Students walk through the University of Texas at Austin on February 22, 2024 in Austin, Texas.
Brandon Bell | Getty Images
As the Trump administration overhauls the student loan system, many borrowers pursuing the Public Service Loan Forgiveness program are worried about its future.
“There’s a lot of panicking by PSLF borrowers due to the uncertainty,” said higher education expert Mark Kantrowitz.
PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 10 years of payments.
Here’s what borrowers in the program need to know about recent changes affecting the program.
IDR repayment plan applications down
Some borrowers’ PSLF progress has stalled
While the legal challenges against SAVE were playing out, the Biden administration paused the payments for enrollees through a forbearance, as well as the accrual of any interest.
Unlike the payment pause during the pandemic, borrowers in this forbearance aren’t getting credit toward their required 120 payments for loan forgiveness under PSLF. It’s unclear when the forbearance will end.
But while the applications for other IDR plans remain unavailable, borrowers in SAVE are stuck on their timeline toward loan forgiveness, Kantrowitz said. If you were on an IDR plan other than SAVE, you will continue to get credit during this period if you’re making payments and working in eligible employment.
The Education Department is now tweaking the applications to make sure all their repayment plans comply with the new court order, an agency spokesperson told CNBC last week.
It will likely be months before the Department has reworked all the applications and made them available again, Kantrowitz said.
Those who switch to the Standard plan will continue to get PSLF credit, but the payments are often too high for those working in the public sector or for a nonprofit to afford, experts said.
‘Buy back’ opportunity can help
While it’s frustrating not to be inching toward loan forgiveness for the time being, an option down the road may help, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
The Education Department’s Buyback opportunity lets people pay for certain months that didn’t count, if doing so brings them up to 120 qualifying payments.
For example, time spent in forbearances or deferments that suspended your progress can essentially be cashed in for qualifying payments.
The extra payment must total at least as much as what you have paid monthly under an IDR plan, according to Studentaid.gov.
Borrowers who’ve now been pursuing PSLF for 10 years or more should put in their buyback request sooner than later, Kantrowitz said.
“The benefit is likely to be eliminated by the Trump administration,” he said.
Keep records
Borrowers have already long complained of inaccurate payment counts under the PSLF program. While the student loan repayment options are tweaked, people could see more errors, Kantrowitz said.
“A borrower’s payment history and other student loan details are more likely to get corrupted during a transition,” he said.
As a result, he said, those pursuing PSLF should print out a copy of their payment history on StudentAid.gov.
“It would also be a good idea to create a spreadsheet showing all of the qualifying payments so they have their own count,” Kantrowitz said.
With the PSLF help tool, borrowers can search for a list of qualifying employers and access the employer certification form. Try to fill out this form at least once a year, Kantrowitz added.
