Biden government introduced the PSLF Payment Completion Fairness Act to remove restrictions on 120 months of employment under a qualifying employer to receive student loan forgiveness. Two US Senators- Mike Braun (R-Ind.) and Bob Menendez (D-N.J.) and two US Representatives- Brian Fitzpatrick (R-PA) and Chrissy Houlahan (D-PA) sponsored the bill.
The bill’s objective is to reduce the burden of student loans on public servants who serve the communities without fail. All four lawmakers felt that public servants have earned the right to government benefits.
In addition to the US Congress, this student loan forgiveness bill also got support from the American Federation of State, County and Municipal Employees; the American Federation of Teachers; Fraternal Order of Police; and the International Association of Firefighters.
Clauses of PSLF
The PSLF program in the US is a federal program that forgives the remaining student loan balance for borrowers who work full-time in public service jobs. Here are the key clauses of the PSLF program:
- Employment in a qualifying organization: Borrowers must be employed full-time by a qualifying organization, which includes government organizations (federal, state, local, or tribal), not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, and other types of not-for-profit organizations that provide qualifying public services.
- 120 qualifying payments: Borrowers must make 120 qualifying monthly payments on their Direct Loans. They must do so while working full-time for a qualifying employer. Borrowers must repay loans on time (within 15 days of the due date) and for the full amount due. Partial payments or payments made during a grace or deferment period do not count as qualifying payments.
- Certification and documentation: Borrowers must produce an Employment Certification Form (ECF) annually or whenever they change employers. This form verifies their employment and helps track progress toward the 120 qualifying payments. They have to submit ECF each year to ensure accurate record-keeping.
- Loan forgiveness application: After making the required 120 qualifying payments, borrowers must submit the PSLF application to request loan forgiveness. Beneficiaries must submit the application after completing the 120 payments. However, they can also submit the loan earlier to track progress or address any potential issues.
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