Sweeping changes to Public Service Loan Forgiveness (PSLF) are here. This resource unpacks how HR and benefit leaders at nonprofit hospital systems can navigate new employer requirements for PSLF.Schedule an information session
This guide will be updated as more information is released. Last updated 1/25/22.
If you’ve ever found yourself scratching your head about Public Service Loan Forgiveness (catch our complete guide for HR leaders here), you’re not alone. And your employees have likely had similar thoughts. The rigid nature of the program coupled with incorrect guidance and buried information has left many eligible borrowers missing out on the opportunity to have their loans forgiven after making 120 qualifying payments.
In particular, it can be challenging for your employees to determine whether or not employment makes them eligible for PSLF. There’s also confusion around the type of job borrowers need to hold as well as what it means to work “full-time.” From administrative workers to nurse practitioners and doctors, there is an opportunity to guide your employee population through these changes.
As an HR leader, we know you have a lot on your plate. This guide will help you make sense of PSLF employment requirements and eligibility so your employee population can get back to their meaningful work and achieve loan forgiveness, leading to greater retention and morale.
Given that the government has strict qualifications for nonprofit hospitals, you may think only certain types of jobs are eligible for PSLF. Thankfully, that’s not the case. Any job works; the only requirements are that the employer is eligible for PSLF and that your employees are full-timeFor example, let’s say your employees work in office administration full-time. This would qualify for PSLF.
So, what counts as full-time? The Department of Education considers employees to be a full-time employee if they work at least 30 hours a week or meet their employer’s definition of full-time—whichever amount is greater. Employer-provided vacation and leave time also count toward your hours as a full-time employee. This means if your employees take family leave or temporary medical leave, as permitted under the Family and Medical Leave Act, they will still be recognized as a full-time employee.
All of this is pretty straightforward if your employees are able to satisfy the full-time employment requirement through a single employer. But don’t worry if they’re working part-time: as long as they work a combined minimum average of 30 hours per week through part-time jobs at qualifying employers, you’re still eligible for the program.
Under PSLF, borrowers who make 120 payments while working full-time for a qualifying employer will have the remaining balance of their Direct Loan(s) forgiven. These payments need to be made on a qualifying repayment plan for the full amount—no more, no less—and no later than 15 days after the due date in order to count, but they do not have to be made consecutively.
If your staff is eligible, the onus is on them to certify their employment in order to get credit for their loan payments. The certification process is straightforward: your employees fill out the PSLF form—which they can easily access online through Summer—with details about their employment, you and your employee both sign the form, and then they submit the form to the Department of Education. Once your form is approved, the Department of Education will give your employee a specific count of the number of qualifying loan payments they’ve made toward the 120 total required for forgiveness.
Certification isn’t limited to current employers. Your employees can and should do this for previous employers too. PSLF launched in October 2007, so your employees can certify any qualifying employment they’ve had since then. (If their employer has since closed, they can still certify; the Department of Education may ask for more documentation to confirm.) Generally speaking, we recommend certifying employment annually and anytime your employees change jobs.
Lastly, the Department of Education issued a limited waiver that expands the type of payment that qualifies under PSLF—but this expansion only lasts through October 31, 2022. So if your employees made partial, late, or excessive payments in the past while working for an eligible employer, they should certify their employment so that the department can count those payments. It can take the department some time to process paperwork, so we recommend submitting those forms as soon as they can.
We know your list is long enough before year-end, but we're here for you. Book time with our team to better manage PSLF in the new year.
More information on PSLF changes will continue to be announced in the coming weeks and months, including changes to streamline the application process. The long term structural proposals will take longer to be approved and implemented, and will probably undergo changes in the rulemaking process. The good news is that things are moving in the right direction to make student loan forgiveness easier and more accessible to borrowers and their employers.
Complete the form below to schedule a no-obligation information session with one of our specialists on how Summer can help your organization manage PSLF digitally, including navigating employer requirements.
Book time with a Summer specialist on how Summer can help your organization manage PSLF digitally.