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FFEL Loans don't qualify for PSLF? Then who could possibly be eligible in 2017?

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  • FFEL Loans don't qualify for PSLF? Then who could possibly be eligible in 2017?

    Long time reader.

    I myself graduated medical school a little less than 10 years ago when all of this PSLF, IBR first came out. I decided at that time that I was just going to play it straight and figure out a way to pay for my student loans the old fashioned way and have done extended repayment plan with occasional "bolus" towards principal.

    More recently since the ten year clock is up this year 2017, and the application for PSLF forgiveness is out, I was looking for more info about PSLF. It doesn't sound like anyone, white coat or not, has had any loans forgiven yet. (Granted, it seems like the application for forgiveness is only a month old).

    I thought there was an off chance I could retroactively get into PSLF because I actually ended up working for a 501c3. It turns out that FFEL loans DON'T qualify for PSLF, and of course these are all of my loans. Apparently you can do a direct consolidation with dept. of Education, but all previous loan payments would not qualify.

    This seems pretty disingenuous to me. People in the know about PSLF, was there any notification for you about FFEL loans not being eligible for PSLF? If so, then forget my post. 

    Secondly, my understanding was that most federal student loans of the pre 2010 era were mostly FFEL loans. So if you are to be eligible for PSLF, you would have had to graduate with FFEL loans in 2007 then somehow you must have known to do a direct consolidation loan right at that time so that you could now be eligible with 120 payments in 2017?

    Am I totally wrong about all this?

    Personally, all this debate, and controversy about PSLF makes me more happy I'm just gonna treat it as a regular debt and pay it the regular way. I hope people banking on this have everything in order because it just smells like as soon as the government figures this out they are going to make it near impossible to get loan forgiveness.


  • #2

    If I recall correctly, it stated in the fine print that only Direct Loans qualified for PSLF, but that FFEL loans could be consolidated into Direct Loans that would then qualify. So you're correct, people would have had to consolidate right away after graduation, which is why there is probably going to be a delay in reports of people receiving forgiveness due to the "lag time" from the consolidation process.

    I've talked to a number of people who did not realize that FFEL loans had to be consolidated and lost out on a number of qualifying years. It's a bummer, for sure.


    • #3

      Sorry to hear what happened. 

       Yes, I was informed upfront that FFEL loans would not qualify. When PSLF became available, I promptly consolidated my FFEL loans with DirectLoans to gain eligibility.

      I don't see how the rule makes any sense from a policy standpoint, but they were clear about it.