THROUGH Sydney lakeOctober 12, 2021, 7:30 p.m.

Students on the Florida International University campus in Miami, seen in September 2021. (Photographer: Eva Marie Uzcategui — Bloomberg / Getty Images)

Last week, the Education Department announced major changes to its Public Service Loan Forgiveness Program (PSLF), an initiative to enable debt cancellation for public servants. Since its inception in 2007, 98% of borrowers who requested a rebate have been turned down by the program due to a number of obstacles in the approval process.

Now, many federal loan borrowers may be wondering how to benefit from the change.

“Borrowers who devote a decade of their lives to public service should be able to rely on the promise of the forgiveness of public service loans,” Education Secretary Miguel Cardona said in a statement announcing the overhaul of the service. PSLF. “The system has not delivered on that promise to date, but that is about to change for many borrowers who have served their communities and their country.”

The overhaul promises to immediately wipe off an additional $ 1.7 billion in student loan debt, on top of the nearly $ 10 billion in forgiveness for a wide variety of borrowers that President Joe Biden has announced since January 2021.

The program was set up to write off the balance of direct loans granted to civil service workers after making 10 years of payments (120 eligible monthly payments). Borrowers did not realize, however, that many of their payments did not count towards forgiveness due to unclear rules and regulations associated with the program.

If you are a public service employee looking to get student debt cancellation, read on. Fortune has compiled a list of things to do when applying for the PSLF program.

Make sure you are enrolled in a qualifying loan plan

The PSLF program was created to cancel direct loans on income-based repayment plans for public sector employees who made 120 payments on time. Phew. This is a lot to follow to qualify for debt relief.

“If any of these things went wrong, they didn’t get their forgiveness,” said Randy Lupi, regional vice president of Equitable Advisors. Fortune. But now the overhaul gives borrowers another opportunity – Lupi calls it remedial action – to make sure they’re on track to canceling the loan.

If any of your loans are made through the Federal Family Education Loan (FFEL) or Perkins Loan programs, it is time to consolidate your loans or switch to the direct loan program. FFEL and Perkins loans do not count towards your 120 qualifying payments needed to potentially be canceled through the PSLF program.

Borrowers are expected to make the change by the end of October 2022. For now, as part of the immediate PSLF overhaul, borrowers who have made payments on the FFEL and Perkins loans can complete a limited waiver so that all their student loan payments count towards the PSLF. . However, they will then need to do the full consolidation.

“This is a call to action,” says Lupi Fortune. “[Borrowers] really need to take a close look at their loan situation right now. This is a great opportunity for anyone working in the public sector and any non-profit organization to go ahead and try to reapply. [to PSLF] and see if they can get credit for some of those past payments.

The Education Department will also review previously denied PSLF requests for errors and let borrowers review their forgiveness decisions.

“These actions will help identify and resolve service errors or other issues that have prevented borrowers from getting the PSLF credit they deserve,” according to the Department of Education.

Complete your employer certificate

Borrowers have to make 120 loan repayments on time, which can be difficult to keep up with. One thing that will help make payment control manageable is completing your employer certification each year.

“Sending the form each year will allow us to track and verify the number of eligible payments you make while working full-time for an eligible employer, among other PSLF eligibility requirements,” according to the Federal Office for Humanitarian Aid. students.

Every year that a borrower certifies a job, the loan manager must go back and review the last 12 months of payments. If the borrower has made the payments on time, then 12 months will be credited to the PSLF program, explains Lupi. This way, borrowers can see their progress updated every year and avoid being surprised with ineligible payments.

Start now

Time is running out in the world of student loans right now. We’re only three months away from the end of the COVID student loan forbearance period, and many borrowers haven’t made repayments on their federal loans for over a year and a half.

Preparation and careful consideration are especially important for PSLF borrowers – they are also under the deadline. In less than a year, these borrowers must determine their long-term loan status and ensure that they are able to make all of their payments eligible for a discount.

“Now is the time,” Lupi said. “Look at your situation. Let’s get ahead if we can. Start figuring out your loan payments and start figuring out if you had the right kind of loan.

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