News & Updates

The Department of Education recently finalized regulations regarding student loan repayment plans and borrowing limits. The final rule goes into effect on July 1, 2026. Certain regulatory provisions mean that some borrowers may want to change their Income-Driven Repayment (IDR) plan prior to July 1, and others may want or need to change their plan after July 1. Read on for details and how to apply, and remember: all IDR plans qualify for 10-year PSLF, and switching IDR plans doesn’t not impact your PSLF eligibility.

PAYE

Pay As You Earn (PAYE) is an existing IDR plan that is expiring in 2028. For borrowers who borrowed their first loan after July 1, 2014, PAYE is the same as Income-Based Repayment (“New IBR”). But for those who first borrowed loans prior to July 1, 2014, PAYE has a more favorable formula than “Old IBR.”

The new regulations suggest that after July 1, 2026, PAYE enrollments will be limited to those who were enrolled in PAYE on July 1, 2024 and have not switched out of PAYE in the meantime. That means borrowers who have never been in PAYE, or were in PAYE but switched to SAVE, will lose access to PAYE this July.

For pre-July 1, 2014 borrowers, PAYE is likely the least expensive plan. Pre-2014 borrowers enrolled in IBR or SAVE may want to apply for PAYE before the July 1, 2026 deadline to enroll.

RAP

The new Repayment Assistance Plan (“RAP”) is launching July 1, 2026. The plan uses a different formula than IBR and PAYE, requiring monthly payments between 1-10% of your AGI. RAP could result in higher or lower payments depending on your income, marital status, tax filing status, and family size.

RAP also has an interest subsidy provision that waives unpaid interest each month, preventing your loans from growing. But, RAP’s non-PSLF forgiveness term is 30 years compared to IBR and PAYE’s 20-to-25 year terms. Those interested in RAP can check their estimated payment on studentaid.gov once the plan launches.

SAVE

SAVE is ending. Borrowers still enrolled in SAVE can expect to receive notices requiring them to change plans within 90 days starting July 1. SAVE borrowers can enroll in PAYE or ICR (before July 1, 2026), RAP (after July 1, 2026), or IBR (anytime). Borrowers who don’t pick another IDR plan by their 90 day deadline will be placed into the Standard repayment plan, which often has much higher payments.

Recertifications

Recertifications are finally coming due this year for the first time since 2019 for some folks. If you haven’t submitted a new IDR application in years, you may see a drastic increase in your monthly payment (which would have been more gradual had annual recertifications been required). Be prepared and use a calculator to start budgeting now.

Your loan servicer should reach out about your recertification deadline. You must recertify within 35-90 days before your plan ends, or else be moved into the Standard repayment plan.

Applying / recertifying / changing your IDR plan

You can apply for or manage your IDR plan on studentaid.gov/idr. To determine what your monthly payment will be under each plan, simply start the application, authorize IRS data retrieval (Step 4) so the Department of Education can pull your AGI from your latest tax return, and then look at the plan estimates (Step 5). If you’re just curious or preparing for the future, you do not have to submit the application (Step 6) and can use it just as a calculator tool.

Need a refresher on the IDR application?

• You can select “No, take my loans out of deferment or forbearance” to get your IDR application processed as fast as possible.
• Allow for IRS data sharing and don’t upload additional income documentation for faster processing.
• It’s ok if your IDR plan is based on a lower income from your tax return. If you’re doing PSLF, you don’t want to provide current income information unless your income has decreased.

Head’s up to those enrolled in IBR

Switching plans results in unpaid interest capitalization (unpaid interest gets added to your principal balance, which results in more interest accruing in the future). When comparing plans, consider not only the monthly payment but the interest capitalization, the non-PSLF repayment term if applicable, and how close you are to forgiveness.

IDR updates

The SAVE plan is officially ending. Starting July 1, borrowers enrolled in SAVE will have 90 days to enter a new IDR plan or be placed into the (usually unaffordable) Standard Repayment Plan. Borrowers have a few options:

• If you’re in PSLF-qualifying employment and ready to make payments, you can apply to change your IDR plan now. All of the existing IDR (IBR, PAYE, ICR) options qualify for PSLF, so choose the plan with the lowest monthly payment. PAYE and ICR will phase out in 2028 but no action is needed now.

• The new Repayment Assistance Plan (RAP) is set to launch July 1, 2026; the plan uses a different formula than the existing plans and will waive any unpaid interest each month after your due date. Since RAP hasn’t launched yet, it’s not on studentaid.gov, but you can use this IDR calculator to estimate your payments. If you’re in SAVE and interested in RAP, it’s your choice whether to enter an IDR plan now and then switch to RAP in July, or just wait it out a few more months.

• If you’re not in PSLF-qualifying employment or can’t make payments right now, you can continue to ride out the SAVE forbearance until it ends in September. Make sure to choose a new plan before the 90-day deadline. If you are experiencing economic hardship, you can recalculate your monthly payment using your current income (which may be $0) or request a forbearance from your servicer.

PSLF updates

Litigation is still ongoing in the actions challenging the Department of Education’s rule to restrict PSLF for organizations engaged in “illegal activities.” (See, e.g., here, here, and here.) We’ll keep you posted once we know more.

The Dep’t continues to provide monthly status updates about IDR, PSLF, and PSLF buyback processing. In February, the Dep’t processed 330,000 IDR applications, with 575,000 outstanding. The Dep’t processed 2,500 PSLF buyback applications, with 88,000 outstanding. And the Dep’t processed 13,000 PSLF discharges.

If you are waiting on a buyback application and can continue making IDR payments, it may be best to do both simultaneously to see what comes first: your buyback application getting processed or you finishing out 120 regular IDR payments. Buyback application processing is slow. Note that if you make over 120 payments you’ll receive a refund, and/or your buyback agreement will take into account the additional payments you’ve already made.

Check your account

It’s a great time for a spring student loan check in! Here’s what we recommend:

On your servicer’s website

• What’s your loan status?
  • In repayment: scheduled, payment due, in repayment
  • Not in repayment: no payment due, forbearance, deferment, grace period, in school

• Is your payment amount as expected? Is your auto pay working? Do you have anything past due?
  • If you have auto pay it may say you have $0 due but also that “your auto pay amount of $xxx.xx will be transferred from Bank Acct *xxxx on xx/xx/xxxx.” That’s normal!

• What repayment plan are you in, and when does it end?
  • For most servicers, go to menu –> more –> tools & requests –>printable account information. Look at your “current payment plan,” “schedule begin date,” and “schedule end date.” You must recertify your IDR plan 35-90 days prior to the scheduled end date to continue in IDR (and avoid the potentially very large payment listed underneath your current one–which is not real if you continue in IDR!).

• Is anything amiss?
  • Contact your servicer.
  • If your servicer doesn’t help, reach out to FSA or your state’s financial protection agency (see, e.g., California, New York, DC).

On studentaid.gov

• How’s your PSLF progress?
  • Go to my loans –> PSLF payments. The first page should show how many qualifying payments each of your loans have. Is this number less than expected? Let’s check the details. Change to the “Payment History” tab. Use the filter to select a single loan. Then, filter by payment status.

• • • QUALIFYING means you made an IDR payment or were in a qualifying administrative forbearance, working in PSLF-qualifying employment, and have certified your employment by completing a PSLF Form capturing that month.

• • • EMPLOYMENT NOT CERTIFIED means this month can qualify for PSLF but you have not yet certified your employment by completing a PSLF Form capturing that month. These months don’t get added to the “qualifying” tally until then; given that the best practice is to submit a PSLF Form annually, you will always have up to 12 payments that are not counted yet but will be the next time you submit a form.

• • • INELIGIBLE means this month does not count toward PSLF, likely because you were in a forbearance, deferment, grace period, or in school. This month will not convert to qualifying even if you submit a PSLF Form. However, certain forbearances can qualify for the PSLF Buyback. Recall that many people were in ineligible forbearances starting in spring 2024 because of SAVE, servicer transitions, and pending IDR applications.

• • When are you eligible for PSLF or the PSLF Buyback?

Action items

Shutdown

The Dep’t of Ed continues to operate during the government shutdown, but there is a reduction in force. All applications and customer service functions are still up on studentaid.gov, but processing times could be slower than usual.

If you’re affected by the shutdown, there are steps you can take to reduce or eliminate your student loan expenses. You can apply for an immediate recalculation of your IDR plan, indicating your income has decreased. If you’re earning $0 at the moment (and don’t have other income sources or file taxes jointly with a spouse who has income), you can get a $0 IDR plan for a year. You could also contact your servicer to request a forbearance or deferment. Forbearance and deferment do not qualify for PSLF, so reducing your IDR payment is the recommended option.

Litigation updates

SAVE litigation is still ongoing, with no major updates. If you’re enrolled in SAVE, you’re in a forbearance that doesn’t qualify for PSLF and does accrue interest. Months spent in forbearance can be converted to PSLF-qualifying at the end of your 120 months of qualifying employment via the PSLF buyback. If you’re ready to resume payments, apply for a different IDR plan on studentaid.gov/idr, making sure to link a tax return for quicker processing.

Earlier this month there was an update in the AFT v. ED case. The Dep’t of Ed is ordered to continue processing IDR 20-25 year forgiveness discharges and PSLF buyback applications, and to provide monthly status reports about IDR applications, PSLF buyback applications, and PSLF discharges.

PSLF

The Department of Education continues to process PSLF applications. It’s expected that they will submit a final rule regarding disqualifying certain organizations engaged in “illegal activities” by November 1 for an effective date of July 1, 2026. We’ll keep you posted as that develops.

Payment tips

We’re seeing a lot of issues with returning to payments post-forbearance, particularly with MOHELA. We recommend everyone–especially borrowers who have recently returned to repayment–log into their servicer’s account and check:

• That you’re enrolled in autopay (you may have been unenrolled during the forbearance), or that you’re logging in each month to make manual payments.

• That your loans are in the correct status (unless you’re in forbearance, you want your status to be “in repayment” or “scheduled”). If your loans are in “forbearance” or “no payment due” and you don’t understand why, contact your servicer.

• That you’re making monthly payments in the correct amount. Check your Recent Payments or Account History. If you’re past due, your payments aren’t coming out, or you’ve unintentionally made multiple payments, contact your servicer.

• Sometimes your account will say $0 is due if you’re enrolled in autopay, even if your payment is more than $0.

• If you need to contact your servicer, try calling them right when their phone lines open (see MOHELA’s contact info). You can also send them a message (for MOHELA, go to Menu –> Inbox –> Email us). Surprisingly, they do respond.

• Sometimes your servicer will not send you notices of payments being due, past due payments, or that they’ve responded to your inquiry. We advise periodically logging in to check that everything is ok.

• It’s looking like it can take an additional few months to pull someone out of forbearance, even after they’ve been approved for an IDR plan. It can also take a month for autopay to kick in. If you’ve been approved for a plan but payments are not due as expected, check your Printable Account Information (Menu –> More –> Tools & Requests) under “Estimated Payment Schedule.” The schedule begin date should reflect the next time you have a payment due. 

Consider submitting a new IDR application if…

• You have a pending IDR application submitted before May 2025

• Your pending IDR application was submitted via PDF / paper, or you provided additional income information beyond a tax return

• You selected SAVE or “lowest monthly payment” / “choose for me” in your pending IDR application (see this article–all of these folks are going to get auto-denied)

• You’re still enrolled in SAVE and are ready to resume making payments

IDR application tips

• Head to studentaid.gov/idr

• Choose either “apply for an Income-Driven Repayment Plan” (if you aren’t yet enrolled) or “Recertify or Change your [IDR] Plan.”
  • In SAVE or otherwise want to switch your plan? Click “Switch my current plan.”
  • “Recalculate” means staying in the same plan but seeking to lower your monthly payment because of new income or family size information.
  • “Recertify” means your annual income recertification.

• Choose “take my loans out of deferment or forbearance” to have your application processed as soon as possible.

• Authorize IRS data sharing to automatically link your latest tax return. This is the fastest way to get your IDR application processed.
  • The only reason to upload additional income information is if your income has decreased since your last tax filing. Uploading additional income information typically slows down processing.

• All of the IDR plans qualify for PSLF. The plans that are open for enrollment are IBR, ICR, and PAYE. Not everyone will be eligible for all plans. For PAYE and IBR, you need a “partial financial hardship.” For some plans, you need to have been enrolled in the past. Other plans are open only to borrowers from certain years.
  • PAYE and ICR are being phased out, but that’s not happening yet. Feel free to enroll in those plans if they’re the best option for you.
  • The new RAP plan hasn’t been rolled out yet.

• Not eligible for any IDR plan? Is it because your loans are still in their grace period? You shouldn’t need to consolidate your loans to be eligible, unless you have FFEL or Perkins loans. We would not recommend consolidating for folks who’ve already made PSLF-qualifying payments. Reach out to Federal Student Aid if you need help.

Applying for LRAP

After your IDR plan gets approved, you can see if you’re eligible to apply for LRAP.

• Use the LRAP calculator to see if your income and IDR payment make you eligible for funding.

• If you’re eligible, submit an application as a first-time or continuing participant. We don’t provide retroactive funding, so submit your application either the month of or the month before your new IDR plan starts.

• $0 monthly payment or out-of-pocket contribution higher than your IDR payment? You can apply for LRAP prequalification instead if you’re trying to meet the 3.5 year deadline.

• Already in an LRAP contract and have a new IDR plan? Email us and we’ll see if there’s anything we need to do.

Reconciliation: IDR plans

Reconciliation: loan borrowing

Neg Reg

LRAP updates

IDR & PSLF status report

The Department of Education filed a status report on IDR and PSLF buyback applications this morning. In May, servicers processed approximately 260,000 IDR applications and there are 1.5 million applications pending as of 5/31. The Department of Education processed around 3,300 PSLF buyback applications in May and there are around 59,000 outstanding.

MOHELA: pending IDR applications

Some tips for the IDR application:

• You can select “No, take my loans out of deferment or forbearance” to get your IDR application processed as fast as possible.

• You do not need to provide current income information if your current income is higher than what’s reflected on your most recent tax return.

• Allowing for IRS data sharing and not uploading any additional income information will result in the fastest processing.
• If you permit IRS data sharing, you should be able to get an estimate of your monthly payment under the different IDR plans within the application. You can always start an application, see how your options look, and decide whether you want to submit.

Loan servicer errors

Loan servicers are still working through the backlog of pending IDR applications. With this, however, many are still seeing errors on their servicer’s part, particularly with servicers seemingly randomly placing some borrowers into forbearance.

If you’re experiencing an issue with your repayment plan, billing, or loan status:

• Contact your servicer to get an explanation and/or resolve the issue.

• If your servicer doesn’t adequately resolve your issue, you can submit a complaint to the Federal Student Aid feedback center. If your complaint isn’t promptly or adequately resolved, you can escalate your complaint to the Ombudsperson.

• Some states, like California and New York, have student loan ombuds groups. You can contact them if you need help getting answers from your servicer or have a complaint.

Reconciliation bill

The reconciliation bill text from the House and Senate both propose sunsetting most of the IDR plans (except for old IBR) and creating a new plan (RAP). For some, this plan would be better than the current options, for others it would be worse. It’s looking like there will not be an option to be “legacied” into the existing IDR plans (new IBR, PAYE, ICR, SAVE). If and when the bill passes and we get more details about the new plan, we’ll be in touch about what you may need to do.

IDR application processing

Loan servicers processed around 80,000 IDR applications last month. Nearly 2 million applications are still pending. Although things are picking up, continue to have patience.

In response to the recent AFT lawsuit, the Department of Education has restored the IDR application. Processing is still on hold as part of a work stoppage.

If you’re in IDR, your recertification deadline may have been extended

The Trump administration’s plans for the Department of Education and student loans continue to be in the news. We want to share with you what we know and again provide some reassurance that core programs like IBR and PSLF are here to stay.

Future of the Dep’t of Education

You cannot get rid of a cabinet-level department via an executive order. Trump and Secretary McMahon acknowledge this. You can, however, cut funding and jobs and delay the implementation and processing of programs and policies.

If the Department of Education were to be eliminated by an act of Congress, programs like the federal student loan portfolio would transfer to the Department of the Treasury.

Future of IDR and PSLF

Income-Based Repayment (IBR) and Public Service Loan Forgiveness are similarly written into statute and cannot be eliminated by executive action. What we’re seeing instead are (illegal) delays and removal of application forms from the web. We continue to believe IBR and PSLF will stick around, especially for current borrowers.

Plans not written into statute, like PAYE, ICR, REPAYE, and SAVE–and 20-25 year forgiveness under those programs–are at risk. Please know that if you’re enrolled in one of these plans and they are eliminated, there will eventually be opportunities to switch out of them without erasing your progress toward PSLF and IDR forgiveness. There’s no need to take any action yet.

IDR application closed

After the 8th Circuit decision about SAVE a couple weeks ago, the Department of Education took down the online and PDF IDR applications. They are probably tinkering with the language and application options in response.

We’ve heard that the IDR application and IDR application processing will be down for up to 90 days. That could be shorter.

Status of your IDR plan

If you have a pending IDR application, we expect that to not be processed anytime soon. Unfortunately, there is nothing that anyone can do about this; our best hope is that you can buy back these months in the future or that some future administration, congress, or court order will declare these months qualifying for forgiveness. If your processing forbearance ends and you have a large payment due, your servicer should reverse that automatically, likely within 10 days of your due date. Remember that your servicer can clear past due payments from your account and that they will not report missed payments to credit bureaus until 90 days past due. (Meaning, they may process forbearances and clear out payments after your due date has passed.)

If you are not enrolled in IDR, there is nothing you can do at this time to enroll. If you have payments due that you cannot make, you should request a forbearance or deferment.

If you’re enrolled in SAVE, there is currently no way to get out. You are still in forbearance for the foreseeable future (even if you’re seeing an upcoming April or May due date). Continue to hold off on applying for LRAP until you switch to another plan.

If you’re enrolled in another IDR plan, you will not need to recertify your income while the application is down. If you get a notice from your servicer saying that you haven’t recertified your income and are being moved into the Standard 10-year plan, they should reverse this, ideally within 10 days of your due date.

PSLF and buy back applications

We believe that PSLF applications (standard and buy back) are also on pause for now, up to 90 days. With the change in administration, plans for paring down the Dep’t of Ed, and pending court decisions around SAVE and other plans, the Department may be waiting for things to settle. Again, there is nothing you can do in this situation but wait and request a forbearance if you don’t want to continue making payments.

Loan servicer & website updates

We’re seeing some delays in information being up-to-date on servicer websites and studentaid.gov. For instance, PSLF trackers not being updated for months, or disparities between letters from your loan servicer and what’s actually due on your account. A few rules of thumb: 1) trust your loan servicer over studentaid.gov; 2) studentaid.gov doesn’t constantly update, and everything is always a few months behind; and 3) what’s due on your account trumps everything. If you see in a letter somewhere that you have an upcoming payment, but your account continues to say $0 due, you have $0 due.

We know everything seems scary. It will take a lot of effort to get rid of the core programs many of us rely on, and their demise is unlikely. However, we may see lots of delays, changes, forbearances, holds, lawsuits, etc. as we navigate this new era. We’ll keep you posted as things evolve and let you know if there’s anything you should be worried about or anything you need to do.

The IDR account adjustment–first announced in 2023–is finally complete. Under the adjustment, borrowers were able to obtain credit toward 20-25 year IDR forgiveness (and 10-year PSLF forgiveness) during certain forbearances, deferments, and other previously ineligible months. As part of the adjustment, there is now an IDR forgiveness tracker on studentaid.gov. To prepare for a new administration, we recommend logging on and screenshotting both your IDR and PSLF trackers now.

Nearing the end of their term, the Biden Administration has withdrawn its latest debt cancellation proposals. In 2023, the administration proposed cancelling some or all debt for borrowers who owed more than they did when the started repayment, entered repayment before 2005, enrolled in a low value program, or experienced financial hardship. 

On July 18, the 8th Circuit Court of Appeals blocked all provisions of the Department of Education rule that included the new SAVE plan. In response, the Department of Education has put all SAVE plan borrowers into an administrative forbearance that doesn’t accrue interest but does not count for PSLF and IDR forgiveness. For borrowers seeking PSLF, we may need to eventually switch to a different plan. But right now, I recommend being patient for a few days or weeks until the Department of Education can come up with an adequate response.

What we know so far

• All SAVE borrowers are being put into an administrative forbearance.
  
  • The forbearance is interest-free.
  • No payments are due during the forbearance. This is true even if you already received a billing statement for your next due date (it’ll be superseded by the forbearance).

• This particular administrative forbearance does not count for PSLF or IDR forgiveness. That’s because allowing administrative forbearances to count for PSLF is a provision of the blocked rule.
  • Making a payment while in forbearance will not count for PSLF; it’s the status of the loan that matters, not the payment.
  • Previous administrative forbearances did count for PSLF under the COVID payment pause (3/13/20 – 10/1/23) and IDR account adjustment (pre-2020, post-October). Those were different programs not affected by this ruling.
  • We don’t know yet whether you can opt out. I wouldn’t waste your time calling your loan servicer until we know more.

• The IDR and consolidation applications on studentaid.gov are closed.
  • The Department of Education has put a pause on new applications while they interpret the ruling and figure out what to do.

• Borrowers who aren’t enrolled in SAVE are not affected.
  • Wondering what plan you’re in? Check out your loans on studentaid.gov.

What you can do

• The best course of action is to do nothing… yet. The ruling is so recent that your account is probably not even updated yet and the Department of Education has not yet produced any guidance. For all we know, the Dep’t could switch all the SAVE borrowers to a different repayment plan tomorrow, another ruling could come down, or a future action could retroactively count these months as qualifying.

• If you’re really close to PSLF, consider the PSLF Buyback. There is an option to make a lump sum payment to get months in forbearance to count toward PSLF through the PSLF Buyback program. But, you need to submit a request to participate and to know how much to pay. If you’re supposed to get PSLF now, or very soon, you could just ride out this forbearance and do the buyback to complete your 120 months.

• If this forbearance lasts a long time, SAVE borrowers will probably want to switch to a different plan eventually. Again, let’s see what solution the Dep’t of Ed comes up with over the coming weeks. If their solution is that SAVE borrowers stay in a non-qualifying forbearance until SCOTUS rules on the plan, then we’d want to switch to IBR (or see if the Dep’t reinstates any of the retired IDR plans). If you rush and switch before we have more info, you could end up with an unnecessarily higher payment.

• To reassure you, PSLF and IBR are secure. They are written into statute and would take an act of Congress to change. Recent litigation involves rules and other regulatory processes.

Last week, the Department of Education announced the first round of loan cancellations under the IDR account adjustment program, initially announced last spring. So far 804,000 borrowers have been notified that they have a total of $39 billion in federal student loan debt that is being discharged in the coming weeks.

The account adjustment is intended to fix past mistakes by awarded IDR and PSLF forgiveness credit to borrowers who were in repayment status regardless of payment made, loan type, or repayment plan. Borrowers in 12 or more consecutive months of forbearance or 36 or more months of cumulative forbearance are also receiving credit toward PSLF and IDR forgiveness, as are some borrowers with deferments.

More borrowers will continue to see their payment counts updated under these rules throughout 2024.

Disappointingly, the Supreme Court struck down Biden’s $10k – $20k debt forgiveness plan this morning.

While the plan is out of the picture for now, there’s some room for hope. The Department of Education is finalizing a new Income-Driven Repayment plan that will reduce monthly payments, prevent unpaid interest accrual, and reduce the time to loan forgiveness for some borrowers. Now is also the ideal time to consolidate your loans if you have any FFEL or Perkins loans that aren’t eligible for PSLF or IDR. Federal student loan borrowers–and those who consolidate their FFEL and Perkins loans by the end of 2023–will be evaluated for the IDR & PSLF account adjustment next year, which could reduce your time to IDR or PSLF forgiveness.

While this particular plan is out of the picture, there are other avenues to broad-based debt cancellation. The Department of Education has already announced its intent to conduct negotiated rulemaking on debt cancellation under the Higher Education Act. You can read more about the Department’s plans here.

As of Spring 2023, borrowers and their employers can now sign and submit PSLF Forms digitally via DocuSign using the PSLF Help Tool. These updates will, for the first time, let borrowers complete the entire PSLF application process online, and borrowers will no longer need to fax or mail in their application with a wet signature, which will hopefully reduce processing time. In addition, borrowers can now digitally track the status of their PSLF form in the My Activity section of their StudentAid.gov account, where they can see updates such as whether their employer has digitally signed their PSLF form and when their form has been processed.

In April 2022, the Department of Education announced changes that will allow borrowers to reach forgiveness under the Income-Driven Repayment (IDR) plans and Public Service Loan Forgiveness (PSLF) sooner. The Department has continually updated this guidance over time, with changes announced in October 2022 and beyond.

Under the new guidance, borrowers will now receive credit toward PSLF and IDR 20-25 year forgiveness for:

• Any month in which a borrower was in a repayment status, regardless of loan type, repayment plan, or whether payments were partial or late;
• Any month in which loans were in repayment, deferment, or forbearance status prior to consolidation;
• Months while a borrower spent 12+ months of consecutive forbearance;
• Months while a borrower spent 36+ cumulative months in forbearance; and
• Any month spent in deferment prior to 2013 (exception for in-school deferment).

Borrowers who have commercially-held FFEL loans, Perkins loans, or HEAL loans who want to benefit from these changes should apply for Direct Loan Consolidation by the end of 2023.

Borrowers who have 20 – 25 years of qualifying IDR payments, and/or 120 months of qualifying PSLF payments under the new guidelines will start to see their loans forgiven in spring 2023. All other borrowers will see their accounts update in 2024.

On November 1, 2022, the Department of Education announced new regulations governing the Direct Loan program and PSLF that will go into effect on July 1, 2023. The big changes include:

• Unpaid interest will no longer capitalize in when not statutorily required, including when borrowers enter repayment, exit a forbearance, annually after periods of negative amortization under the alternative or ICR plans, when a borrower defaults, and when borrowers on the PAYE or REPAYE plans fail to recertify their income or exit the plans. 
• Partial, late, and lump sum payments now qualify for PSLF. Payments can qualify for PSLF if borrowers: pay at least the full scheduled payment amount, or; pay in multiple installments that equal the full scheduled amount, or; pay a lump sum equal to or greater than the scheduled amount in advance of the due date. Borrowers paying in lump sums can now be “pre-paid” up to 12-months in advance or their next IDR annual certification date, whichever is earlier. Previously, payments had to be on-time, made each month, and in the correct amount to qualify, and borrowers who paid more were penalized.
• Full-time employment for PSLF will now be just 30 hours a week. Previously, borrowers had to either meet their employers’ definition of full-time or work 30 hours a week, whichever was greater. Employers can implement this provision before 7/1/23 at their discretion.
• Borrowers must receive a W-2 from a qualifying employer to qualify for PSLF. This is a change from the previous “hired” and “paid by” language.
• Payments can qualify so long as a borrower was employed at any point during the month the payment is credited. Previously, borrowers had to be employed on the exact date they made a payment.
• Borrowers will no longer lose all credit toward PSLF after loan consolidation, but the new consolidation loan will be awarded the number of qualifying payments equal to a weighted average of the loan balances. For instance, if a borrower has 60 qualifying payments on a $20,000 loan and consolidates that loan with $40,000 in loans with no qualifying payments, then the consolidation loan would be assigned 20 qualifying payments. This is a change from the prior rule which would reset all new consolidation loans’ qualifying payments to 0.
• Borrowers in certain deferments and forbearances can receive credit for PSLF. The cancer treatment deferment, economic hardship deferment, military service deferment, post-active-duty student deferment, AmeriCorps forbearance, and National Guard duty forbearance now qualify for PSLF assuming borrowers are working full-time in PSLF-qualifying employment. For all other forbearances and deferments, borrowers can receive credit as part of a new “hold harmless” option. Borrowers will be able to go back and make payments equal to or greater than what they would have paid to count that time toward PSLF.
• For NGOs that are not 501(c)(3)s, employers must have a majority of their full-time equivalent employees be working in one of the following areas: emergency management, civilian service to military personnel, public safety, law enforcement, public interest law services, early childhood education, public service for individuals with disabilities or the elderly, public health, public education, public library services, school library, or other school-based services. This is a clarification from the prior “primary purpose” rule the Department used to use when determining whether a non-governmental organization qualified for PSLF.
• Teachers and instructors will be considered full-time employees for PSLF if they are contractually employed at least 8 months over a 12-month period. Non-tenure track faculty will be considered full-time employees for PSLF if: they teach at least 9 credit hours per semester, 6 credit hours per trimester, or 18 credit hours per calendar year, or; if they multiple each credit hour taught by 3.35 hours and that number is 30+, or; if they have 30+ student-contact hours by self-attestation substantiated by the employer.
• Independent contractors can now qualify for PSLF under narrow circumstances. Borrowers working as contracted workers for a qualifying employer in a position or providing services which, under applicable State law, cannot be filled or provided by a direct employee of the qualifying employer, can now qualify for PSLF.
• Borrowers can request reconsideration of their PSLF denial within 90 days of notice.

You can read the final proposed rules here.

On August 19, 2021, the Department of Education announced that it was automatically discharging student loan debt for some borrowers with a total and permanent disability (TPD). Borrower identification will occur through a matching program with the Social Security Administration. The discharge is expected to affect over 323,000 borrowers and discharge over $5.8 billion in student debt.

Berkeley Law’s LRAP has expanded to cover three new sets of borrowers:

• International J.D. students working in LRAP-qualifying employment in the U.S. or with an international NGO;
• Undocumented J.D. students with an AB 540 nonresident tuition exemption; and
• Current and former LRAP participants using the PSLF Buyback program.

The LRAP Handbooks contain details about eligibility and application requirements.

One of the defining characteristics of Berkeley Law is its public mission. Integral to this goal is supporting our graduates working in public interest after law school. Over the past few years, we’ve made a number of programmatic improvements to our Loan Repayment Assistance Program (LRAP), in addition to increased outreach and communications. Today, we’re pleased to announce our most impactful policy change yet.

Starting October 1, eligible graduates earning up to $120,000 can now receive LRAP support, up from our previous $100,000 income cap. This change means more graduates can now take advantage of LRAP’s support. Additionally, our out-of-pocket contribution formula is changing. Graduates making $80,000 a year receive 100% LRAP support for their income-driven student loan payments, resulting in no out-of-pocket costs. Graduates making over $80,000 and up to $120,000 will now pay just 25% of their income over $80,000 toward their loans out-of-pocket, a reduction from our previous formula requiring a 35% contribution. This change means public interest graduates will now receive more LRAP funding and will need to spend less of their own money on student loan expenses.

With these improvements, Berkeley Law’s LRAP is assuredly the best program of any public institution and now has one of the lowest out-of-pocket contribution formulas of any LRAP, even among private institutions. Our LRAP excels in other ways, too. Compared to other LRAPs, Berkeley Law’s program has broad eligibility requirements that allow anyone working in law-related, public interest employment to qualify for funding. Our LRAP gives participants the flexibility to enter and exit the program at will, allowing graduates to follow their ideal career paths. And Berkeley Law maximizes LRAP support by not considering assets, allowing for dependent deductions, and protecting a limited amount of side job income.

For an overview of all of LRAP’s policies, please read the latest LRAP Handbooks. Should you have any questions, please contact Berkeley Law’s LRAP team at lrap@law.berkeley.edu.

Worried about meeting the 3.5 year LRAP deadline? You can now apply to pre-qualify for 120 months of LRAP funding without having to submit an LRAP application.

To pre-qualify, you need to be 1) in greater-than-half time and paid law-related, public interest work making under the LRAP income cap; 2) be in repayment (not in school, in a grace period, or in a forbearance or deferment (the automatic COVID forbearance doesn’t count)); 3) be enrolled in an income-driven repayment plan; and 4) have a $0 monthly payment.

You must submit both an Employer Verification Form and documentation of your $0 payment to apply.

One of Berkeley Law’s defining characteristics is its public mission and commitment to supporting our students and graduates pursuing careers in public service. Our Loan Repayment Assistance Program is crucial in this regard. We are pleased to announce a programmatic change to Berkeley Law’s Loan Repayment Assistance Program to make it more generous for our graduates. Effective August 1, 2021, LRAP’s out-of-pocket contribution income threshold will increase from $70,000 to $80,000. In short, this change will allow more graduates to receive a greater amount of LRAP support, consistent with Berkeley Law’s commitment to public interest and public service graduates.

Starting August 1, LRAP will cover 100% of all eligible loan payments for LRAP participants with annualized full-time incomes of $80,000 or less. For participants making over $80,000, LRAP assistance will be prorated. As a result, more participants will be able to have 100% of their eligible loan payments covered, and more participants with incomes above $80,000 will be eligible for LRAP support with a smaller out-of-pocket contribution.

To calculate your LRAP eligibility, use our LRAP Calculator.