Student Loan Forgiveness for Psychologists: Updates to PSLF

Thousands of student loan borrowers, including publicly employed psychologists, are eligible for loan forgiveness thanks to changes to the public service loan forgiveness (PSLF) program.

The Department of Education (ED) estimates that more than half a million borrowers who have consolidated their loans will see an increase in payments that qualify for PSLF. As of the end of 2021, over $2.4 billion in student loan forgiveness has already been distributed to nearly 40,000 recipients.

However, aspects of these changes only last until October 2022, so find out if you are eligible for loan forgiveness as soon as possible.

Updates to Student Loan Forgiveness

The ED announced changes to PSLF in October 2021 to address previous issues that limited many borrowers' eligibility.

The goal of the program, originally established in 2007, was to lessen the student debt of public service workers who have worked for the government for a decade or longer. U.S. Secretary of Education, Miguel Cardona, says that updates to the program will help accomplish this goal.

Military service members and federal employees will automatically receive credit toward PSLF, no application necessary. The ED will also review some previously denied PSLF applications.

Temporary Waiver for PSLF

Additionally, some payments that would not normally qualify for PSLF will be eligible under the temporary waiver. But these changes will only last until October 2022.

Key aspects of the PSLF's eligibility requirements remain the same, namely:

• You must have made 120 payments or the equivalent
• You must have Direct Loans or consolidate into Direct Consolidation Loans
• You must be employed by the government, 501(c)(3) not-for-profit, or another not-for-profit organization that provides a qualifying service
• Work full time

So, what's changed?

• You can receive credit for periods of repayment made on Direct Loans, Federal Family Education Loans, or Perkins Loans
• Past payments under any plan count for nonconsolidation loans through Sept. 30, 2021
• Past payments made on loans before consolidation count, even if on the wrong repayment plan
• Past payments that were made late or for less than the amount due count for nonconsolidation loans through Sept. 30, 2021
• Past payments made on loans before consolidation count, even if paid late, or for less than the amount due
• You need to be employed full time for a qualifying employer to receive credit
• You can receive forgiveness even if not employed or not employed by a qualifying employer at the time of application and forgiveness

Who Qualifies for Loan Forgiveness?

To qualify for the PSLF program, you must:

• Be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service);
• Work full time for that agency or organization;
• Have Direct Loans (or consolidate other federal student loans into a Direct Loan);
• Repay your loans under an income-driven repayment plan (This provision will be waived through October 31, 2022 as part of the limited PSLF waiver.)

But before you assume you're disqualified, note a few important details about these rules.

First, if you are not currently employed full time by a government or not-for-profit organization, you can still potentially qualify if you have been in the past.

Second, if you have another federal student loan type other than a Direct Loan, you can still qualify. You just need to consolidate your loan(s) into a Direct Consolidation Loan before October 31, 2022.

Third, even if you haven't made payments during the government's pause on student loans during the pandemic, those months still count toward the 120 month requirement.

However, you cannot receive credit toward PSLF if you are currently in school more than half time, in a loan grace period, in forbearance, in certain types of deferment, or in bankruptcy.

If you're still not sure if you qualify, check out the ED's PSLF help tool or log into your account on the Federal Student Aid website and go to "My Aid."

How Does This Affect the Field of Psychology?

Nearly half of people with research-based doctorates have student loans, according to the National Center for Education Statistics. Depending on the type of degree you earn, the average amount owed varies.

But according to the American Psychological Association, most psychology practitioners graduate with $100,000 or more in student loan debt, which is why the organization has been a major advocate for the new changes.

A significant number of psychologists potentially qualify. According to the U.S. Bureau of Labor Statistics, 10% of psychologists work for the government, making them public service employees. Those who work for public schools, nonprofit hospitals, and other government-funded organizations also qualify.

Unfortunately, psychologists that work in private practice or at other private institutions are not candidates.

Frequently Asked Questions

Are all the changes to PSLF permanent?

No, the waiver will expire in October 2022.

If I have made more than 120 payments, will I be refunded?

Yes, if you have a Direct Loan, you will be automatically reimbursed for the additional payments you made. If you previously consolidated from another loan type to a Direct Loan, you will only be reimbursed for payments you made on the Direct Loan.

Can I qualify if I have a different federal loan type than a Direct Loan?

You can, but you must consolidate your loan into a Direct Loan before October 2022.

Will it cost anything to consolidate my loans?

​​There is no fee to consolidate. Some private companies may offer to help you apply for a Direct Loan for a fee, but this isn't necessary.

What if I no longer work full time or I no longer work at a public service job?

If you previously worked full time in the public sector, payments may temporarily be eligible for forgiveness.

If I am close to hitting 120 payments, will I qualify?

If you make 120 payments before October 2022, you will be able to take advantage of the temporary waiver.

Where can I find the PSLF employment certification form?

You can find the application form by following this link. When you're finished, you can submit it via mail, fax, or submit it online.

Reviewed by:

Mary Louis

Mary Louis is a Brooklyn native who currently resides in Nashville, Tennessee, where she works at a state community college. She has worked in financial aid and recruitment as a registrar and bursar at city, state, for-profit, and Ivy League institutions, as well as at historically Black colleges and universities. Louis' financial aid experience includes writing policies and procedures; overseeing state and federal aid, scholarships, and private education lending; and assisting families with completing the Free Application for Federal Student Aid (FAFSA).

Mary Louis is a paid member of the Red Ventures Education freelance review network.

Page last reviewed January 24, 2022