More Penn State employees may qualify for federal loan forgiveness


UNIVERSITY PARK, Pa. — Under temporary rules from the U.S. Department of Education, many more Penn State employees than in the past could qualify for student loan forgiveness. The Sokolov-Miller Family Financial and Life Skills Center is available to assist employees — along with Penn State students and alumni — in determining whether they qualify and applying for loan forgiveness.  

The temporary rules will expand the number of people who qualify for federal loan forgiveness under the Public Service Loan Forgiveness (PSLF) program. Since Penn State is a qualified employer under the program, many faculty and staff could be eligible for loan forgiveness, even if they have applied for PSLF and been denied in the past. 

To help members of the Penn State community to navigate these temporary changes to PSLF, the Sokolov-Miller Family Financial and Life Skills Center will offer one-on-one counseling and two public information sessions. Currently, the temporary rule change (called a “limited waiver”) is set to expire on Oct. 31, 2022, so individuals seeking forgiveness must act before this deadline. 

The public sessions are intended to provide a broad overview of PSLF, but one-on-one appointments will be especially helpful for those who may qualify for forgiveness, according to Julie Heaton, director of the Sokolov-Miller Family Center. 

“There are many aspects to PSLF and the limited waiver, so we encourage members of the Penn State community who may qualify for loan forgiveness to connect with us individually,” said Heaton. “Time is of the essence because some of the processes can take weeks or months. If people think they could be eligible for PSLF, they should start those processes by early August at the absolute latest.”  

The two 45-minute public information sessions are scheduled for: 

  • 3:30 p.m. Thursday, July 14 
  • Noon Tuesday, Aug. 9 

Sessions will be conducted over Zoom and recorded. Session links can be found at financialliteracy.psu.edu

Faculty, staff and alumni can schedule one-on-one appointments with the center by emailing finlit@psu.edu, providing their name, and indicating they would like a PSLF consultation. Current students can schedule an appointment through Starfish.  

Public Service Loan Forgiveness to enter 15th year 

Implemented in its original form in 2007, the Public Service Loan Forgiveness program forgives — completely and untaxed — the remaining balance on Direct Loans after borrowers have made 120 qualifying monthly payments while working for a qualifying public service employer (such as Penn State). However, for years advocates of student borrowers have pushed to fix problems with the program and provide the public with more and clearer information about the program. 

In 2017, a review by the U.S. Government Accountability Office found that 10 years into the program, few eligible borrowers actually had their loans forgiven, and reviewers recommended changes to the program, along with changes to the information provided by loan servicers. In response, the U.S. Department of Education rolled out the limited waiver rules last October. 

One of the biggest changes under the temporary rules is that payments made under Federal Family Education Loans (FFEL, a type of loan that ceased in 2010) can now be counted toward a borrower’s payments. However, borrowers must “consolidate” those loans into Direct Loans. 

“Many people have been burned by having FFEL loans and believing that when they were paying those, their payments were counting toward their 120 payments under PSLF,” said Heaton. 

There are many other provisions to the limited waiver, such as changes to forbearance periods, payments made, payment plans and time spent in deferment.  

“The big takeaway with the limited waiver is if you’ve been denied in the past — because of the type of loan, payment plan or amount paid — you should try to get a certification form into the loan servicer FedLoan by Oct. 31 to see if you qualify,” Heaton said. 

The Sokolov-Miller Family Financial and Life Skills Center will continue offering PSLF support throughout the limited waiver period.  

The Sokolov-Miller Family Financial and Life Skills Center offers services to the entire Penn State community and is part of Penn State Undergraduate Education

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