The Department of Education announced it will extend federal student loan forbearance, again. Forbearance is the temporary suspension of loan payments. This newest extension which the Department called “final” will carry through to the end of January 2022. And notifications to borrows have already started going out.

During this forbearance program, federal loan borrowers are not required to make loan payments AND interest does not accrue on those loans. For our active duty military and federal employees going for Public Service Loan Forgiveness (PSLF), this extension is more great news. This time in forbearance still counts toward your 120 months of payments required for PSLF forgiveness. You will receive credit as though you made on-time monthly payments in the correct amount while on a qualifying repayment plan. To see these qualifying payments reflected in your account, you’ll need to submit a PSLF form certifying your employment for the same period of time as the suspension. Your count of qualifying payments toward PSLF is officially updated only when you update your employment certifications.

According to the Department of Education’s website https://studentaid.gov/announcements-events/coronavirus Once the payment suspension ends, you’ll receive your billing statement or other notice at least 21 days before your payment is due. You will NOT have to re-certify your income before the forbearance period ends, even if your recertification date would have happened prior to that. It looks like will need to re-certify in 2022 if this is the “final” forbearance extension. You should be notified of your new recertification date beforehand. Remember to update your contact information with your loan servicer if you moved, changed phone numbers, or have a new email address.

Your payment amount should return to what it was before your payments were suspended, unless you recertified during forbearance. You can always contact your loan servicer to find out what your payment amount will be when payments start up again.

Finally, Public Service Loan Forgiveness is a great program, but it does require you to follow strict rules to get your loans forgiven in the end. So here’s a few tips. First, don’t make larger payments than necessary. Paying more than necessary is money out of your pocket now means you will have less of your loan forgiven when you do reach your 120 qualifying payments.

Don’t make payments more than once a month, the extra payments won’t count as qualifying payments. Remember to submit your Employment Certification form every year and save proof of you full-time employment like your IRS W-2. T

Also, if you are going to consolidate your federal loans, do it soon after you graduate from college. Or don’t do it. When you consolidate, your 120-payment clock gets reset. You have start counting your payments all over again.

Also, the 120 payments don’t have to be consecutive. If you take some time off from public service work, you can come back in and start where you left off. This is especially important for our servicemembers who transition out of the military with less than 10 years of service, but plan to continue in some type of public service.

The rules and paperwork can be a pain, but the PSLF rewards can be huge. Be sure you’re in the right repayment plan, your loan payments are qualifying, and you are re-certifying every year. For more information check out https://studentaid.gov/pslf/ and their article Become a Public Service Loan Forgiveness (PSLF) Help Tool Ninja https://studentaid.gov/articles/become-a-pslf-help-tool-ninja/
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