In this week's Extra Credit, we offer a step-by-step guide to navigating the recently announced changes.
Hello and welcome back to MarketWatch’s Extra Credit column, a weekly look at the news through the lens of debt.
The Department’s announcement aims to help public servants get more monthly payments counted towards that 120 monthly payments needed for relief. “We’re going to really cast that wide net and bring those borrowers back in,” Cardona said. Still, loan type and payment plan changes during this waiver period are good news for a lot of people — at least 550,000 the agency estimates. Even better, the Department will be making some adjustments automatically.
In some cases to take advantage of the waiver, borrowers will need to take action. They’ll need to do so by Oct. 31, 2022.Step 1: Make sure the Department of Education has your most up-to-date contact information The Department of Education’s Office of Federal Student Aid will be reaching out to borrowers directly to let them know how they may be affected by the changes announced this week and in some cases, what steps they may need to take to benefit from the PSLF revamp.
But in some cases, these borrowers will have to take action to get those payments counted. That’s why it’s important to find out which type of federal student loans you have. Don’t worry if you have no idea, it’s very common for borrowers not to know. Step 3: Check if your current or previous employment is eligible for PSLF If you’ve already had some of your employment certified for PSLF — that means that before November 2020 you submitted an employment certification form had it approved or after that date you submitted a PSLF form and had your employment approved — you can skip down to Step 4.
If you retired or left the public sector and believe you once worked for a qualifying employer, it’s still worth checking if that employment is eligible. During the period covered by the limited waiver, borrowers who previously worked in public service and have since left those jobs can have any payments made while working at the eligible employer counted towards relief.
Step 5: Submit a PSLF form before October 31, 2022 If you only have Direct Loans and you previously certified your employment for PSLF — that means that before November 2020 you submitted an employment certification form had it approved or after that date you submitted a PSLF form and had your employment approved — you can skip down to Step 6.
As we’re still at the beginning of the waiver window, you may want to wait until after your consolidation has been processed before completing the form to make it easier for the PSLF form to be processed, said Betsy Mayotte, the president of The Institute of Student Loan Advisors. Processing a consolidation usually takes about six to eight weeks.
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