In light of the 99% denial rate for the initial wave of PSLF applicants, I thought it would be helpful to confirm exactly what is required to qualify:
Qualified Loans
You must have Direct non-parent Loans to qualify. FFEL, Perkins and Parent loans do NOT qualify! Keep in mind you can sometimes consolidate non-qualified loans to allow them to become qualified.
Qualified Payments
Your payments must be made under one of the income driven repayment plans. These include PAYE, RePAYE, IBR, and ICR.
Qualified Employer
You must also be employed by a qualifying employer while making these qualified payments for them to count toward PSLF. A qualified employer includes 501c3 non-profit, government, and other specifically listed employers. You must be employed full time. Keep in mind many hospitals are qualifying non-profits, however, many physicians that work in those hospitals work for non-qualifying physician sub-groups.
Make 120 qualified payments on qualified loans while working for a qualified employer and you qualify for tax-free PSLF. Once this occurs, you must submit the application. (must still remain employed by your qualified employer) and then they will approve or decline.
This might seem simple on the surface — but if you consider someone that has 20 loans and 120 payments, that’s 2,400 different data points. And maybe they had 5 different employers during this time period. This means they’re responsible for proving all of these 2,400 payments were fully qualified over the 10 year period and 5 jobs.
There is a way to verify status over time. which we highly encourage competing at least annually. At this point, very few borrowers are actually using this optional requirement but hopefully this improves.
What can you do?
If you’re not sure where you stand and would like some help, we’re currently offering a FREE student loan assessment. The assessment will include an organized and simplified visual representation of your loans. It will also highlight, based on your circumstances, the most important issues and opportunities you should be thinking about.