5 PSLF Mistakes That Cost Everything

Last updated: December 2025 · 7 min read

Public Service Loan Forgiveness promises complete tax-free forgiveness after 120 qualifying payments. But the path is littered with traps. These five mistakes are devastatingly common—and often irreversible.

Mistake #1: Consolidating Direct Loans Unnecessarily

If you already have Direct Loans and consolidate them, your PSLF payment count resets to zero. All your previous qualifying payments are erased.

This happens because consolidation creates a new loan. The new loan has no payment history—even though you've been making payments for years.

Who makes this mistake: Borrowers who consolidate to "simplify" their loans, or who are incorrectly advised by servicers to consolidate.

The Fix: Before consolidating, check your loan types at StudentAid.gov. If they're already Direct Loans, do NOT consolidate. See our PSLF Consolidation Paradox guide for details.

Mistake #2: Paying More Than Required

If you're pursuing PSLF, paying extra on your student loans is throwing money away.

PSLF forgives your remaining balance after 120 qualifying payments. That's 120 payments, period. Making larger payments doesn't speed up the timeline—it just reduces the amount that gets forgiven.

Example: If your IDR payment is $300/month but you pay $500/month, those extra $200 payments don't count as extra payments. You're just reducing your future forgiveness amount.

The Fix: Pay exactly what your income-driven repayment plan requires—no more. Put extra money toward other financial goals.

Mistake #3: Not Certifying Employment Annually

Many borrowers work for 10 years in public service, make 120 payments, then submit their first Employment Certification Form—only to discover their employer didn't qualify, or their payments didn't count.

By then, it's too late to fix. They've lost years of potential progress.

The Fix: Submit the PSLF Employment Certification Form every year and whenever you change employers. This confirms your employer qualifies and tracks your payment count in real-time.

Mistake #4: Using the Wrong Employer EIN

If you're a contracted employee—common for physicians, PAs, and NPs—you may be paid by a staffing company while actually working at a qualifying hospital or nonprofit.

The EIN on your W-2 is the staffing company (not qualifying). But your actual workplace may be a 501(c)(3) hospital (qualifying). Using the wrong EIN means your certification gets rejected.

The Fix: Use the EIN of the qualifying organization where you actually provide services, not the payroll company. Have that organization sign your Employment Certification Form.

Mistake #5: Staying in SAVE Forbearance

If you were on the SAVE plan, you've been placed in administrative forbearance. These months do NOT count toward PSLF—and interest is accruing.

Every month you stay in this forbearance is a month of lost progress toward your 120 payments, plus growing debt.

The Fix: Apply to switch to IBR or PAYE immediately at studentaid.gov/idr. Both plans qualify for PSLF. See our SAVE Forbearance guide.

The Bottom Line

PSLF works. Hundreds of thousands of borrowers have received forgiveness. But the program is unforgiving of errors. Verify everything annually. When in doubt, submit an Employment Certification Form. And never consolidate Direct Loans.