Lump Sum and Prepayments Will Now Count Toward Borrowers’ PSLF Progress, FSA Announces

By Owen Daugherty, NASFAA Staff Reporter

Lump sum and prepayments made to qualifying federal student loans from here on out will now count toward Public Service Loan Forgiveness (PSLF) qualifying payments for borrowers enrolled in the program, Federal Student Aid (FSA) announced Monday.

Prepayments toward PSLF will count for up to 12 months, or until the next time payments are due to recertify for a borrower's income-driven repayment (IDR) plan, whichever comes first, FSA stated in the announcement.

The move is a welcome one from the financial aid community and is supported by NASFAA, which previously advocated for allowing lump sum and prepayments to count toward borrowers’ PSLF progress.

“We heard you, and we’ve made improvements to allow lump-sum payments to count for future months toward PSLF,” FSA wrote in a post on Twitter. 

The announcement Monday is part of a larger overhaul to the PSLF program, which the Department of Education first unveiled in late October. As part of the overhaul, FSA developed a revamped PSLF help tool so borrowers will have an easier time determining eligibility for the program and tracking their payment progress. The updates to the PSLF help tool went live last month.

Borrowers who have used the tool before will also now be able to see a history of their submitted employment information, more easily track their payments, and have access to a customized table of borrower loan information and a personalized review of possible next steps to gain eligibility for loan forgiveness. 

Additionally, FSA touted the launch of a new, single PSLF form — also announced in October — that combines the application and employment certification forms, which also went live last month.

The single form will cover applications for both the PSLF program and the Temporary Expanded PSLF (TEPSLF) program.

“We hope this will reduce confusion and frustration, especially for borrowers seeking forgiveness under TEPSLF, who will no longer have to be denied for PSLF then email the PSLF servicer for separate consideration,” FSA said in the announcement.

FSA also clarified that it will still accept the Employment Certification Form (ECF), the PSLF application, and emailed requests for consideration for the TEPSLF opportunity now that the single form is available.

“We know it may take some time for the new form to be distributed and adopted by all the organizations that help borrowers — including employers — navigate PSLF,” FSA said.


Publication Date: 12/15/2020

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