Barbara Hoblitzell, Ian Foss, and Dan Weigle | Dec. 2015 U.S. Department of Education 2015 FSA Training Conference for Financial Aid Professionals Public

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  • Barbara Hoblitzell, Ian Foss, and Dan Weigle | Dec. 2015U.S. Department of Education2015 FSA Training Conference for Financial Aid ProfessionalsPublic Service Loan Forgiveness

    Session 5

  • PSLF Basics**120 Qualifying PaymentsIn Qualifying Repayment PlansWhen Applying For & Receiving PSLFOn Direct LoansWhile Working For A Qualifying EmployerPer IRS, forgiven amount is not taxable income

  • PSLF Eligible LoansFederal Direct Student LoanPSLF is only for Direct Loans, but all Direct Loans qualify Parent PLUS Loans - NOPerkins Loans - NOFFELP Loans - NODirect Consolidation Loan - YES*

  • PSLF Qualifying Employment*501(c)(3) not-for-profit organizationOther not-for-profit organizations providing specific qualifying servicesAny government organizationIt matters where you work, not what you do*

  • PSLF Full-Time EmploymentFull-time is the greater of:Employers definition of full-time30 hours per weekMay work multiple qualifying part-time jobs that equal full-timeFor borrowers at a non-profit organization, hours spent in religious instruction, worship services, or proselytizing do not count*

  • PSLF Qualifying Repayment Plans10-Year StandardIBRICRPay As You EarnREPAYEOthers 10 Year StandardIncome-driven plans are most likely to yield a balance for forgiveness*

  • PSLF Qualifying Payments120 separate monthly payments*After October 1, 2007Do not need to be consecutiveMust be for full amount due under plan

    Must be made within 15 days of due date*Exception for AmeriCorps, Peace Corp, and DOD*

  • PSLF Payment AmountMultiple partial paymentsCount as one paymentAll must be received within 15 days of due datePayments made when not requiredDo not qualifyLump sum paymentsCount as one paymentExceptions for AmeriCorps, Peace Corp, and Department of Defense borrowers*

  • Billy Borrower:Is single with no dependents and lives in GeorgiaHas an AGI of $35,000 that rises at 5% per year and Has $50,000 in Direct Loan debt ($23,000 of which is subsidized), all of which has a 6% interest rateBorrowed for graduate school*Modeling PSLF - Billy Borrower

  • Modeling PSLFICR$22,459IBR$45,065PAYE$55,333Time in Repayment Total Paid Total Forgiven*ICR $0IBR$0PAYE$36,538Time in Repayment Total Paid Total ForgivenWithout PSLFWith PSLFREPAYEREPAYE $0 $51,746

    10 years$50,501

    10 years$36,927

    10 years$24,618

    14 yrs., 8 mos.$76,339

    18 yrs., 9 mos.$91,713

    20 years$71,782

    10 years$24,618

    25 years$108,426

  • Taxation of Forgiveness - IDR**Based on Billys year 20 income of $88,455, 2015 tax brackets, uncomplicated tax filer.

  • Taxation of Forgiveness - PSLF*

  • PSLF Employment CertificationFedLoanServicing determines borrower has direct loansBorrowers who want confirmation that employment and payments qualify should submit the Employment Certification Form to FedLoan ServicingFedLoanServicing determines employment qualifiesAll federally-held loans transfer to FedLoanServicing FedLoan determines qualifying payments were made during employed periodFedLoan determines qualifying payments were made during employed period*

  • PSLF Employment Certification Form*

  • PSLF ECF*

  • PSLF ECF*

  • PSLF ECF*

  • PSLF ECF*

  • Common ECF IssuesInaccurate or Missing End Date on ECF Form Blank end date when the borrower is still employed vs. checking still employedCheck Box 15 to certify accuracyMissing required fields (such as EIN number)

    Payment Tracking Must submit an ECF for an updated qualifying payment countPayments made to other servicers (not just FedLoan) can be counted toward PSLF*

  • *Eligible Loan Types Employer EligibilityAll Federal loans can be eligible through Direct Loan Consolidation.Consolidation and PSLFAppropriate Time to Begin Tracking for PSLF Qualifying Payment PlansCommon Program MisconceptionsQualifying employment for the PSLF Program is not about the specific job a borrower does, but rather, who the employer is. Qualifying repayment plans include all income-driven repayment plans and the 10-year Standard Repayment Plan.Consolidating Direct Loans will erase any qualifying payments made.Borrowers shouldnt wait to submit an ECF until after they have made 10 years of qualifying payments.

  • PSLF PortfolioNumber of borrowers submitting ECF*2015Source: FedLoan Servicing

  • PSLF PortfolioNumber of borrowers with DL & Qualifying Employment*2015Source: FedLoan Servicing

  • PSLF Qualifying Employment*Source: FedLoan Servicing*62%0%38%0%0%Government501(c)(3)AmeriCorpsPeace CorpsOther non-profitApproved ECFs by Employer Type

  • PSLF Processed ECFs*564,325 ProcessedSource: FedLoan Servicing392,571 (70%) Approved171,754 (30%) Denied

  • PSLF Processed ECFs*Denial ReasonsSource: FedLoan ServicingMissing/Incorrect InformationEmployer Not QualifiedNo Eligible Loans44%16%40%

  • PSLF Qualifying Payments*Source: FedLoan Servicing

  • PSLF Qualifying Repayment Plans*Source: FedLoan Servicing

  • PSLF PortfolioAmount borrowed by borrowers who had employment and loans certified for PSLF*Source: FedLoan Servicing

  • PSLF PortfolioAnnual adjusted gross income of borrowers who had employment and loans certified for PSLF*Source: FedLoan Servicing

  • PSLF School Resources*Borrower Toolkits for outreach to student borrowers at MyFedLoan.org/schoolsReporting AvailableCustomized e-mail communications showing the number of borrowers for your institution who have submitted an Employment Certification FormStudent detail information through the FedLoan Servicing School PortalTraining resources and personalized support at MyFedLoan.org/trainingPresentation available for downloadSector-based, personalized support

  • QUESTIONS?

    Visit StudentAid.gov/publicservice for more information about PSLF.*

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