Do all previous FFEL payments count for PSLF

[JB14]

My wife had FFEL loans, which we consolidated late 2021 to get into the new PSLF eligibility program. She began payments back in August of 2012, meaning that 120 payments will be this July. We sent in the form to see how many eligible payments she had, and they reported that she only had 3, the 3 since we consolidated her loans. Is it just likely that they haven't had the time/are backlogged to count loan payments that were in FFEL prior to the consolidation? Or is there a certain type of FFEL payment that doesn't count towards PSLF? It took them about 4 months to get back to us on this, so I'm hoping it's just that they are backlogged and the previous payments haven't been credited yet.

[Andrew StudentLoanAdvice]

This is common. Have you submitted her PSLF forms back to August of 2012 when she first entered repayment? If so, then you are in a waiting game. You need to have her PSLF forms back to August 2012 submitted to receive credit for all of those payments.

Remember, she had to be working full-time at a PSLF eligible employer for those years/months of payments to count as PSLF credit.

[JB14]

Andrew, can you explain this a bit more? Previously, we didn't submit anything since PSLF wasn't an option with FFEL loans, so we've only done this the one time (january this year after consolidating.). She's worked at the same place since 2012, and it's an eligible employer. Our friend who also works there, but has worked there since 2011 was in the same boat, and was able to apply for PSLF right away last November and her loans were forgiven the day before Xmas. The form we sent in was signed by HR, had her first day of employment date of September 2012.

[Andrew StudentLoanAdvice]

Oh. I thought she might have worked at different places since then. You are correct then. You would only need to submit one form which lists when she started working there in 2012.

Receiving credit to employment pre-consolidation can definitely be a longer process lasting around 4-5 months. I've had several clients who submitted all their paperwork, consolidation application and PSLF applications back in November and just had their loans forgiven in March and April.

Have they notified you of why they aren't counting the other 9 years of payments? This is just a flub or backlog on their end at this point.

[JB14]

Thanks Andrew! I'm hoping it's just backlog at this point. She's considering changing jobs to a place that would not qualify for PSLF, so that's why we're trying to figure out the situation. She has about $41k that would be forgiven, so if she leaves before 120 payments, she's going to push for some sort of signing bonus to cover that loss of forgiveness.

[Turf Doc]

Am I correct in understanding that anyone with FFEL-P loans is basically screwed out of everything?

[Andrew StudentLoanAdvice]

Turf Doc No. Any FFEL loan is a federal loan and should be eligible for forgiveness

JB14 They have temporarily lifted the requirement to be working at a non-profit/501c3 at the time of forgiveness. As long as you are positive she has worked at a qualifying employer for 10+ years then you would be fine having her switch jobs and apply for forgiveness. Just make sure you have this all completed before the limited waiver expires in October.

[Turf Doc]

Turf Doc No. Any FFEL loan is a federal loan and should be eligible for forgiveness

JB14 They have temporarily lifted the requirement to be working at a non-profit/501c3 at the time of forgiveness. As long as you are positive she has worked at a qualifying employer for 10+ years then you would be fine having her switch jobs and apply for forgiveness. Just make sure you have this all completed before the limited waiver expires in October.

Thanks, i must've been thinking of just how they were left out with stuff pre-waiver. it's amazing how complicated this all is. if you do a direct consolidation you basically keep your interest rate you had before right? with adding 1/8th percent or something? It seems like it might be a no brainer to reconsolidate even if you're not getting PSLF with it just to get back into fed protections/benefits.

[Andrew StudentLoanAdvice]

They take a weighted average of the interest rate of your loans and round it up 1/8%.

Yes, for most it definitely does make sense to consolidate those FFEL loans.

One of the situations it may not make sense is if you're not planning on doing PSLF and have received the 1% loyalty discount which servicers used to offer to FFEL borrowers who have paid consistently for years.

[cubsbank]

So some exciting news to share on this thread. I just recently (yesterday) found out that my FFELP loans were forgiven after going through the steps for TEPSLF under the newish emergency waiver. Again, as many have discussed the process is kind of funky. I consolidated my FFELP loans from navient to My Fed loan to a direct loan. Then applied for PSLF under the TEPSLF waiver.

The process was a little strange hence I wanted to share. When I consolidated and then submitted my application I was told I did not qualify as I had not made the necessary number of payments. That was because my 12 previous years of payment were through Navient and it “appeared” the clock had restarted with this consolidation to the Direct loan. However, I did submit my 12 years of loan payment with my PSLF application.

Fast forward to this week. I receive a letter from Myfedloan saying I did not qualify as I had not made enough payments. I went to log onto my account to find the balance 0! I called and they confirmed they had been forgiven but it would take 3 months to receive the correspondence.

So this is a long post to just share my experience for others. It will be clunky, not make sense but the FFELP to Direct loan consolidation to forgiveness for TEPSLF works!

[Andrew StudentLoanAdvice]

Thanks for sharing your experience. It usually is a couple of months process but can have huge benefits!