How Do I Apply For PSLF Loan Forgiveness?
- Make sure you have made 120 payments.
- Go online and fill out the application.
- Have your employer fill out their section.
- Scan and submit the form online.
- Maintain qualifying employment until the loan is discharged.
Applying for PSLF loan forgiveness should be a simple process. But, as we all know, nothing is simple when it comes to PSLF.
Why Should You Listen To Me?
The main reason you should consider my advice is that I have successfully applied for PSLF loan forgiveness. The process was rocky, but I took away a lot of lessons! If I had to go back and do this a second time, it would be a breeze! Alas, I only plan to take out six figures in student loans once in this lifetime.
I hope these lessons help you when your are applying for PSLF loan forgiveness. Please like this post and submit your questions and experiences in the comments below!
Before Applying for PSLF Loan Forgiveness Make Sure You Qualify!
People have asked me if they can apply early for PSLF loan forgiveness. The answer is NO. Well, you could apply, but your application would be rejected. Before you apply for PSLF loan forgiveness, you must have made 120 qualifying payments.
If you follow the advice I give in my previous post on PSLF loan forgiveness, you will have filed the employer certification form every year. Once processed, the federal government will send you a letter confirming that your job qualifies for PSLF. You will also be told how many qualifying payments you have made thus far! Here is what the letter looks like:
FedLoan will send you a letter when you are eligible, however DO NOT WAIT FOR THE LETTER! As you can see from this letter, they sent it MONTHS after eligibility in this case!
When you know you have made your 120th payment, that is when you file the application for PSLF loan forgiveness.
The application looks a lot like the employer certification form.
TIP: I do not recommend using the e-signature feature. It failed for me and delayed my application by a month! Just print, sign, scan, and upload.
Do I Have To Keep Making Payments After Applying for PSLF Loan Forgiveness?
Finally, some good news! Once you apply, your loans automatically go into forbearance unless you check “the box.“ DO NOT CHECK THE BOX (unless of course you want to keep making payments because you are unsure if you qualify).
Can I get a new job while my PSLF loan forgiveness application is pending?
The short answer is that there is no short answer. In order to be eligible for forgiveness, you must remain employed by a qualifying employer until the loan is discharged.
So, you don;t have to stay at the same public defender agency, BUT, if you go to a new public defender agency you may have to reapply! Wait? What? I know. It’s insane. But if during the application process, including after the application is approved but not yet processed for discharge of the loans, you change jobs, you must reapply.
So don’t go running off to private practice once you apply. And if you think that you may go to a new public defender or other qualifying organization while your application is pending, it may make sense to submit an amended application with your new employer signing off as well.
This can be a problem for some people, as it takes months for the application to be approved and up to six months right now for the approved application to be processed.
So the two takeaways: 1. Do not leave qualifying employment until the loans are discharged. 2. If you get a new qualifying position before discharge, reapply with the new employer’s information included.
What If I Overpaid My Student Loan Before Forgiveness?
More good news! You will get a refund! If you over paid on your student loans, meaning that you made more than 120 qualifying payments,m you will get a refund. In my case, after they audited my account, it was discovered that I ended up making 125 payments. So, my last 5 payments will be returned to me.
Don’t plan on spending that newfound wealth anytime soon. I have been told that it takes months after forgiveness is processed for the refund to be issued. Just know that it is coming.
Be advised, refunds are paid in the same way the loan payments were made. So if you mailed a check, they mail a check. If you paid electronically from your bank account, they will do an electronic transfer to that account.
My PSLF Loan Forgiveness Application Was Approved, Do I Still Need To Re-certify IBR?
More good news! If your application for loan forgiveness has been approved and you are just waiting for the discharge to be processed, you do not need to re-certify your Income Based Repayment plan!
Will I Be Taxed On My Forgiven Loans?
No, you do not have to pay taxes on your loans forgiven under PSLF.
As you can see from the letter above, informing of eligibility to apply for forgiveness under PSLF, the Department of Education has confirmed with the IRS that loans forgiven under PSLF are not taxed. Hooray!
Final Thoughts
The government has made this program way to complicated and difficult. It has many pitfalls just waiting for you to fall into. Read this post to avoid those pitfalls. Then be patient. If you are diligent and stay on top of the government, your day of financial freedom will come!
Please leave any questions in the comments section. I would love to hear your stories of applying for PSLF loan forgiveness as well! And please “like” and share this post. The more people who know the ins and outs of PSLF loan forgiveness, the less people will be denied when they apply!
