PSLF Application Review | Wrenne Financial Planning

The long awaited PSLF application went live late last year! Just in time for the first round of PSLF applicants. We’ve finally started hearing confirmed reports of PSLF forgiveness actually being granted. So it’s officially not a hoax!

This application is a big deal! It’s easily a six figure benefit for thousands of people. Our clientele’s collective PSLF qualified balance is in the tens of millions. Considering what’s at stake, it’s actually surprisingly simple! Here is the low-down on the PSLF application.

Qualifying Employment

You must continue working for a qualified employer until forgiveness is granted. Assuming the approval takes months, technically you must put in more than 120 months. This feels a little unfair – especially for those of you planning to ditch your job as soon as you’re done with it. For this crew, PSLF is really going to lock you into your job for 121, 122 or 123 total payments. So if you’re planning to turn in your notice as soon as possible, wait until you receive the final approval letter.

Part of the application requires that you certify all prior employers over the span of the 120 qualifying payments period. That will be a bear! However, there is an exception: if you’ve already gone through employment verification, those verified periods already count. If you want to make this part easy and avoid unpleasant surprises, verify employment regularly over the 120 payments.

Qualifying Payments

You must choose whether you want to continue to making payments or go into forbearance during the review process. The default is forbearance. If you choose to continue making payments, and you’re ultimately approved, those overpayments will be refunded. This is not a big deal if you’re a lock for approval. However, my prediction is that the majority of PSLF applications will be declined due to being short of the 120 the required qualifying payments. For the people that are declined, it’s always better to keep making payments. For example, if the application is declined due to being one payment short, forbearance causes you to forfeit the valuable extra PSLF payment. Our default suggestion is to always keep making payments. It’s not worth the potential downside.

Preparing for the Application

All in all, it’s fairly straightforward. No really surprises in there. We believe the key to having a smooth approval is keeping your ducks in a row now in the years leading up to this application. And if that occurs, it should be a breeze.

My hope is that all of you perfectly maximize your potential PSLF value. However, based on what we’re seeing, that’s not happening. And so if you’re not 100% sure your maximizing PSLF, or if you are sure but you’d like a second set of eyes to look over your progress, drop us a line or send an email. We’re happy to schedule a no cost initial meeting where we’ll talk high-level student loans. These conversations have been very productive and eye opening for all parties. You can schedule that here.

Either way, best of luck as you approach the big PSLF application day!