There has been much discussion about student loan forgiveness since the federal student loan payment pause began in March of 2020. One form of loan forgiveness that is available is the Public Service Loan Forgiveness (PSLF) Temporary Expanded Waiver. This is exciting news for public service employees and could provide student loan repayment relief to individuals with federal student loan debt who work for eligible public service employers.

The PSLF Program forgives the remaining balance on a borrower’s Federal Direct Loans after they have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. PSLF is administered by the Office of Federal Student Aid within the U.S. Department of Education.

For a limited time, eligible borrowers may receive credit for past periods of repayment on student loans that had not previously qualified for PSLF. Payments made while working for a qualifying employer may count as a qualifying payment under this temporary waiver, regardless of the loan program, repayment plan, or whether the payment was made in full or on time. The deadline to file for the waiver is October 31, 2022.

“Student loan forgiveness can be a financial game-changer for individuals working in public service. With the rising cost of living, forgiveness can help ease a major financial burden for many borrowers,” said Mary Dyer, Financial Education Programs Manager at the Finance Authority of Maine (FAME). “The starting salary for some public service jobs may not be high enough to support student loan payments, but for those who qualify for forgiveness, this could mean an additional $50 – $1,000 a month that could be directed toward investing, saving, purchasing a home, or spending money in the local economy.”

FAME has been offering presentations, webinars, and assistance to help Maine borrowers determine if they qualify for forgiveness and how to file for the waiver. The next webinar, “Understanding PSLF and Temporary Expanded Waiver,” will be conducted on Thursday, August 25, at noon. For those unable to attend, the webinar  will be recorded and saved to FAME’s PSLF webpage.

“This expanded temporary waiver could bring welcome relief for anyone whose payments didn’t previously qualify under PSLF,” said Sarah Newcomb, Financial Education Program Specialist at FAME. Sarah has been working for a qualifying employer since 2014 and was making regular payments on her loans, but she did not learn about PSLF until 2019. “I consolidated all my loans into one direct federal loan so I could qualify for PSLF. Under the previous rules, my loans weren’t scheduled to be forgiven until 2029, despite my having made payments under a qualifying employer for over five years. With the new temporary waiver, however, the payments I made from 2014-2019 will now count toward forgiveness, meaning my pay-off date will come much sooner. Now, instead of having to make payments for another seven years, I only have two and a half more years of payments remaining, which will potentially save me approximately $10,000.”

According to Educationdata.org, 35% of student loan holders find it difficult to buy daily necessities because of their monthly student loan payments. Studies show that when consumers have less expendable income due to debt obligations, they decrease spending: https://educationdata.org/student-loan-debt-economic-impact

If you think you or someone you know could potentially qualify for and benefit from PSLF and the temporary waiver, FAME encourages you to take the following steps:

1. Visit studentaid.gov/pslf and use the PSLF tool to fill out the waiver and complete your employment verification forms. This will require contacting the HR or payroll specialist for your employer/previous employer(s);
2. Contact your federal loan servicer to discuss any questions you may have regarding consolidation, which loans will or won’t qualify, etc. If you don’t know who your servicer is, you can determine that at studentaid.gov; and
3. Visit FAME’s recently developed PSLF webpage, which includes a recorded informational webinar and other resources.

Public service-eligible employers include, but are not limited to: federal, state, local and tribal government agencies; military and public health service jobs; law enforcement positions or public service law; public school, college and university jobs, including administrative and teaching roles, private schools, colleges, and universities that operate as not-for-profit organizations; other positions in 501(c)(3) not-for-profit organizations; and AmeriCorps (full-time) and Peace Corps.

It is important to note that the above example related to Sarah Newcomb is fact-specific to the particular circumstances of her loans and work. FAME cannot guarantee whether a particular borrower will qualify for PSLF or to what extent, if any, they may be able to take advantage of the PSLF Temporary Expanded Waiver.