading to learn if you are eligible for Biden student loan forgiveness!

What is PSLF and how is TEPSLF different?

Public Service Loan Forgiveness is a federal program that began in 2007. The program encourages graduates to pursue a career in public service. If a borrower with federal loans works for a qualifying employer and makes 10 years of student loan payments–120 total–they will have their remaining loan balance forgiven. 

PSLF has many technical requirements regarding loan type, repayment plan, and employment. TEPSLF expands those requirements by allowing payments from all federal loan programs or repayment plans to count toward the 120 payments needed for forgiveness. As long as the borrower worked full-time for a qualifying employer, they will receive credit for all federal student loan payments they made.

Also see: Should I use my 401(k) to pay off student loans?

Who is eligible for TEPSLF?

Biden’s change to PSLF will apply to student loan borrowers with federal Direct Loans, borrowers who have already consolidated into the Direct Loan Program, and borrowers who consolidate into the Direct Loan Program by Oct. 31, 2022.

TEPSLF will also benefit military service members. It will allow payments made during months spent on active duty to count toward PSLF.  This even applies to members whose loans were in deferment or forbearance rather than in active repayment.

Also see: How to consolidate and refinance student loans

What types of loans are eligible?

Previously, only payments on Direct Loans and Direct Consolidation Loans could count toward the 120 qualifying payments for forgiveness. Payments made on loans from the Federal Family Education Loan (FFEL) program and the Federal Perkins Loan program were not eligible. You can consolidate these loans into Direct Consolidation Loans, but any previous payments would not carry over.

Under TEPSLF, FFEL and Perkins loans still must be consolidated into Direct loans. However, payments that were made before consolidation on these loans will now count toward the required payments for PSLF. This change will affect payments retroactive to October 1, 2007. ED estimates that the average borrower could receive 23 additional qualifying payments. 

What repayment plans are eligible?

As long as the borrower was working for a qualifying employer, federal student loan payments made on any repayment plan will qualify for PSLF. This change is also retroactive to October 1, 2007. 

Previously, payments had to be made under the standard 10-year plan or an income-driven repayment plan. Payments made on the extended or graduated repayment plans did not qualify. TEPSLF allows payments made on any repayment plan to count.

Related: Paying off student loans early

What other payments can now qualify? 

In addition to the above changes, ED is also simplifying the definition of a qualifying payment. Many federal student loan borrowers missed out on PSLF credit for small mistakes. This could include making a payment that was off by a few cents or late by a few days. The temporary expansion simplifies the strict requirements for a qualifying payment.

ED will automatically update payment counts for borrowers who experienced this issue, as long as they had certified employment for PSLF. Borrowers who had not yet applied for PSLF at the time of the payments can benefit from these temporary simplifications as long as they apply by October 31, 2022.

How can you receive TEPSLF?

First, check the types of federal loans you have to determine if you may be eligible for additional PSLF payments. This can be done by logging in to your Federal Student Aid account and viewing your aid summary. Then, if you haven’t already, fill out the PSLF form to certify your employment for any timeframe you wish to receive additional payments for. 

Borrowers who wish to benefit from the changes made with TEPSLF must consolidate their FFEL/Perkins Loans and fill out the PSLF form by October 31, 2022! Good luck taking advantage of the new Biden student loan forgiveness programs!