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How do I know if my Employer is Eligible Public Service Loan Forgiveness?

The Department of Education has several great resources for verifying is your employer is eligible for the PSLF program.

Written By: Michael P. Lux, Esq.

Last Updated:

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How do I know if my Employer is Eligible Public Service Loan Forgiveness?

The Department of Education has several great resources for verifying is your employer is eligible for the PSLF program.

Written By: Michael P. Lux, Esq.

Last Updated:

Affiliate Disclosure and Integrity Pledge

This week we received an email from Dave, who is concerned his employer may not be eligible for Public Service Loan Forgiveness (PSLF). Today we will discuss how to determine PSLF employer eligibility and specific steps to take. If you have a question for the Sherpa, feel free to ask us.

Regardless of whom you work for, the best way to determine if your employer is eligible for PSLF is to submit an employer certification form. Borrowers who complete the employer certification form will receive a count of the number of qualifying payments they have made towards the required 120.

People like Dave, who are worried that their employer might not be eligible, may need to take a couple of extra steps to protect themselves going forward.

A New Shortcut – The Department of Education PSLF Help Tool

When this article was first written, people like Dave had to do a bunch of research into employer eligibility for PSLF.

The Department of Education recently made employment verification much easier. Using the PSLF Help Tool, borrowers can verify employer eligibility and generate the necessary form that needs to be completed.

According to the Department of Education, the process takes about 30 minutes. Borrowers will need their FSA ID and a W-2 or Federal Employer Identification Number (EIN) from their employer.

Dave’s Email About PSLF Employer Eligibility

Hi Sherpa,

Fellow attorney here…and I’m flummoxed.

While my question might seem highly specialized, I still think it could be more broadly helpful.

Anyway:

I’m hoping to continue making qualifying payments for PSLF at my new job at the Tennessee Education Lottery Corporation (TEL). TEL was created by statute in Tennessee as “a body, politic and corporate, and a quasi-public instrumentality, and not a state agency or department, which shall be deemed to be acting in all respects for the benefit of the people of the state through the operation of a state lottery and in the performance of other essential public functions entrusted to it.” TCA 4-51-101(c).

What the hell is a “quasi-public instrumentality?” And is it a “governmental entity” for the sake of PSFL?

To attempt to answer my own questions, the only definition to the phrase “quasi-public instrumentality” in TN statute comes in TCA  4-39-101, which provides chapter definitions for Payment of Taxes by State Vendors and Subcontractors.  

“As used in this chapter:

(3)  “State governmental entity” means a state agency, department, board, or commission, or a public corporation or quasi-public instrumentality that performs essential public functions entrusted to it by the state; and”

Should I start celebrating that my work for the Lottery, a “quasi-public instrumentality” in TN, indeed qualifies for PSLF? Quasi-public instrumentality = state governmental entity under the law, right? Or am I being a first-year law student stretching on an exam?

I think there’s meat on the bone with questions about “quasi-public instrumentalities,” even if my question might be a little specific for the general audience that finds your site.

Thanks for taking the time,

Dave

Answering Dave’s Question

Dave writes with a highly technical legal question. If he were to initiate a lawsuit against the Department of Education, the laws cited might become relevant. Fortunately, for both Dave and the average borrower, a complicated legal analysis is not usually necessary to resolve Public Service Loan Forgiveness Questions.

Employers Eligible for Public Service Loan Forgiveness (PSLF)

Three employer types qualify as public service:

  • Government – Including Federal, State, and Local
  • Non-Profits – 501(c)(3) Organizations
  • A Private Not-For-Profit Organization – Must have one of the following public service activities as the primary purpose:
    • (1) emergency management,
    • (2) military service,
    • (3) public safety,
    • (4) law enforcement,
    • (5) public interest legal services,
    • (6) early childhood education,
    • (7) public service for individuals with disabilities and the elderly,
    • (8) public health,
    • (9) public education,
    • (10) public library services,
    • (11) school library services, or
    • (12) other school-based services.

How Do I Know If My Employer Qualifies?

People in Dave’s position who are not clear if their employer is eligible for Public Service Loan Forgiveness (PSLF) should submit an employer certification form. This form is available on the Department of Education’s website and must be completed by your employer. We recommend anyone pursuing PSLF submit this form every year to ensure the records stay up to date.

Once submitted, the form will be reviewed for verification that your employer qualifies as a public service employer.

Not only with the Employer certification form help you verify that your employer is eligible, but it is also confirms that you are on an eligible repayment plan and that your loans are eligible. Successful form submission will result in FedLoan servicing sending a letter explaining how many qualifying payments you have made towards PSLF. Once you get to 120 certified payments, your loans will be eligible to be discharged.

Does My Old Employer Count Towards Public Service Loan Forgiveness?

Because there isn’t a requirement to “enroll” in PSLF, old employment can be certified and count towards PSLF.

The challenge with prior employers is getting the necessary paperwork signed. For this reason, the sooner you can get your documents submitted, the better.

Strategy Limitations

The steps we have outlined so far constitute what we would consider to be the “best practice” for verifying employer eligibility. However, successful completion of these steps does not guarantee public service loan forgiveness eligibility. Recently, a lawsuit was initiated by four attorneys who received multiple employer certifications from their loan servicer. They were on track for Public Service Loan Forgiveness, but then the Department of Education changed its mind about their qualification under the 3rd definition of public service. Not only were they told their employer didn’t qualify, but the Department of Education retroactively rejected previously certified payments.

If you work for a 501(c)(3) organization or the government, this specific issue isn’t much of a concern. However, borrowers with some ambiguity about their eligibility should follow the case closely.

Don’t Ignore Other Forgiveness Opportunities: Public Service Loan Forgiveness is the most popular forgiveness program, but many other forms of federal forgiveness are available

We suggest that borrowers in this situation create a savings account or conservative investment account to set aside money for a potential PSLF issue. If, for some reason, these borrowers cannot qualify for PSLF, funds are available to pay off the debt aggressively. The saved money will likely earn less interest than the loans generate, so things won’t break even, but it is a good way for borrowers to protect themselves. If PSLF ends up working out, the money is a great head start for a downpayment on a house or retirement.

Bottom Line: Verifying Employer Eligibility for Public Service Loan Forgiveness is Easy

Figuring out whether or not you qualify for Pubic Service Loan Forgiveness should not require a law degree.

For the vast majority of borrowers, it is as simple as submitting a form.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

37 thoughts on “How do I know if my Employer is Eligible Public Service Loan Forgiveness?”

  1. Hello! In 2014 I was employed by a staffing agency for nonprofit organizations. Thus, I was hired by a for-profit agency and placed by the agency into a nonprofit organization full time. The nonprofit paid the staffing agency for my billed hours and then the staffing agency paid me.

    Would my 2014 work situation still qualify under PSLF (since the staffing agency was technically my employer)?

    Reply
    • Hi Jenny,

      Unfortunately, it sounds like this work would not qualify for PSLF, unless the staffing agency was also a non-profit. However, it still might be worth sending in an employer certification to see what they say. The worst they can do is tell you it doesn’t count.

      Best of luck to you,

      Michael

      Reply
  2. Still waiting for determination of employer eligibility. It’s been in review for almost 10 months now.

    I call fedloan regularly to ask for a status update which is always “your employer is still under review.” I’ve tried escalating to supervisors, no luck.

    I filed a complaint with the department of education who seemed to just kick it back to fedloan. That tactic got me an email to wait longer, but I did get an escalation email address out of it.

    Multiple people at fedloan have told me a 12 month time frame is fairly normal right now. Just putting this out there for people in the same situation.

    Reply
    • Denied just now due to mismatch between my tax id number on my w2 and the one on my certification form. Due to my company’s tax structure, which i provided evidence of, this was correct.

      Further, they weren’t going to send a decision in writing. I had to request it. The representative stated a lot that wasn’t true, and wasn’t a fan of my pointing it out. I’m an attorney who has been researching this quite a bit, so don’t let the fedloan folks fool you. You’ll hear a different response on each call.

      Took about 15 months from beginning to end to get that decision. Trying again to get my not for profit employer to sign the form. They believe they could have some type of liability here. Will likely be an uphill battle. I just want a determination from the dept of Education but may not get it without a lawsuit.

      Reply
  3. They won’t review if my employer is eligible until I consolidate my student loan which is at a higher interest rate then my current loan because of incentives. This seems completely ridiculous being as I’ve submitted a form from my employer to determine their status but they won’t look at it until I complete the consolidation, which if rejected will cost me about $1500 a year more in interest then my current loan

    Reply
    • Consolidation shouldn’t change your interest rate as they use the weighted average of the loans for the new consolidated loan.

      What is the incentive you speak of?

      Also, as a side note, you can use the PSLF Help tool to see if they have previously reviewed your employers eligibility. If the Help tool says your employer is likely eligible, it means that someone else has used the same employer and been approved.

      Reply
  4. I worked for an employer that generated electricity for over 40 counties in the state of Florida. The PSLF tool shows my old employer as “not eligible.” Wouldn’t this seem to be a qualifiable employer for the definition and purposes of “performs essential public functions entrusted to it by the state?”

    Reply
    • If the PSLF help tool says that your employer isn’t eligible, it means that someone else has applied from your employer and been denied. However, you are still able to submit an application and they will again review the employer.

      The important detail on your employer isn’t the work performed, instead, it is the structure of the organization. If you work for the government or a non-profit, the work may qualify for PSLF. However, if you work for a for-profit company, you won’t be eligible for PSLF. Sadly, the amount of good you do for the general public isn’t a consideration in Public Service Loan Forgiveness.

      Reply
  5. Hello, My wife made her 120th payment toward forgiveness 1 year ago. We filed her application 11 months ago and we are still waiting to hear a determination on whether her employer qualifies as Public Service. She previously filed several ECF, and they all went through quickly and were certified, but now it appears that her current employer is now in question. We have tried the Student Loan Help Tool, but it hasn’t gotten us anywhere. The loan servicer says that we should just continue to wait. How long is too long to wait? it’s been eleven months. I can’t seem to find anyone else with this same issue. How do I know that my wife’s application has not gotten lost?

    Reply
    • That is a great question. With the new limited waiver, FedLoan Servicing has been especially busy, but 11 months is ridiculously long.

      I’d suggest calling FedLoan Servicing again, because it sounds like something is off. This is one of those situations where talking to a second or third rep might yield better results.

      You should also keep records of the times you have contacted them. If you reach the point where you think they just are not going to do anything, a good next step might be to file a complaint with the CFPB.

      Reply
    • Trent, have you gotten resolution yet?

      I’m in this exact situation waiting for determination of employer eligibility. It’s been in review for almost 8 months.

      I call fedloan almost every week to ask for a status update which is always “your employer is still under review.”

      I’ve filed a complaint with the department of education who seem to just kick it back to fedloan. That tactic got me an email to wait longer.

      I might try the cfpb next. Best of luck.

      Reply

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