Student debt is a huge problem for millions of U.S. taxpayers, but some federal student loans are easier to discharge than others. The PSLF program provides borrowers with an alternative to the standard 10-year repayment plan when they are ready to leave school, and was meant to encourage more borrowers to take advantage of higher education. The program is designed to allow borrowers to have the federal government forgive the remaining principal and interest after they make 120 or 150 payments on their loans. But what does the data show?
We get lots of questions from students (and their parents) about when they should file for their PSLF discharge . Although we don’t have a specific timeline, the data is clear that the longer you wait, the longer it will take for your PSLF debt to be discharged.
This article will provide you with an update on PSLF discharge approval rates by comparing student loan repayment options to see which one may be the best option for borrowers. We will compare the following: PSLF (Public Service Loan Forgiveness) Direct Loan (undergrad) Graduate Loan (undergrad) The comparison will show us which option is best for borrowers to pursue.. Read more about pslf approval rate and let us know what you think.
The rejection rate for Public Service Loan Forgiveness (PSLF) is well-known. “I’ve read that 99 percent of individuals who apply for PSLF are rejected…” I hear nearly every SLP session when a client is PSLF-eligible. What are your thoughts on that?”
For the last four years, the media has used the identical pre-March 2019 number to create an echo chamber, frightening consumers away from PSLF. This figure is inaccurate, and we believe it’s essential to emphasize that misleading headlines may cost you a lot of time and money.
The Department of Education’s most recent PSLF statistics release is very encouraging. PSLF approvals have increased, indicating that more individuals than ever are on track to have their debts forgiven in the future.
Let’s speak about how approval numbers were calculated before to 2021 before we go into the most current PSLF data release.
Paperwork for the PSLF
The PSLF data report contains information and approval statistics for federal student loan borrowers interested in PSLF. Two papers are used to collect this information:
- Form for Certification of Employment (ECF). In 2012, the ECF was established by Federal Student Aid. This form may be used to certify that your job qualifies for the PSLF Program and to calculate how many qualifying payments you’ve made toward the 120 payment threshold.
- Application for Public Service Loan Forgiveness. Then, in 2017, came the PSLF application. This form was designed for debtors who thought they had made 120 eligible monthly payments and were formally asking for loan forgiveness on the amount due. In the autumn of 2017, Federal Student Aid started accepting and evaluating PSLF Program applications from borrowers seeking debt forgiveness.
The new combined Public Service Loan Forgiveness Employment Certification and Applications (“PSLF form”) was published by Federal Student Aid in November 2020. After submitting the combined PSLF form, a borrower’s account is thoroughly reviewed to establish PSLF and TEPSLF eligibility.
The form acts as employment proof for the time periods provided, and the borrower gets a count of their qualifying payments if the borrower hasn’t fulfilled all of the criteria for forgiveness. Borrowers who satisfy all of the criteria and make 120 qualifying PSLF or TEPSLF payments are eligible for forgiveness.
Take action now: Complete the online PSLF Help Tool here to sign up for PSLF or change your payment count, then take this auto-filled Employer Certification Form (ECF) to your present employer for signing. Then, using Fedloan’s Portal/Mail to Fedloan, upload the whole ECF. Here are some pointers on how to do this correctly: Become a PSLF Ninja Help Tool
Recertify income & submit a new ECF every year on time and also check that your credits are being counted appropriately.
Remember, in order to be eligible for PSLF, you must have: 1. Direct Loans. 2. Follow an income-driven strategy. 3. Get a full-time job with a reputable company. 4. Pay a total of 120 eligible payments.
The procedure was made easier by combining these apps. Changes in how the Federal Student Aid (FSA) communicated PSLF statistics to the public were also brought about by the modifications to this documentation. The PSLF report was updated in April 2021 to accommodate the new combined form, which went into effect in November 2020.
PSLF statistics reports from the past
On StudentAid.gov, the earliest PSLF data report accessible for viewing was for the period before to March 2019, and the information reported was very basic:
Because the PSLF data report did not include data from the ECF, it seems that just the original PSLF application was the basis for this PSLF data report.
Only 610 of the 58,293 applications submitted for debt forgiveness were accepted by their loan servicer in the original data set. This translates to a 1.05 percent acceptance rating. These figures were the source of the media headline “99 percent of PSLF applications rejected.”
The grounds for PSLF rejections were not broken out in this report, except if they were due to missing information.
In 2019, a new PSLF data report with updated information was released every three months, and in 2020, new reports were released monthly until November 2020. Thankfully, they were more comprehensive than the previous report, which contained information from both the PSLF application form and the ECF. An example from the November 2020 report is as follows:
The ECF and the real PSLF application have their own data sets.
The top two causes for rejection of PSLF applications
As additional information became available, it became apparent that PSLF application rejection rates were not due to a lack of eligibility, but rather to a fault with paperwork and procedure that made it seem worse than it was.
Information that isn’t available
More than a quarter of the 58,293 PSLF applications processed from the pre-March 2019 PSLF data report were rejected because of “missing information.” PSLF applications that were submitted were either incomplete or lacked all of the essential information to be processed.
Through November 2020, “missing information” remained to be the cause for 23 percent to 26 percent of PSLF applications being denied, according to recent data. It’s also worth noting that ECFs were often rejected because to “missing information” accounting for more than 75% of the time!
We heard from our clients that FedLoan (the servicer in charge of the PSLF program) was rejecting PSLF applications and ECFs for a variety of reasons. For instance, if an applicant’s job start and end dates were not formatted correctly, such as “04/05/2017” vs “4/5/17.” Borrowers would have to file a fresh PSLF application as a result of this.
Payments that qualify
Through November 2020, “qualifying payments” (or the absence thereof) was the basis for rejection of 53 percent to 59 percent of PSLF applications. This implies that a borrower completed an application, had it evaluated, and the findings revealed that the borrower had not made 120 qualifying payments.
Why have so many individuals applied so soon after the deadline?
One cause may be paperwork misunderstanding; it’s conceivable that many borrowers filed for PSLF forgiveness inadvertently while attempting to update their payment count with the ECF. Previously, individuals who hadn’t made 120 payments were simply classified as a failed PSLF effort, thus exaggerating the PSLF rejection rate.
Improvements to PSLF paperwork & process
Because of these faults and inefficiencies, the FSA decided to combine the two original paperwork forms in November 2020. It doesn’t matter if you want to apply for forgiveness right now or simply keep track of your progress.
Simply complete out this new, consolidated PSLF form, and if you’re qualified, PSLF will be immediately applied to your account. If not, an updated payment count will show you where you are in the process. To prevent misunderstanding, FSA recognized it needed to simplify the user experience with a simpler application.
In 2020-2021, FSA updated the PSLF Help Tool to help with “missing information” issues. The tool, which has been available since December 2018, assists individuals interested in PSLF in learning more about the program, determining if their company qualifies, and determining what they should do with their loans to maximize their chances of success.
The PSLF Help Tool generates an auto-filled PDF of the new merged PSLF form, which includes your basic information, employer information, start date, and so on. This form must be signed by you and taken to your employer for signing. Then, for processing, submit it to FedLoan Servicing.
This tool reduced the number of missing pieces of information or data input errors on certain forms. The PSLF Help Tool, according to several FedLoan personnel, is the easiest method to complete the new PSLF form, reducing processing time and eliminating minor errors that may result in rejection due to missing information.
A new PSLF statistics report is available.
The PSLF data report was modified in April 2021 to accommodate the new merged PSLF form. Borrowers may now use a single, combined form to verify their employment, seek an updated eligible payment count, and ask for forgiveness under the PSLF programs. Prior to April 2021, reports are dependent on whether the borrower applied for an ECF or a forgiveness.
|The new reporting methodology makes it apparent that not everyone who fills out a PSLF form is eligible for (or expects to be eligible for) forgiveness at that time. To prevent skewing PSLF eligibility statistics, it also takes out applications that have been denied due to “missing information” from the start.|
As of July 31, 2021, the most current PSLF data report accessible was from April 2021, however according to studentaid.gov, this information should be produced monthly.
The findings of this report cover the period from November 9, 2020, to April 30, 2021, and indicate that 3,458 of the 168,702 Employment Certification Forms processed fulfilled the criteria for forgiveness. That’s a 2.1 percent approval percentage for forgiveness from ECFs that have been handled.
“But how is that much better than the 1% approval rate?” you may wonder.
This new report, once again, does a better job of portraying borrowers’ successful progress toward PSLF rather than classifying those who haven’t made 120 payments as a failed PSLF effort. It also elucidates why so many borrowers fail to satisfy the forgiveness criteria. It’s just a question of time for most borrowers: 97.9% of applications filed failed to satisfy the PSLF qualifying payment threshold. This indicates they’re on pace for PSLF, but they haven’t yet reached 120 payments.
A total of 99.7% of the 168,702 ECFs processed resulted in an updated qualifying payment count for tracking PSLF or TEPSLF progress. This is enormous! PSLF is on pace with 168,702 processed ECFs!
Only 0.3 percent of applicants are not eligible for PSLF because they lack Direct Loans, work for an ineligible company, have employment date problems, or have loans in default or ineligible status.
Don’t let the headlines deter you from joining PSLF.
If you answer yes to all of the following questions, you’re on your way to having your student loans forgiven via PSLF.
- Do you work for a company that qualifies? – Use the PSLF Help Tool and send it to FedLoan Servicing if you’re unsure. If FedLoan Servicing is already your servicer, use MyFedLoan.org/FileUpload. Mail: U.S. Department of Education, FedLoan Servicing, P.O. Box 69184, Harrisburg, PA 17106-9184 Fax: 717-720-1628; Online: If FedLoan Servicing is already your servicer, use MyFedLoan.org/FileUpload.
- Do you have a full-time job? — Working full-time with one or more qualified companies means working at least 30 hours per week on average. If you only work for one company, you must work their full-time hours.
- Do you have any Direct Loans from the federal government? – You may check with your servicer or use the PSLF Help Tool to confirm.
Keeping up with your PSLF progress
Here are a few pointers to help you stay on track for PSLF each year:
- Make monthly payments in whole and on time. Make sure you’re always on track by setting up automatic payments.
- Each year, on schedule, recertify your income. Recertification is the term for this procedure.
- Once a year, submit a new Employment Certification Form. This allows you to keep track of your eligible payments.
- Work for a qualified employer full-time. If you change employment, you must submit a new ECF to have your new employer on file. Also, send a final ECF to your previous employer to record any payments made up to your last day of work.
Schedule a meeting with us if you need more assistance with your particular student loan situation. Thousands of individuals have used our services to effectively manage their student loan debt and seek PSLF.
Obtain a Student Loan Program
Borrowing from a federal loan to pay for higher education is often a great investment, and the federal government has made it easier to get a loan for that higher education in recent years. But if the federal government determines that you’re not qualified to borrow from the federal government, then you might have to pay the money back to the government instead of receiving the loan.. Read more about student loan forgiveness statistics and let us know what you think.
This article broadly covered the following related topics:
- public service loan forgiveness
- public service loan forgiveness update
- pslf approval rate
- has anyone gotten loans forgiven pslf
- pslf how many forgiven