May 12, 2022

A Guide to Federal Student Loan Forgiveness

What exactly is student loan forgiveness, and how does it work?

The past six months have brought about some interesting, exciting and unexpected changes to student loan repayment. In partnership with the U.S. Department of Education (ED), the Biden Administration has completely overhauled the very fabric of federal student loan forgiveness with two critical announcements: the Public Service Loan Forgiveness (PSLF) Waiver and the recent changes to income-driven repayment (IDR) forgiveness. Considering the underwhelming lack of solutions proposed in past years, these relatively complex and piecemeal measures ought to be welcomed as a sign of positive change.

Many borrowers were both shocked and elated after the Department of Education announced the sixth extension of the student loan payment freeze in April. Even still, the same borrowers might be asking some very important questions: what exactly are these forgiveness programs, how do they impact me and what steps need to be taken to secure the full benefit of such proposals? If you’re ready for some answers, let’s dive in.

Part One: The PSLF Waiver

The U.S. Department of Education has become well-acquainted with the relentless (yet warranted) criticism from borrowers, advocacy groups and lawmakers on its failure to adequately manage and administer the PSLF program. To make amends for past misgivings, they announced on October 6, 2021, a limited PSLF waiver. This temporarily credits borrowers for past periods of repayment that would otherwise not qualify for PSLF. Boasting the change placed over 550,000 public service workers closer to loan forgiveness, the ED will temporarily count additional qualifying payments once excluded based on the type of loan (FFEL or Perkins) or disqualifying payment plan (standard, extended, etc.) towards the required 120 total qualifying payments.

Borrowers should note that the qualifying employment requirement has not changed and should confirm their employer's qualifying status by completing the PSLF form with the PSLF Help Tool.

The Nitty-Gritty Details

Previously ineligible loan types and amounts are temporarily allowable:

  • The limited waiver allows for all payments made on all federal loan types while working for qualifying employers to count, e.g., Federal Family Education Loans (FFEL), Perkins or other federal student loans. Payments will count for disbursements made towards previously consolidated ineligible loans (with the exception of jointly owned FFEL loans).
  • Any payment made while working for a qualifying employer will count, even late payments. The only periods that don’t count are periods of deferment (of less than 12 months), forbearance or default.
  • Grad Plus and Parent Plus loans are also included in the waiver.
  • Borrowers who have already completed 120 payments under the limited waiver are not required to continue to work in the public interest while awaiting loan forgiveness.

All repayment plans count:

  • The limited waiver provides credit to borrowers for payments made under any repayment plan, provided the borrower was working full-time (30 hours/week) for a qualifying employer.
  • This waiver applies whether a borrower repaid federal loans through graduated repayment, extended repayment, consolidated repayment, standard repayment or any of the other plethora of options.

Action Items to Note

Consolidate ineligible loans:

  • Federal loans that are ineligible for PSLF must be consolidated into a Direct Loan by October 31, 2022, to receive credit under the limited waiver. FFEL, Perkins or other previously ineligible federal loans must be included in a direct consolidation to get credit.
  • Borrowers can complete a direct consolidation of one ineligible loan to a Direct Loan. You do not have to combine two loans for the consolidation to count.

Submit an employment certification form (ECF) or PSLF form:

If you currently or at any point worked for a qualifying employer but did not certify your employment either due to ineligible loan types or an ineligible repayment plan, you must then submit a PSLF form to FedLoan Servicing for all periods of qualifying employment.

  • You are a part of this group if you have only Direct Loans but are not assigned to FedLoan Servicing or if you are assigned to FedLoan Servicing and have never submitted a form for the PSLF Program. You can’t get credit under these flexible rules unless you file a PSLF form by October 31, 2022.

Verify your PSLF count:

  • If you have only Direct Loans and all of them are assigned to FedLoan Servicing, you’ve most likely submitted an Employment Certification or a PSLF form. Automatic credit will be granted only if the employer listed on your form was determined to be a qualifying employer.
  • If you worked full time for a qualifying employer from 2008–2010 but did not submit a form because you had not yet consolidated your loans, you’ll still need to submit a PSLF form to get credit for those payments.
  • If you’re not sure why your prior payments were denied, check your account details online at or fill out a new PSLF form. You can also request a written payment history from FedLoan if your eligible or qualified payment count is incorrect.

Part Two: Income-Driven Repayment Plan Reform and a One-Time Adjustment Towards Forgiveness

The Biden administration announced a massive IDR waiver program on April 19, 2022, similar to the PSLF waiver program. The ED estimates that this action will result in automatic debt cancellation for at least 40,000 borrowers under PSLF and several thousand borrowers under IDR. More than 3.6 million borrowers will receive at least three years of additional credit toward forgiveness under IDR.

Most importantly, all forgiveness granted between now and January 1, 2026, will be forgiven income tax-free, whereas the total loan amount forgiven under IDR would have otherwise been included in a borrower's adjusted gross income. This means that an estimated 10-15% of all current loan holders will be granted either immediate or eventual tax-free forgiveness under the revised guidelines for IDR plan forgiveness.

The Nitty-Gritty Details

The changes announced by the ED are aimed to bring borrowers closer to forgiveness under income-driven repayment (IDR) plans after either 20 or 25 years of repayment. It applies to borrowers pursuing 20 and 25-year IDR programs as well as those pursuing PSLF. Whether a borrower qualifies for this forgiveness depends on their current Income-driven repayment plan.

They will also count payments made before a consolidation. Additional loan counts will also benefit holders of Parent PLUS Loans and FFEL once consolidated. Consolidations need to take place before January 1, 2023.

One-time payment count revision for eligible IDR borrowers:

  • As part of this initiative, ED will conduct a one-time revision of IDR-qualifying payments for all Federal Direct Loan Program and federally managed FFEL program loans.
  • ED will conduct a one-time account adjustment to borrower accounts that will count time toward IDR forgiveness, including:
    • Any months in which a borrower had time in a repayment status, regardless of the payments made, loan type or repayment plan.
    • Twelve or more months of consecutive forbearance or 36 or more months of cumulative forbearance toward IDR and PSLF forgiveness.
    • Months spent in deferment (with the exception of in-school deferment) prior to 2013.
    • Any time in repayment prior to consolidation on consolidated loans.
  • Any borrower with loans that have accumulated time in repayment of at least 20 or 25 years will see automatic forgiveness, even if they are not currently on an IDR plan.
  • If a borrower made qualifying payments that exceed forgiveness thresholds of 20 or 25 years, they will receive a refund for their overpayment.
  • Borrowers who were steered into shorter-term forbearances will be able to seek account review by filing a complaint with the FSA Ombudsman at

Permanent fixes to IDR payment counting:

  • In addition to issuing new guidance to student loan servicers to ensure accurate and uniform payment counting practices, ED will track payment counts in their own modernized data systems.
  • In 2023, FSA will begin displaying IDR payment counts on so borrowers can view their progress after logging into their accounts.

Effects on PSLF applicants:

  • If a borrower has applied or will apply for PSLF, these changes may have an impact by increasing their qualifying payment count.
  • If a borrower has 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance, they will receive PSLF credit for those periods of time if they certify qualifying employment.

Action Items to Note

While no immediate action is needed at this time (due to a lack of clarifying information from the ED), additional steps could be needed by borrowers soon. If borrowers do not want to wait until 2023 for FSA to display their payment count, they can request a written payment history from the loan servicer. Depending on the loan servicer, borrowers might be able to see most of their history already displayed online.

If you are working toward IDR plan forgiveness or already have accumulated 20 or 25 years of student loan payments, take a moment to celebrate this rather unprecedented but good news.

Knowledge is Power

By taking a piecemeal approach, the Biden administration has expanded existing loan forgiveness programs two-fold. Borrowers can empower themselves and their student loan forgiveness strategy by staying informed, being vigilant and taking action. However, there are many intricacies in this new legislation. If you have questions about your student loans, Buckingham would love to help! Schedule a short consultation with us today.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based upon third party information which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party websites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by featured authors are their own and may not accurately reflect those of the Buckingham Strategic Wealth®. IRN-22-3744

© 2022 Buckingham Strategic Wealth®

This commentary originally appeared May 12, 2022 on

About the Author

Becca Craig

Wealth Advisor

As a wealth advisor at Buckingham Strategic Wealth, Becca champions the dual roles of advisor and advocate. Becca makes money work for her clients so they can focus on the people, endeavors and causes they care about most.

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