The Public Service Loan Forgiveness program (PSLF) offers a way for full-time public servants like teachers and nurses to have the remainder of their federal student loan debt discharged after making payments for 10 years. But since the start of the program, 98% of applicants have been denied student loan relief.
In order to make the program more effective, the Biden administration recently unveiled a significant overhaul that temporarily makes it easier for 550,000 borrowers to qualify, thanks to a limited PSLF waiver.
Applicants who have Federal Family Education Loan Program loans (FFEL loans) or Federal Perkins Loans were previously unable to count their prior loan payments toward the 120 qualifying payments needed to achieve forgiveness. But now, eligible borrowers will be able to count these prior payments as long as they consolidate their federal loans into the Direct Loan program by October 2022.
Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness.
Even with these significant changes, you still may not qualify for the PSLF program — maybe because you don't work for a qualifying employer, or because you have private loans. Read on to learn about your options if you're denied PSLF, including private student loan refinancing.
If you decide to refinance your student debt, be sure to compare offers on Credible to ensure you're getting the lowest possible student loan rate for your situation.
What to do if you're denied Public Service Loan Forgiveness
The Department of Education recently settled a lawsuit with one of the country's largest teacher unions to instate added protections for PSLF applicants.
As part of the settlement, the Education Department will automatically review all applications for PSLF or Temporary Expanded Public Service Loan Forgiveness (TEPSLF) that were denied prior to November 2020 for borrowers who made 120 payments on their Direct Loans.
If your application was denied but your case isn't automatically reviewed, you can request a second look from the Education Department to correct errors that may have occurred during the process. You'll receive a detailed notice that explains:
- Why you were denied student loan forgiveness
- The number of remaining PSLF payments until you meet eligibility requirements
- Information on how to determine qualifying payments
- Contact information of an Education Department representative
You can learn more about having your PSLF form reviewed by using the PSLF help tool on the Federal Student Aid (FSA) website. There may be a legitimate reason why some of your loans were not discharged through PSLF since not all types of loans are eligible for federal student loan forgiveness.
Consider refinancing your ineligible student loans
The PSLF program offers a way to have your federal student loans discharged, but it won't apply to private student loans. About 1 in 8 borrowers has privately-held student loans, which means that many borrowers will be stuck with college debt even if they do qualify for PSLF.
Private student loan refinance rates are near record lows, according to Credible data, which means it's a good time to lock in a better rate. Refinancing to a lower interest rate may help you reduce your student loan payments, pay off your debt faster and even save money on interest over the life of the loan.
Browse student loan interest rates in the rate table below, and visit Credible to see your estimated rate. Doing so will not impact your credit score.
Should you refinance your student loan debt?
One caveat to student loan refinancing is if you refinance your federal loans into a private loan, you'll be ineligible for income-driven repayment plans (IDR), COVID-19 administrative forbearance and federal student loan forgiveness programs. So, if you're hoping to one day qualify for PSLF, be careful not to refinance your federal loans.
But since private student loans wouldn't be discharged under PSLF anyway, you have nothing to lose by refinancing these loans to a lower interest rate — especially since private lenders are prohibited from charging refinance fees.
To clear up any confusion about the student loan refinancing process, and to learn how making additional payments can save you even more money over time, get in touch with an experienced loan officer at Credible.
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