The Public Service Loan Forgiveness (PSLF) program can provide major financial relief from student loan debt for government and nonprofit employees. However, there are a few common application mistakes that can lead to delays in processing or even complete rejection. As such, it’s important to familiarize yourself with the requirements and take proactive steps to avoid common mistakes that may cost you time and money down the road.
Let’s cover some common mistakes and tips to avoid them so you can maximize your chances of successful completion of the PSLF program:
Mistake 1: Assuming PSLF is Automatic
Many people believe that PSLF is automatic and that once they make 120 qualifying payments, the loan is forgiven—that is not the case.
You must apply with all necessary documentation to prove that you’ve met the PSLF requirements. Even if you’ve made 120 qualifying payments and worked in public service for ten years, your loans will not be forgiven if you don’t submit the application on time.
- Tips to avoid this mistake: Keep your documentation throughout the ten years you make your payments, including proof of qualifying payments and eligible employment records.
Mistake 2: Forgetting to Submit your Employment Certification Form (ECF)
The ECF is a form that you must submit to show you have met the employment requirements of PSLF. You should submit the ECF form every year or whenever you change employers to keep an accurate record of your qualifying payments. Not submitting the ECF or submitting the form incorrectly could lead to disqualification from PSLF.
- Tip to avoid this mistake: Enroll online and set up automatic reminders for yearly submission.
Mistake 3: Missing Your IDR Recertification
You must recertify with your IDR plan every year to account for changes in your income (and you must recertify even if nothing has changed). If you forget to recertify, you may lose your Income-driven Repayment benefits and delay your PSLF qualification.
- Tip to avoid this mistake: You should set up a reminder for the date of your IDR plan recertification through your lender’s website—if they offer the tool—or your calendar app.
Mistake 4: Remaining on Deferment or Forbearance for Too Long
Deferment and forbearance are options that can pause your student loan payments temporarily. However, that time does not count towards your qualifying payments.
Similarly, if you opt for forbearance after an unexpected financial crisis, like losing your job, it can take a while to resume your qualifying payments. Instead, consider adjusting your IDR payment plan if you’re worried about your financial situation. Some plans can reduce your monthly payment to zero while still counting as qualifying payments.
- Tip to avoid this mistake: Only use deferment or forbearance sparingly if possible. When you encounter financial struggles, contact your loan servicer right away to seek possible solutions.
Mistake 5: Late or Missing Payments
Late or missing payments can be detrimental to achieving PSLF because your payment history is crucial in determining your eligibility for loan forgiveness.
Payments made later than 15 days after the scheduled due date will not count towards your qualifying payments. If you forget to make too many qualifying payments, you can significantly delay your PSLF timeline.
- Tip to avoid this mistake: Setting up automatic payments guarantees that your payment due dates are met successfully. Otherwise, use calendar reminders on your phone to avoid missing or making late payments.
Help Your PSLF Application Sail Through
Utilizing the PSLF program can be an invaluable resource when managing your student loan debt, and these common application missteps can be easily avoided. Be sure to take preventive measures by educating yourself on the requirements ahead of time. Investing some time upfront will save you a lot of stress and worry down the road as you navigate the PSLF program.
