Determining how often or when you need to submit PSLF paperwork is tricky.
This is one instance where the minimum requirements under the rules and the best practices are dramatically different.
This article will cover the technical requirements for employment certification and explain why a greater frequency is an excellent idea. I’ll also share a shortcut to simplify the PSLF paperwork.
The Technical Requirement: Only One PSLF Application is Required
Let’s start with the basics. Under the Public Service Loan Forgiveness (PSLF) rules, borrowers don’t need to submit paperwork until their ten years of the program have been completed.
However, waiting until the last second is a terrible idea. In fact, there is a good chance that your application will be denied, and your prior decade of work will not count. This is the sort of mistake that is life-changing. The cost could be well over $100,000, depending on your debt levels, and it could mean retirement is delayed or never happens.
Sherpa Tip: Waiting the full ten years can also mean that you have to work in the PSLF for some extra time. To qualify for PSLF, borrowers must be currently employed by a PSLF employer at the time they submit their application and at the time forgiveness is granted.
Waiting until the last second can delay your retirement or switch to the private sector. Worse yet, a mistake might mean you don’t qualify, even though you have made 120 certified payments.
What Makes the PSLF Documents so Important?
On the surface, the exact timing isn’t a big deal. It is just an employer certifying that their employee is working full-time in a public service position. Waiting a few months or even years to sign this simple form sounds harmless.
In reality, the value of documenting your work comes from the review that it triggers. When a borrower submits their PSLF application, the servicer updates the borrower’s count of certified payments. For a payment to be certified, the borrower needs to be at an eligible employer, but they also need to have eligible student loans and be on a qualified repayment plan. When the paperwork is submitted, the loan servicer performs a comprehensive review of the borrower’s account. If any of these eligibility requirements are not met, the time will not count.
Many borrowers mistakenly think they are on an eligible repayment plan. Some learn the hard way that they should have consolidated their loans first. Others believe they are on a qualifying repayment plan, but they are not. Outside of a limited, temporary fix, there is no way to correct these mistakes after the fact.
A borrower who waits ten years to submit jeopardizes all of that work. I’ve personally heard from many borrowers who had their servicer tell them they were on the right track but learned years later that they were not. Even though the servicer gave terrible advice, these borrowers are stuck starting from scratch on PSLF.
Completing the employer certification form is the best way to verify that you are making progress towards PSLF. Anything less is guessing and hoping.
The Best Practice: Why You Should Send in PSLF Paperwork Yearly
Despite its importance, it is easy to let sending in an employer certification fall through the cracks. Making submission a yearly habit ensures that any PSLF issues are quickly identified.
There are two times when there is a natural reminder to complete your PSLF records.
- Tax Season – Most Americans fill out their tax returns at the same time every year. Student loans are an important consideration at tax time. Completing the PSLF update adds one extra government form that needs to be filled out and filed during your tax prep.
- Income-Certification – The income-driven repayment plans that qualify for PSLF all require yearly income certification. When you certify your income, it makes sense to certify your employer at the same time.
Other Times to Submit a PSLF Application
In addition to the yearly submission of your employment, there are a few circumstances where immediately completing an application is smart.
- Starting a New Job – If you move to a new employer, you want to find out right away if that employer is eligible for PSLF. After a month or two on the job, complete the PSLF form and mail it in. Certifying just two months of work may not be much, but knowing that future months will count is a considerable value.
- Leaving Your Old Job – If you are about to change employers, it is essential to complete PSLF paperwork. The more time that passes, the harder it will be to complete. Getting help from HR is much easier when you work in the same office.
- Getting Married – This is especially important if marriage involves a name change. This is one of those things that shouldn’t make a difference, but because federal servicers are prone to making errors, it is a good idea to make sure that you don’t lose any progress.
- As You Near 120 Payments – Many borrowers don’t realize that 120 certified payments aren’t enough. The borrower must be employed by a PSLF employer at the time they apply for forgiveness and at the time the loans are forgiven. If you time things right, you won’t have to extend your term of employment to accommodate servicer processing times.
How Do I Find the Right Employer Certification Form, and Where Do I Send It?
The latest version of the PSLF Application can be found here.
Once the form is completed, borrowers should mail it to the following address:
U.S. Department of Education
633 Spirit Drive,
Chesterfield, MO 63005-1243
Before mailing in the form, I suggest keeping a copy on file at home. If the form gets lost or destroyed, having a copy is easier than trying to recreate the document from scratch.
Borrowers who already have their loans serviced by FedLoan Servicing can upload the PSLF form directly to MOHELA. Borrowers can also fax a completed form to 866-222-7060.
However, the best way to go through the application process is to use the PSLF Help Tool from the Department of Education. This shortcut will automatically generate the proper form, help borrowers identify eligible employers, and guide borrowers through the submission process.