Advertiser disclosure

Terms and Restrictions Apply
Physician on FIRE has partnered with CardRatings for our coverage of credit card products. Physician on FIRE and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. POF does not include all card companies or all available card offers. Credit Card Providers determine the underwriting criteria necessary for approval, you should review each Provider’s terms and conditions to determine which card works for you and your personal financial situation.
Editorial Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.

The Massive PSLF Overhaul: What You Need to Know

If you’ve been on track for Public Service Loan Forgiveness (PSLF), there have been some recent changes that may impact you and could make your life easier.

Some federal loans that were previously ineligible are now eligible for tax-free forgiveness. Your payment history on these loans will count toward the 120 necessary payments. There are numerous other changes that tend to favor the borrower.

Andrew Paulson, co-founder of Student Loan Advice, a White Coat Investor company specializing in student loan consults, highlights the PSLF overhaul and how different borrowers could be affected, complete with case studies.

If PSLF is not an option for you, taking advantage of surprisingly low interest rates for refinancing private student loans might be a great option. Read on to learn about the recent changes to the PSLF program.



On October 6, the Department of Education (DOE) announced major changes to Public Service Loan Forgiveness (PSLF). A limited waiver was issued temporarily changing the requirements of PSLF. The temporary changes were issued in part to remedy the disastrous PSLF program and to benefit borrowers who took out Family Federal Education Loans (FFEL) and Perkins Loans.

The Heroes Act of 2003 was the mechanism behind the waiver. It has a provision where the DOE can waive or modify statutory and regulatory provision concerning federal student aid for affected individuals in connection with a war or national emergency. The COVID-19 pandemic qualifies and allows these changes to be implemented temporarily.

If you are employed at a non-profit or 501(c)(3) and have federal student loans received prior to 2010, this could be massive for you. Many borrowers will receive months or even years of additional credit, and some will qualify for immediate forgiveness. Follow along to learn more about eligibility and how to apply.


Payments Made on FFEL Loans and Perkins Loans


The most significant change is with FFEL borrowers. In the past, FFEL loans were not considered eligible for PSLF. And the only way to make them eligible was through a direct federal consolidation which erased all prior payment history.

The limited waiver is allowing borrowers with FFEL and Perkins loans to complete a direct federal consolidation and be credited for their past payment history back to October 2007.

This means that if you’ve made any payments on your FFEL or Perkins Loans from October 2007 until now, they will count toward PSLF, as long as you’ve had qualifying employment (full-time at a non-profit or 501(c)(3)).


Payments Made in a Non-Qualifying Repayment Plan


In the past, payments made in a non-qualifying repayment plan wouldn’t qualify for PSLF. However, the limited waiver is allowing borrowers to count payments made in ANY repayment plan as long as they have qualifying employment.


Payments Made on Direct Loans Previous to Consolidation


Some of you have made payments on your direct student loans prior to completing a direct federal consolidation and the consolidation automatically erased your prior payment history. The limited waiver will bring back these payments made prior to consolidation and credit them toward PSLF.


Active Duty Military PSLF Eligibility


The limited waiver also includes a benefit to those of you in the military. Each month you were on active duty counts as a qualifying payment to PSLF, even if you were in forbearance or deferment.


When Do I Need to Apply?


The limited waiver expires on October 31, 2022. Make sure you’ve completed the necessary steps by that time and begin the paperwork as soon as possible.


How to Check Which Loan Types I Have?


Many borrowers are unaware of which loan types they have. Most have a mix of federal and private student loans. Identify which type of federal student loans you have by signing into studentaid.gov, and going down to the loan breakdown section. It will present you with a list of each loan you’ve borrowed. Direct federal loans begin with the word “Direct.” Family Federal Education Loan Program loans begin with “FFEL.”

If you see any FFEL or Perkins loans, you’re probably in luck to have past payments credited toward PSLF.

Parent Plus loans are not eligible for the limited PSLF waiver.


What If I Have Private Student Loans?


Private student loans are not eligible for loan forgiveness. But if your interest rate is 5% or higher, you can look into private refinancing to lower your interest rate. The process is super easy and there are cash bonuses by doing so.


$550 Cashback Bonus+ Variable rates 5.49% - 9.95% APR Fixed rates 5.44% - 9.75% APR Discount for physicians. Inquire for details.
$500 Cashback Bonus for >$100K loan Variable rates (with autopay) 4.99% - 10.89% APR Fixed rates (with autopay) 4.96% - 10.99% APR
$550 Cashback Bonus for >$150k loan / $250 for loans between $50k-$149K Variable rates 5.02% – 8.18% APR Fixed rates 6.61% – 10.68% APR
$1000 Cashback Bonus for >$100K loan and $500 <$100K loan. Variable rates 5.28% - 12.42% APR Fixed rates 5.48% - 10.98% APR
$500 Cashback Bonus** Variable rates 5.32 % - 8.94% APR Fixed rates 4.96% - 8.99% APR
$1000 deposit for >$200K loan Variable rates 4.54% - 11.72% APR Fixed rates 3.95% - 9.19% APR
$350 Cashback Bonus Variable rates 5.28% - 8.99% APR Fixed rates 5.48% - 8.69% APR

Student Loan Refinancing Disclosures


How to Apply for the Limited Waiver?


  1. First of all, figure out which loan type you have: Direct, FFEL or Perkins. If they are direct student loans, you don’t need to consolidate your loans. They should automatically increase your payment count if you have past payments which were previously not counted. If you have FFEL or Perkins loans, you’ll have to complete a consolidation application. I recommend not consolidating them into existing direct loans as this can increase your interest rate.
  2. If you haven’t reached 120 payments yet, enroll into a qualifying repayment plan and pick the lowest monthly payment. If you have reached 120 payments, you can put your account into forbearance until you receive PSLF.
  3. Next, complete a PSLF Application for each of your past qualifying employers. If you’re not sure your employer qualifies, use the PSLF help tool to verify it does. After your employer(s) signs your PSLF application, upload it through FedLoan’s website or mail it in.
  4. Continue submitting your PSLF application annually if you require additional years until PSLF.


What If I’ve Made More Than 120 Payments?


Some of you will qualify for a refund if you’ve made more than 120 payments. If you made 60 payments on FFEL loans and consolidated them to a direct loan and made 80 payments for an aggregate of 140, 20 of those payments will be rebated back to you. If you’ve made 130 payments on FFEL loans and never consolidated them to direct loans, there will be no refund of 10 payments. Only overpayments made on direct student loans will qualify.


Will This Limited Waiver Be Implemented into Law?


PSLF is currently in the process of negotiated rulemaking. While the limited waiver is set to expire, it is our belief that some of the changes implemented will become law and remain for the future.


Learn how to better manage your student loan debt, and explore refinancing to a lower rate with cash back offers up to $1,000! Student Loan Resource Page

Case Studies


Case Study #1

A 35-year-old public school teacher owed $125,000 in FFEL federal loans at 7% after finishing her master’s degree. She earns $110,000 per year and is single. As a new grad, she considered entering Income Based Repayment (IBR) with a monthly payment of $1,134 but decided instead to go with a lower payment in the extended 25-year plan of $883. She has been in the extended 25-year plan for 11 years and thus far, she’s paid $115,735 toward her student loans and still owes $94,448. If she continues on her current plan, she’ll pay $149,307 over the next 14 years. Which in aggregate totals $265,042.

The limited waiver will allow her past 11 years of payment to count toward PSLF. She applies by consolidating her FFEL loans and filling out her PSLF certification forms.

She is now eligible for PSLF and tax-free forgiveness on her outstanding loan balance of $94,448. She saves at least $150,000 ($265,042 – $115,735).

Case Study #2

A 45-year-old physician working at a university hospital owed $400,000 in FFEL federal loans at 7% after graduating medical school. In residency, she made $60,000 per year and as an attending makes $250,000. She is single.

She’s been out of med school for 12 years and has been an attending for eight. She wisely enrolled in Income Based Repayment (IBR) and consolidated her loans her first month as an intern to start making payments immediately to cover some of the interest. In aggregate, she paid $13,806 over four years during her training and her loan balance has swelled to $498,831.

In her last year of training, she heard about PSLF but that her FFEL loans weren’t eligible. She completed a direct federal consolidation to make her loans eligible and had to start her 10-year period to PSLF all over.

Now after eight years of qualifying payments on her direct loans, she has two more years remaining to reach PSLF. In total, she’s paid $276,372 over 12 years and still owes $459,078. Her monthly payment is $2,884 and in total she will pay $345,576 if she stays on track to PSLF for these last two years.

The limited waiver now allows the four years of payments made in training on her FFEL loans to count. She submits her PSLF certification form for her four years of training and now has 144 qualifying payments. Not only does she have her current loan balance of $345,576 forgiven tax-free, she doesn’t have to pay two more years of payments (which would amount to $69,204) and she is returned her last two years of payments (a refund which amounts to $69,204).


If you believe you are eligible for this limited waiver, it is in your best interest to apply. If you need help determining your eligibility or would simply like advice on how to proceed, reach out to us at studentloanadvice.com. We are here to help.



About Andrew Paulson

Hi, my name is Andrew Paulson and I am the Lead Student Loan Consultant and Co-Founder of StudentLoanAdvice.com. I have a Master of Accounting and have a love for business and finance. In addition, I have earned my Certified Student Loan Professional (CSLP) designation. I have a passion for helping people find solutions to complex financial problems and it is for this reason that I teamed up with the White Coat Investor to create StudentLoanAdvice.com.

I have had the pleasure of advising doctors and other health care professionals across the country on how to best manage their student loan debt. Personally, it was a great experience sitting down with my own wife years ago as we made a plan to pay off her nursing school debt. It may seem overwhelming at first, but my clients feel such relief when a solid, actionable plan is in place. You can do this! I sincerely look forward to meeting you and finding solutions to your unique challenges.



Share this post:

9 thoughts on “The Massive PSLF Overhaul: What You Need to Know”

  1. Pingback: Financial Advice for “Low-Income” Doctors - DrDons 'Selected News You Can Use' Media
  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. Pingback: Fawcett’s Favorites 12-6-21 – Financial Success MD
  4. I am wondering how they are going to determine how much to forgive on payments that made prior to consolidation. For example, if I had four loans, all dispersed at different times, sometimes several years apart, all with different payment counts, were all consolidated into two different loans. Also, those two consolidated loans were then consolidated again and added additional loans to be eligible for PSFL. How do they tease out how much of the loan to forgive once the payments for the original loans taken out are at 120, but some of the other loans consolidated have had 72 payments?

    • Rebecca,

      As long as your repayment history overlaps for each loan, the consolidation loan will be credited with the largest number of payments of the loans that were consolidated. For example, if you had 50 qualifying payments on one Subsidized Stafford Loan and 100 qualifying payments on another Subsidized Stafford Loan and you consolidate those loans, you will receive 100 qualifying payments on the new Direct Consolidation Loan.

      Andrew StudentLoanAdvice

  5. In the past the consolidation wiped out your past loan payments. Now with some of the recent changes to PSLF you’ll be able to carry over those payments you made on your undergrad loans pre-consolidation.

    And this should automatically happen if your undergrad loans were consolidated into a direct federal loan.

    Andrew StudentLoanAdvice

  6. My situation is I had loans from undergrad, worked for a university for 1.5 years while applying to medical school and paid towards my perkins and other loans during that time. Did pay it down but not entirely. Then went to medical school. Consolidated my loans right after graduation and paid IBR during residency. Can the payments from working after undergrad count towards the PSLF requirements or no since I didnt have the med student loans at the time?

    • Hi John,

      The 1.5 years of payments you made on your undergrad student loans prior to medschool should be credited to PSLF only for your undergrad loans if you had qualifying employment (full time at 501c3 or nonprofit).

      Andrew StudentLoanAdvice


Leave a Comment


Doctor Loan up to 100% Financing

Related Articles

Join Thousands of Doctors on the Path to FIRE

Get exclusive tips on how to reclaim control of your time and finances.