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The Limited Waiver On PSLF Expired, But FFEL Borrowers Can Still Benefit

Even though the October 31, 2022, deadline has passed, Public Service Loan Forgiveness Borrowers can still take advantage of many of the Limited Waiver provisions.

Written By: Michael P. Lux, Esq.

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If you missed the deadline for the Limited Waiver on PSLF, there is still time to take advantage of many of the best perks.

Another temporary program, the Income-Driven Repayment Account Adjustment, is still alive. Within the fine print of the IDR Count update, PSLF borrowers can find considerable help.

What was the Limited Waiver?

Broadly speaking, the Limited Waiver was created to fix many problems plaguing the PSLF program.

Many borrowers had ineligible loans or enrolled in the wrong repayment plan. Worse yet, at times, servicers mistakenly told these borrowers they were on track to earn Public Service Loan Forgiveness.

The Limited Waiver allowed PSLF borrowers to increase their certified payment history and potentially earn forgiveness. It even helped borrowers with dreaded FFEL loans consolidate their debt without losing progress toward forgiveness.

Sadly, the Limited Waiver program expired on October 31, 2022. It was not extended or renewed.

IDR Account Adjustment Basics

The IDR Account Adjustment was created to help a larger group of federal student loan borrowers.

Here again, it is a temporary program created to correct errors of the past. In this case, servicers advised many borrowers to use a deferment or forbearance when they would have been better off if they had signed up for an IDR plan. Similarly, other borrowers were enrolled in a balance-based repayment plan, such as graduated or extended repayment, when they could have signed up for an IDR plan and made progress toward loan forgiveness.

The IDR Account Adjustment will review a borrower’s repayment history.

The following periods will now count toward IDR forgiveness progress:

  • any months in a repayment status, regardless of the payments made, loan type, or repayment plan;
  • 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance;
  • months spent in economic hardship or military deferments after 2013;
  • months spent in any deferment (with the exception of in-school deferment) prior to 2013; and
  • any time in repayment on earlier loans prior to consolidation of those loans into a consolidation loan.

Note: this program is backward looking. Borrowers who are on a forbearance, deferment, or ineligible plan in the future will not earn progress toward IDR forgiveness.

What about the Covid-19 payment and interest freeze? Borrowers who did not have to make payments during the Covid-19 relief program will still receive credit towards IDR forgiveness for this time. Those working in a PSLF job can also receive credit towards PSLF forgiveness.

The One-Time IDR Account Adjustment for PSLF Borrowers

Things start to get interesting when we examine how the IDR Account Adjustment Applies to PSLF Borrowers.

Most notably, the Department of Education says that:

  • If you have applied or will apply for PSLF, these changes may have an impact on you by increasing your qualifying payment count.
  • If you have 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance, you will receive PSLF credit for those periods of time if you certify qualifying employment.
  • These changes will be applied automatically to all PSLF-eligible Direct Loans, including consolidated and unconsolidated parent PLUS loans. If you believe you might benefit, you should update your employment certification history to reflect all periods of public service employment.
  • Borrowers with commercially or federally held FFEL loans who consolidate those loans into Direct Consolidation Loans before the account adjustment is applied will also get PSLF credit.

I’ve bolded the essential detail for FFEL borrowers. Consolidation is still an option to get PSLF credit for loans that are otherwise not eligible for PSLF.

The critical requirement is that the account adjustment deadline doesn’t get missed.

The Account Adjustment Deadline

The IDR Account Adjustment deadline has already been moved a couple of times. Fortunately for borrowers, the deadline keeps getting pushed back.

Borrowers now have until June 30, 2024, to consolidate their FFEL loans.

The Department of Education expects to complete the update in early 2024.

Next Steps for Borrowers

Consolidating FFEL Loans is a big decision. It is also something that cannot be undone once it is finalized.

Thus, it’s a good idea to talk to your servicer to discuss your plans to ensure you are not missing something.

For borrowers interested in PSLF, there are two big steps:

  1. Document that you work for a PSLF-eligible employer.
  2. Consolidate long before the June 30, 204, deadline.

The Department of Education requires borrowers to apply for consolidation before the end of 2023. However, consolidation is a process that can take weeks to finalize, and if you wait until the last second, you increase the odds of having glitches or errors to resolve.

Consolidation Risks for FFEL Borrowers

In most cases, consolidating before the end of 2023 will be the smart move for FFEL borrowers.

However, there are a couple of potential landmines to watch:

First, some FFEL borrowers have FFEL consolidation loans. These FFEL consolidation loans sometimes have premium interest rates attached to the loan. If the borrower consolidates into a federal direct loan, the interest rate reverts back to the original rate. However, if you get your loans forgiven via PSLF, the interest rate doesn’t really matter. Sadly, not all borrowers will earn PSLF forgiveness. If you end up having to pay off the loans in full, you might want to stick with your premium interest rate.

Second, at this time, we have no idea what is happening with the one-time forgiveness program of up to $20,000 per borrower. We don’t know how the Supreme Court will rule, and we don’t know how the ruling might impact FFEL borrowers. Thus, it is impossible to say how consolidating now might affect the one-time forgiveness program.

Final Thoughts

This likely represents the last chance for FFEL borrowers to consolidate their loans without losing progress toward IDR forgiveness or PSLF.

Making sense of the temporary rules and understanding these programs isn’t easy. However, they are an incredible opportunity to get massive amounts of debt forgiven.

Investigating your options is almost certainly time well spent.

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.

6 thoughts on “The Limited Waiver On PSLF Expired, But FFEL Borrowers Can Still Benefit”

  1. Hi Michael –

    My wife took out a number of Parent PLUS loans, including one in August 2018 and one in September 2018. Those loans were consolidated in November 2018. That consolidated loan was later consolidated with a February loan (which itself was a consolidated loan). The final double-consolidated loan was disbursed in April 2019.

    MOHELA lists the August and September loans as having entered repayment those months; but the first qualifying payments (via a special waiver) for the double-consolidation loan after the August loan isn’t until November. Would the current account adjustment period allow for the months of August, September, and October to be treated as “qualifying payment months”?

    But wait – there’s more! For some reason, MOHELA is also listing __February to May of 2018__ as qualifying (via the special waiver) – even though that time period predates any of the loans that ended up being part of the double consolidation. (My wife took out some other Parent PLUS loans earlier that year and in prior years, but those were not part of the 2018-19 academic year double consolidation. What’s your best guess? Data entry errors? (I did find several incorrect dates – off by several years – in some of MOHELA’s records (inherited from FedLoan).)

    Any insight or suggestions would be welcome. Thanks.

    • There is a ton going on here, so I really can’t say anything for certain without looking at your account myself.

      A data entry error is definitely a possibility with all the consolidations on her account.

      The one insight I would add is that the one-time IDR account adjustment has not happened yet. Some of the borrowers who have enough payments with the adjustment had their IDR counts updated right away, but the rest of us will have to wait until 2024 when they make the adjustment for everyone else. In other words, your wife’s qualifying payment months may jump when the adjustment happens for her.

  2. Hi Michael, On behalf of all of us confused PSLF borrowers, thank you so much for shedding some light on the topic of PSLF forgiveness and the one-time IDR account adjustment. After finally speaking with a trained employee at Mohela, I got the confirmation that most PSLF borrowers who have reached forgiveness thanks to the IDR account adjustment should by now (August 2023) have already been contacted about the discharge of their student loans. However, what was less clear was how the number of qualifying payments are counted, particularly for PSLF in conjunction with the one-time IDR account adjustment. I have acquired 7 years of PSLF qualifying payments working for a nonprofit hospital and prior to this, I have also accumulate 3 years of IDR-qualifying forbearance working as a medical resident in a for-profit hospital. Can both periods be added together to obtain the 10-year PSLF forgiveness? In other words, under the special IDR waiver, can IDR-qualifying months be added to PSLF-qualifying months to reach the 120 months required for PSLF forgiveness, even if the IDR period was not acquired through a PSLF employer? Or, is a consolidation of all my direct loans necessary to benefit from the IDR waiver?

    • This is a tricky one, and I want to make sure I understand your questions correctly.

      The way I understand it, you have 7 years of qualifying employment. If this has already been certified, that means you need three more years (or, more specifically, 36 payments).

      The three years as a medical resident for a for-profit hospital likely do not count as a for-profit hospital wouldn’t be a PSLF-eligible employer. (that said, it doesn’t hurt to try to get it to qualify… the worst they can say is no.)

      The IDR adjustment will help with many aspects of qualifying for PSLF, but the one thing it can’t fix is employer eligibility. If you are not working or not working in a public service job, that time won’t count toward PSLF.


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