[Editor's Note: As a physician looking to create lasting wealth, you know that the medical field is challenging enough without having to stress about your personal finances. Thats why we created the Physician Wellness and Financial Literacy Conference (WCICON23). We want you learning from and building relationships with other physicians and financial experts to accelerate your path to financial independence. At the same time, we want you getting some much-needed rest and relaxation at the stunning JW Marriott Desert Ridge in Phoenix. Early-bird registration is now open for the CME-eligible WCICON23that runs March 1-4. Sign up today!]
By Andrew Paulson, CSLP, Lead Student Loan Consultant and Co-Founder of our partner site StudentLoanAdvice.com
The Public Service Loan Forgiveness (PSLF) waiver has been life-changing for many borrowers. But remember, it expires on Halloween this year, so if you were planning to take advantage of this limited-time offer, make sure to get it done before October 31.
Early on, when the waiver was first announced in October 2021, we thought the waiver would be pushed back again because many borrowers would not hear about it in time or would be doubtful of the implementation. However, it seems extremely unlikely the PSLF waiver goalpost will be moved again, especially with President Biden's Student Loan Forgiveness (application now available) plan now at the forefront. Also, I am beginning to see the IDR waiver implemented for student loan clients.
Lets talk about the PSLF waiver first, because it's the highest priority with the upcoming deadline. Then, well cover IDR.
The PSLF waiver is a temporary waiver that relaxes a number of rules for the PSLF program until October 31, 2022. The PSLF program has been riddled with complexity, and many believe the waiver was passed to help offset some of the damage done to older borrowers with regard to the PSLF program.
More information here:
Does PSLF Work? PSLF Success and Why the Current Changes Matter
This waiver mainly applies to those who were making payments on Family Federal Education Loans (or FFEL) loans. It also affects borrowers who made payments in ineligible repayment programs, such as the extended or graduated repayment program. Further, Ive seen borrowers who have different monthly payment credits for PSLF on their federal student loans benefit when they consolidate their loans together. In doing so, they will take the loan with the longest repayment history and apply it going forward, so if you consolidate two loans together, theyll take the loan with the highest payment credits. Let me illustrate with an example.
A doctor who borrowed for undergraduate and medical school is now beginning PGY-2. They graduated in May the year prior and began residency July 1. They complete their first PSLF certification form by having their program director sign it and then send it to the loan servicer. The loan servicer will send them an email with how many payments count to PSLF. Their undergrad loans would show 12 months or one year of PSLF credit, and their med school loans would have 5-6 months of credit. The discrepancy in payments is due to the time the med school loans were in the grace period. The borrower most likely used up the grace period on the undergraduate loans before med school. Grace periods dont count toward PSLF even if you make a payment.
As a result, medical school loans and undergrad loans will often have a difference in payment credits. Thus, if this borrower stays on track to PSLF, they will receive forgiveness twice. First, in 108 months, and the second one in 114-115 months.
The PSLF waiver allows a borrower to consolidate loans with different payments together and have the loan with the longest repayment history applied to all loans. The result would be this doc receives forgiveness at 120 payments from med school and likely recoups five to six months of future payments.
Please note: this strategy will not work when the waiver expires on November 1. The old rules pertaining to consolidation will revert, and consolidation erases ALL prior payments.
More information here:
How to Ensure Student Loan Forgiveness Through the PSLF Program
Since the PSLF waiver, the overall number of borrowers who have seen their loans forgiven via PSLF has increased exponentially. PSLF was created in October 2007, and borrowers first began to receive forgiveness 10 years from that point in October 2017. From October 2017-September 2021, about 16,000 borrowers received forgiveness. As of mid-August 2022, there have now been 211,000 borrowers who have received forgiveness. Thats a percentage increase of 1,219%. The vast majority of the nearly 200,000 who have received forgiveness in the last year has been a direct result of the PSLF waiver.
So, if you are on the fence, it has never been a better time to throw in an application to get this time-limited forgiveness.
Yes, you do. Sure, this should have been done yesterday, but many of us procrastinateand perhaps people wanted to see how this all played out. I dont know if it could have turned out better now that more than 200,000 borrowers have received forgiveness.
If you have FFEL/Perkins loans and would like to apply for PSLF, you need to consolidate your student loans now. The absolute last day you can send in this application is October 31, but I know for a fact that studentaid.gov is going to be inundated with requests so dont wait until the 11th hour. If you already have direct loans, you probably dont need to consolidate your loans now unless you just graduated this spring/summer or have loans with different PSLF counts.
After you submit your consolidation, you need to complete your PSLF certification form. That is the employer certification form which must be signed by your current or past employer(s). This is to be sent only to employers that would qualify as a nonprofit or 501(c)(3). Studentaid.gov has a PSLF help tool that allows you to check employer eligibility. These also need to be submitted by October 31 to qualify under the limited waiver. The process of having these forms signed can take time. So, dont wait until the last minute to have them signed and submitted.
Please note: even if you completed a direct federal consolidation and it is not yet processed by your loan servicer, you can still submit your PSLF certification forms. You probably wont be able to use the nifty file upload, but you can send it via fax or mail. My recommendation is to use certified mail if you cant use the file upload.
More information here:
Is Public Service Loan Forgiveness Worth It for Doctors?
No, this only pertains to Biden student loan forgiveness. You had to consolidate your commercially held FFEL loans by September 29 to be eligible for the $10,000-$20,000 of forgiveness.
Ive written about the IDR waiver sporadically over the last year but want to highlight what it means for borrowers, because I've started to see client accounts FINALLY changing due to the waiver. The IDR waiver, unlike the PSLF waiver, is not just impacting a small segment of federal borrowers who are in public service. This waiver impacts all federal borrowers with some eligible for immediate forgiveness, not only through PSLF but also those on taxable (20- to 25-year) forgiveness.
The Department of Education (ED) will conduct a one-time adjustment to count long-term forbearances to PSLF and IDR forgiveness. The ED has said this will be implemented by fall 2022.
Here are the criteria for what counts as credit:
With forbearances shorter than the criteria provided above, contact the student loan ombudsman, and file a complaint to have them review your situation.
This means if you put your loans into forbearance for four years during residency, you could be eligible to receive four years of payment credit to IDR and PSLF forgiveness.
PSLF has a tracker on the PSLF servicers site which shows your progress, and it will automatically update when the IDR waiver is applied. IDR forgiveness will automatically be updated, but there isnt a built-in tracker yet. However, the ED has mentioned as part of the IDR waiver that a tracker for IDR forgiveness will be created.
In your payment history on your loan servicer's website, you should be able to see certain forbearances/deferment periods of time where Special Waiver will be visible. Heres an example in MOHELA (federal loan servicer)
Here are some other questions regarding the IDR waiver:
How long does it take for my servicer to implement my new payment count after the IDR waiver is applied?
I have seen it implemented for some borrowers already. Other borrower accounts are being updated as we speak. I dont have a definite timeframe on how long it will take for this to happen to all borrowers, but I anticipate it could be weeks or even months to be completely rolled out.
If I'm pursuing PSLF, do I need to submit PSLF certification forms for periods under the IDR waiver to count?
Yes, to receive PSLF credit, you have to submit PSLF certification forms for your periods of forbearances that you would like to have counted.
Do commercially held FFEL loans qualify for the IDR waiver?
No, they dont. You need to complete a direct federal consolidation for the loans to qualify. Also, it's been said that you must have this completed prior to implementing the waiver. The estimated date of implementation is January 1, 2023, so dont delay on consolidation if youd like these loans to qualify as well.
The PSLF waiver has demonstrated that loan forgiveness can work for borrowers if they are working in public service. If youre trying to complete this last minute and want to ensure youre doing it right, our expert team at StudentLoanAdvice.com has helped hundreds of borrowers this year with the PSLF waiver. We are well-versed in both waivers, and we can project exactly when youll have conquered your loans. Dont delay and set up a time with them today!
Have you applied for either student loan forgiveness waiver? How has it worked out for you? If not, are you still planning to take action before the deadline? Comment below!
Read more here:
PSLF Waiver Application Deadline - The White Coat Investor
- Bitcoin Halving: A History of Economics Shift & Financial Independence - Crypto Times - April 20th, 2024 [April 20th, 2024]
- Your Excuses Will Never Help You Build Wealth - DataDrivenInvestor - April 14th, 2024 [April 14th, 2024]
- Financial expert comments on Brits methods of obtaining financial freedom - IFA Magazine - April 14th, 2024 [April 14th, 2024]
- Women reveal why they chose financial security over love - Yahoo News UK - April 14th, 2024 [April 14th, 2024]
- This 48-year-old dad retired early to move to Panama with his family: 'This has been the greatest thing' - Fortune - March 29th, 2024 [March 29th, 2024]
- More than just housewives: Ministry encourages women to embrace leadership, financial independence - Sinar Daily - March 29th, 2024 [March 29th, 2024]
- Gender equality through Financial Independence (CSW68 Side Event). - Welcome to the United Nations - March 16th, 2024 [March 16th, 2024]
- Journal Club 03-15-24 - Passive Income MD - March 16th, 2024 [March 16th, 2024]
- How much money Americans need to earn to be 'financially independent' - CNBC - January 29th, 2024 [January 29th, 2024]
- What is Financial Independence, Retire Early (FIRE)? - Bankrate.com - January 29th, 2024 [January 29th, 2024]
- HUYNH: The Student Council endowment could ensure financial independence - University of Virginia The Cavalier Daily - January 29th, 2024 [January 29th, 2024]
- Crypto Sundae The Dog $SUNDAE: Your Path to Financial Independence - Medium - January 29th, 2024 [January 29th, 2024]
- Financial Independence through Crypto: Top 3 Coins That Could Transform Your Portfolio in 2024 - CryptoDaily - January 29th, 2024 [January 29th, 2024]
- Salary Success: Is $94000 the Magic Number for Financial Freedom? - Study Finds - January 29th, 2024 [January 29th, 2024]
- Early Retirement Is Just A Big Lie - Seeking Alpha - January 29th, 2024 [January 29th, 2024]
- 4 Strategies to Achieve Financial Independence in 2024 - Business Insider - January 4th, 2024 [January 4th, 2024]
- 3 Legged Stool of Retirement | investing.com - Investing.com Canada - January 4th, 2024 [January 4th, 2024]
- What is Coast FIRE? Should you pursue this instead of vanilla financial independence? | Mint - Mint - December 25th, 2023 [December 25th, 2023]
- Book Recommendations on Money, Investing, and Financial Independence - Business Insider - December 25th, 2023 [December 25th, 2023]
- How 12 years of tracking investments has been a life-changer - freefincal on YouTube - December 25th, 2023 [December 25th, 2023]
- Understanding the Path to Financial Independence in Retirement - TickerTV News - December 25th, 2023 [December 25th, 2023]
- Females On FIRE: 3 Diverse Women Share Their Journey To ... - Bankrate.com - November 30th, 2023 [November 30th, 2023]
- WA Parents Lead in Funding Adult Kids, Survey Shows - Source ONE News - November 30th, 2023 [November 30th, 2023]
- Saving, Investing, and Running Marathons: My 25-year Journey to ... - freefincal on YouTube - November 30th, 2023 [November 30th, 2023]
- The Clash Against The Magnificent Seven - Community Advocate - November 30th, 2023 [November 30th, 2023]
- What is the perfect age to retire? Here are the 5 crucial questions you need to answer now - AOL - November 30th, 2023 [November 30th, 2023]
- Italy Searches for Museum Leaders, With Nationalism in the Air - The New York Times - November 30th, 2023 [November 30th, 2023]
- In Africa, Gender Equity in Construction Shapes Tomorrow's Workforce - Autodesk Redshift - November 30th, 2023 [November 30th, 2023]
- How Lifestyle Inflation Is Keeping You In The Rat Race (Avoid To ... - New Trader U - November 30th, 2023 [November 30th, 2023]
- Small business ideas to start at university - Arizona Big Media - November 30th, 2023 [November 30th, 2023]
- Top 5 Investment Ideas for Beginners: A Comprehensive Guide - Goodreturns - November 30th, 2023 [November 30th, 2023]
- How Huawei Is Helping China Build Up Its Semiconductor ... - Bloomberg - November 30th, 2023 [November 30th, 2023]
- Patient experiences of being advised by a healthcare professional to ... - BioMed Central - November 30th, 2023 [November 30th, 2023]
- When You Should Consider Buying Even More Stocks | White Coat ... - The White Coat Investor - July 19th, 2023 [July 19th, 2023]
- Sanaipei Tande's insights on marriage, polygamy and financial ... - Nairobi News - July 19th, 2023 [July 19th, 2023]
- Real jobs for eager young people: The Heckscher Foundation ... - New York Daily News - July 19th, 2023 [July 19th, 2023]
- All about the Benjamins: Researchers decipher the secrets of ... - ND Newswire - July 19th, 2023 [July 19th, 2023]
- How To Become Rich With The Power Of Compounding - New Trader U - July 19th, 2023 [July 19th, 2023]
- Women Deliver 2023 | Together We All Lead - Procter & Gamble - July 19th, 2023 [July 19th, 2023]
- Acclaimed Temple psychologist's new book explores parenting adult ... - Temple University News - July 19th, 2023 [July 19th, 2023]
- Where Is Kate Chastain From 'Below Deck' Now? - We Got This Covered - July 19th, 2023 [July 19th, 2023]
- Programs that help NYC migrants achieve financial independence ... - New York Daily News - June 26th, 2023 [June 26th, 2023]
- ChatGPT gives 10 reasons why you should buy Bitcoin - Finbold - Finance in Bold - June 26th, 2023 [June 26th, 2023]
- Scottish independence reset undermined by confusion over SNP ... - Financial Times - June 26th, 2023 [June 26th, 2023]
- It's Never Too Late to Become a Millionaire - New Trader U - June 26th, 2023 [June 26th, 2023]
- Milford Foundation Partners With MoneyTime To Improve Financial ... - Scoop - June 26th, 2023 [June 26th, 2023]
- Bitcoin ETFs: What Are the Potential Implications for Crypto? - Captain Altcoin - June 26th, 2023 [June 26th, 2023]
- De-dollarization will be a priority talk at BRICS meeting Cryptopolitan - Cryptopolitan - June 26th, 2023 [June 26th, 2023]
- Gen Z viewers are more inclined towards 'Financial Independence Retire Early' concept: Rachana Ranade - Times of India - February 7th, 2023 [February 7th, 2023]
- FIRE Movement: What It Is And How It Works - NerdWallet - January 31st, 2023 [January 31st, 2023]
- FIRE: Financial Independence, Retire Early Forbes Advisor - January 31st, 2023 [January 31st, 2023]
- Priyanka Chopra Jonas' idea of financial independence is inspirational and how! - Zoom TV - January 27th, 2023 [January 27th, 2023]
- Independence Realty Trust, Inc.'s (NYSE:IRT) Stock Has Seen Strong Momentum: Does That Call For Deeper Study Of Its Financial Prospects? - Simply Wall... - January 27th, 2023 [January 27th, 2023]
- What Is Financial Independence? Forbes Advisor UK - January 19th, 2023 [January 19th, 2023]
- The FIRE Movement: Financial Independence; Retire Early | Britannica Money - January 19th, 2023 [January 19th, 2023]
- Home | NextAdvisor with TIME - January 6th, 2023 [January 6th, 2023]
- Why Financial Independence with Children is Challenging. - December 28th, 2022 [December 28th, 2022]
- 8 Levels Of Financial Freedom - Forbes - December 23rd, 2022 [December 23rd, 2022]
- Independence Contract Drilling, Inc. Reports Unaudited Financial ... - November 25th, 2022 [November 25th, 2022]
- How Much Money You Need to Retire Early in All 50 States - NextAdvisor - November 25th, 2022 [November 25th, 2022]
- Funding | The Official Website of The Duke & Duchess of Sussex - October 23rd, 2022 [October 23rd, 2022]
- What the Future Voices of Personal Finance All Have in Common - NextAdvisor - October 19th, 2022 [October 19th, 2022]
- How this 41-year-old went from 'living on credit cards' to retiring early with $3 million in California - CNBC - October 19th, 2022 [October 19th, 2022]
- Insights on What Really Matters to Participants - PLANADVISER - October 19th, 2022 [October 19th, 2022]
- On the road to financial independence - The News International - October 19th, 2022 [October 19th, 2022]
- Womens center announces expansion to address domestic violence throughout the region - Houston Public Media - October 19th, 2022 [October 19th, 2022]
- Fairfax Financial and Independence Pet Group Receive All Regulatory Approvals To Complete Sale of Global Pet Insurance Operations - GlobeNewswire - October 19th, 2022 [October 19th, 2022]
- Sustainable Bitcoin Miner CleanSpark Welcomes Investors and Analysts to its Mining Campuses in Atlanta - GuruFocus.com - October 19th, 2022 [October 19th, 2022]
- Deep Well Project to host open house for new financial stability initiative - WSAV-TV - October 19th, 2022 [October 19th, 2022]
- IIM Grad Quits Job to Help Over 1000 Women in Bihar Scale Their Small Businesses - The Better India - October 19th, 2022 [October 19th, 2022]
- Harry's Memoir Will Be 'Quite Revealing' 'If We Ever See It'Jeffrey Archer - Newsweek - October 19th, 2022 [October 19th, 2022]
- Where Harold Weilbrenner and Janice Weiner stand on issues in the Senate District 45 race - Iowa City Press-Citizen - October 19th, 2022 [October 19th, 2022]
- Moliy Is Swimming Against the Tide of Mainstream Afropopand Succeeding - OkayAfrica - October 19th, 2022 [October 19th, 2022]
- From Chaos to Success: The Mike Koshatko Story - Digital Journal - October 19th, 2022 [October 19th, 2022]
- SEC Warns Auditors to Take Their Role and Independence Seriously - JD Supra - October 19th, 2022 [October 19th, 2022]
- Suze Orman Hates the FIRE Movement. Here's Why - The Motley Fool - October 13th, 2022 [October 13th, 2022]
- 59% Of Working Women Rely On Patriarchs To Take Financial Decisions - HerZindagi English - October 13th, 2022 [October 13th, 2022]
- Unprecedented collaboration launched to take on the underrepresentation of women in financial advice - Yahoo Finance - October 13th, 2022 [October 13th, 2022]
- 37-year-old millionaire reacts to couple who retired early with $2.2 million in Portugal: It's 'like cheating' - CNBC - October 13th, 2022 [October 13th, 2022]
- Independence Contract Drilling, Inc. Announces Timing of Third Quarter 2022 Financial Results and Conference Call - Yahoo Finance - October 13th, 2022 [October 13th, 2022]