Student Loans

A Student Loan Forgiveness Waiver Expires Oct. 31. Do You Qualify?

NBC 7 Responds looks at the waiver for the Public Service Loan Forgiveness program and how it can help wipe your debts

NBC Universal, Inc.

Time is running out for student loan borrowers who qualify for a waiver that could erase part, or even all, of their debt. This isn't President Biden's debt forgiveness plan, but the Public Service Loan Forgiveness program, and the deadline of October 31st is quickly approaching.

"You'd wake up in cold sweats and say, 'Oh my gosh, did I miss my deadline?'" said Tyler Eychthison, a 5th-grade teacher at San Marcos Elementary School.

He'd been working toward the 2007 program, which allows borrowers who work in the public or non-profit sectors to have their debt removed after they have made 120 qualifying monthly payments under a qualifying repayment plan. But what was causing the nightmares?

"There was a 99% denial rate in 2017, 10 years after the creation of the program," said Celina Damian, the Student Loan Ombudsperson at the California Department of Financial Protection and Innovation. "People were upset. Here they have their career path, their financial path, and 10 years later they're told, 'Nope, you're still stuck with this balance and denied.'"

Damian says in 2021 the Department of Education offered borrowers a second chance at this loan forgiveness by removing some of the roadblocks.

First, is debt consolidation. Not all federal loans qualified for forgiveness, requiring borrowers to consolidate their loans. But those 120 payments would reset to zero when that consolidation happened. The waiver gave borrowers credit for payments they had already made on their loans.

Second, qualifying payments. The waiver also allowed late and overpayments to count. Previously if someone had tried to get pay off a chunk of their loan, it would not count.

"Borrowers were trying to get ahead and paid higher amounts," said Damian. "[Loan providers] would say, 'Nope, your payment is $5 and you paid $7, that's not a qualifying payment.'"

Who Qualifies?

People who are employed by a U.S. federal, state, local or tribal government or not-for-profit organization may qualify for the PSLF program. For those individuals, the PSLF program forgives the remaining balance on your direct loans after you have made 120 qualifying monthly payments under a repayment plan.

To qualify, you must:

  • be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service);
  • work full-time for that agency or organization;
  • have Direct Loans (or consolidate other federal student loans into a Direct Loan);
  • repay your loans under an income-driven repayment plan; and
  • make 120 qualifying payments

Parents of college students can also benefit from this program if they took out parent plus loans and meet the other qualifications.

But this waiver expires on October 31st.

There is a lot more information on the Department of Education's website, including specific answers to frequently asked questions.

Contact Us