In this week’s mailbag, we got an interesting question from a reader who formerly worked for the government and wants to know if any of that time could be credited towards Public Service Loan Forgiveness. If you have a question for the Sherpa, feel free to send an email.
From the mailbag:
I previously worked for the government from 2008-2013. During that time, I was repaying my federal loans. Since I was not enrolled in the Public Interest Repayment Plan, is that time lost, and it will not count towards ten years of public service? Thanks!
The answer to this question is maybe. It is possible that previous employment can be applied towards the 10-year requirement of public service, but it depends on several different factors.
Public Service Qualification Basics
For starters, we should point out that there is not a “Public Interest Repayment Plan,” nor is there a requirement to formally enroll in the program before your 10-year clock starts.
The easiest way to look at Public Service Loan Forgiveness (PSLF) is that it has three basic requirements. Borrowers who do the following will get credit towards PSLF:
- Enroll in an eligible repayment plan (such as IBR, PAYE, or REPAYE),
- Work for an eligible employer (such as the federal government or a 501(c)(3) charity), and
- Have eligible federal loans (some federal loans are only eligible if consolidated into a federal direct loan).
As long as these basic requirements are met, even if you no longer work for your old employer, it is still possible to get credit for your time at your old job. For more detailed information on what constitutes an eligible repayment plan, eligible employer, and eligible loans, be sure to check out our in-depth article on qualifying for Public Service Loan Forgiveness.
Certifying Eligibility Criteria
To document that you met the requirements of PSLF, an employer certification form must be completed. The employer certification form can be found here.
The purpose of the form is to have your employer certify that you were working for them full time and that they meet the definition of a Public Service Employer. Your employer will also certify the months that you were employed.
Once the form is submitted, your loan servicer will then check their records of loans and payment types. The servicer will verify whether or not your loans are eligible and whether or not your repayment plan was eligible.
The end result of the process is that the borrower receives a document certifying how many of the 120 required months they have towards PSLF.
Some borrowers who were unaware of the Public Service Loan Forgiveness program may still be able to qualify if they happen to meet the requirements. Others, including those who thought they were doing everything right, may not be as lucky. Our research has found that nearly 1 in 3 employer certification forms are rejected.
Historically, there has been no remedy, short of filing a lawsuit, to resolve these rejections.
Surprisingly, a recent spending bill that went through Congress had a special provision for borrowers who missed one of the requirements for PSLF. The bill set aside $350 million for these borrowers. Borrowers who were on the extended or graduated repayment plans may be able to get their prior employment to count even though they were not technically on an eligible repayment plan. (Note: the legislation does not help people who didn’t have eligible loans, it is only a fix for certain ineligible repayment plans)
Borrowers who think they might benefit should apply quickly as eligibility is on a first-come, first-serve basis.
Bottom Line: It is Worth a Try
Prior employment can count towards Public Service Loan Forgiveness without any formal enrollment. The only way to see where you stand is to send in an employer certification form.