June 06, 2018

DOE Launches Temporary Expanded Public Service Loan Forgiveness Program

If your application for the Public Service Loan Forgiveness (PSLF) program was denied, you may be in luck. This week, the Department of Education released information about a new, albeit temporary program to help borrowers working in public service earn student loan forgiveness. The new program, dubbed Temporary Expanded Public Service Loan Forgiveness (TEPSLF), is […]

If your application for the Public Service Loan Forgiveness (PSLF) program was denied, you may be in luck. This week, the Department of Education released information about a new, albeit temporary program to help borrowers working in public service earn student loan forgiveness.

The new program, dubbed Temporary Expanded Public Service Loan Forgiveness (TEPSLF), is a short-term fix for issues surrounding PSLF. But advocates say it’s a sign that Trump’s view on student loans has evolved over the past few months, which for many denied PSLF applicants is a welcomed change.

The Road to TEPSLF

The story of this new loan forgiveness program goes back to March 2018, when President Trump signed the $3.1 trillion Omnibus bill. In the bill, $350 million was designated for the PSLF program, and his administration (including the Education Department) encouraged everyone eligible to apply.

Unfortunately for some, however, their applications would meet a dead end when denial letters were sent to thousands of borrowers whose loans didn’t meet PSLF program requirements. This all changed at the end of May 2018.

What is TEPSLF?

When President Trump signed the Omnibus bill, known as the Consolidated Appropriations Act of 2018, he paved the way for the TEPSLF program. Until that time, many experts thought the PSLF program would be defunded completely. Instead it gave the program new life – even expanding on the number of borrowers who are eligible.

Working under “limited, additional conditions” for borrower eligibility, the TEPSLF program is a new loan forgiveness program with the same benefits as the original PSLF program. Yet, rather than only making loan forgiveness available to borrowers with certain loans, it opens forgiveness to borrowers whose repayment plans previously didn’t qualify and whose applications were ultimately denied.

Since there are a few important changes to mention, be sure to learn how the application process differs this time around.

How to Qualify for TEPSLF

According to the Federal Student Aid website, qualifying for the TEPSLF program is a bit tricky. This is why many borrowers are getting help from student loan experts to start the application process. That said, here’s how you can qualify for TEPSLF.

Before you apply, you will need to have:

  • Submitted a PSLF application and had it denied due to some or all your payments being made to a nonqualifying repayment plan for PSLF
  • Been employed full-time for at least 10 years at a qualifying employer who certified your employment
    • Qualifying employers typically include state, local and federal government organizations, as well as 501(c)(3) non-profits
  • Been approved by FedLoan Servicing (the Education Department’s federal loan servicer) for the PSLF program
  • Made 120 on-time, qualifying payments during full-time employment at your qualifying employer(s) under TEPSLF’s new requirements

Because TEPSLF applications will be evaluated on a first come, first served basis, it’s important to submit your TEPSLF application as soon as possible. Start the application process now by calling (800) 771-6358.

Loans That Qualify for TEPSLF

Under the original PSLF program, only Subsidized and Unsubsidized Direct Loans, Direct PLUS Loans for qualified parents and Direct Consolidation Loans were eligible. With TEPSLF ramping up, the new federal loans added to the list include:

  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Consolidation Standard Repayment Plan
  • Consolidation Graduated Repayment Plan

Remember, only applicants who have previously applied for the PSLF program and been denied due to these kinds of loans will qualify. But as MarketWatch points out, the announcement of the new program could begin a rush in PSLF applications, mainly from borrowers who hope they’re rejected so they can apply for TEPSLF.

Other TEPSLF Requirements

If your PSLF application was rejected due to your loan type(s), and you meet the above qualifications, there are a couple more things you’ll need to do before getting approved for TEPSLF.

First off, some payments that don’t typically count toward the PSLF program may count under TEPSLF. However, you’ll only be eligible for TEPSLF if the amount you paid towards your student loans 12 months before applying for TEPSLF, as well as the last payment you made right before applying, are “at least as much as you would have paid under an income-driven repayment plan”.

Once your application is sent in, FedLoan Servicing will let you know if they need more information documenting your income to determine if you’re eligible.

Next, you’ll need to send an email to FedLoan Servicing with a request to reconsider your PSLF eligibility. Certain details will need to be included in the email, so it’s probably best to get assistance from a student loan expert during this important step.

What Happens After You Apply for TEPSLF?

When FedLoan Servicing receives your application, they will first need to confirm your previously submitted PSLF application was denied. Once confirmed, FedLoan Servicing will contact you regarding your status for the TEPSLF program. This may include one of the following responses:

  • Your application is being considered for TEPSLF and you will be contacted again once your review is complete or additional information is needed.
  • Your PSLF application is still under review, and if you’re deemed ineligible, you’ll be automatically evaluated for the TEPSLF program. However, even in this case, you’ll still need to submit an email request for reconsideration.
  • You’re currently ineligible for TEPSLF because you haven’t applied for PSLF yet and had your application denied.

Please note: The $350 million fund that covers the cost of canceling student debt is limited, so once funding runs out, these programs will expire. This makes it critical for borrowers who qualify for PSLF and TEPSLF to submit applications as soon as possible to take advantage of these programs’ benefits.

You can start the application process now by calling (800) 771-6358.