PSLF Non-Payments Count for Trump’s Executive Order

On August 21, 2020, Secretary DeVos has “directed Federal Student Aid (FSA) to extend the student loan relief to borrowers initiated by the President and Secretary in March 2020 through December 31, 2020.” This means that borrowers will continue to receive the same COVID-19 relief as earlier until December 31, 2020.

Under this continued relief, everyone’s loans will be automatically suspended until 2021 at a 0% interest rate. “All borrowers with federally held student loans will have their payments automatically suspended until 2021 without penalty. In addition, the interest rate on all federally held student loans will be set to 0% through the end of the calendar year. Borrowers will continue to have the option to make payments if they so choose.”

What’s new is the relief for PSLF: All those non-payments while still working at a PSLF-qualifying employer will still count towards PSLF. “Non-payments by borrowers working full-time for qualifying employers will count toward the 120 payments required by the Public Service Loan Forgiveness program and as payments that are required to receive forgiveness under an income-driven repayment plan.”

This is exciting news because Trump’s executive order did not detail the effect on PSLF. We were hoping the PSLF non-payments would qualify still and now we have confirmation that they still qualify for PSLF. Keep in mind, if you no longer work for a PSLF-qualifying employer at a full-time rate, then your non-payments won’t qualify for PSLF. This only works if you are still employed at a PSLF-qualifying employer.

Want to read the release? Click here.

If you have any questions, let us know! Always check with your loan servicer or the Department of Education for updated information. We’ll try our best to keep you posted.

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