The Public Service Loan Forgiveness program promises huge benefits for students with crushing education loans and debt. If you have student loan debt and work for the government or a not-for-profit organization, you could be able to receive loan forgiveness through the PSLF.
The Public Service Loan Forgiveness program was developed to reward public service employees by forgiving the remaining balance on qualifying direct student loans for full-time employees. If you are eligible, this could save you thousands of dollars in student loan payments and interest expense, so let’s find out if you qualify!
How Does Public Service Loan Forgiveness Work?
The Public Service Loan Forgiveness program is a federal government program that has the intent of getting individuals to enter into – and remain in – public service occupations. In doing so, the program provides the incentive of forgiving the student loans of those who qualify.
Depending on just how much student loan debt you have accumulated, the PSLF program can be extremely valuable. However, in order to obtain loan forgiveness, there are some qualification criteria that must first be met. For instance, there are only certain types of student loans that may be forgiven through this program.
What Type of Loans Are Eligible?
Under the Public Service Loan Forgiveness Program, any non-defaulted direct loan will be eligible for forgiveness, including:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct Consolidation Loans
- Direct PLUS Loans (for parents and graduate students)
In addition, there are other types of federal student loans that may be able to become eligible for forgiveness under this program, provided that the loan(s) are consolidated into a Direct Consolidation Loan. Other qualifying federal loans may include:
- Federal Family Education Loan (FFEL) Program loans, including the Subsidized Federal Stafford Loans, Unsubsidized Stafford Loans, Federal PLUS Loans (for parents and graduate or professional students), and Federal Consolidation Loans (except for joint spousal consolidation loans)
- Federal Perkins Loans
- Certain Health Professions and Nursing Loans
It is important to note that only the loan payments that are made on the Direct Consolidation Loan will be counted towards the 120 required payments that are necessary to qualify for loan forgiveness.
How Do You Qualify For The PSLF Program?
In order to qualify for loan forgiveness under the Public Service Loan Forgiveness Program, there are several criteria that you will need to meet.
First, it is essential that you are not in default on any of the loans in which you are requesting the forgiveness. Then you will need to be employed full-time by a public service organization at the time that you apply for the loan forgiveness, as well as at the time that the remaining balance on your eligible loan(s) is forgiven.
You must also be a full-time employee of a public service entity when you are making each of the required 120 qualifying loan payments for your 10-year loan.
Qualifying Public Service Jobs
Some of the public service jobs that qualify include:
- Law enforcement
- Military service
- Public safety
- Emergency management
- Public interest law services
- Early childhood education
- Public education
- Public library services / School library or other school-based services
Furthermore, you could work for a government organization, which includes a federal, state, local, or a tribal entity or agency. You could also be employed by a public family or child services agency, as well as a tribal college or university.
What About Non-Profits?
Not-for profit organizations as well as tax-exempt entities under IRC Section 501(c)(3) also qualify as public service organizations for the Public Service Loan Forgiveness Program.
Who Is Considered A Full-Time Employee?
In order to be considered as a full-time employee of an organization or entity, you must work an average of at least 30 hours per week. This does not include time that is spent participating in activities such as worship services, religious instruction, and / or proselytizing.
In the case of teachers, if you work under a contract for at least 8 months in a calendar year, then you qualify as meeting the full-time employment criteria if you worked, on average, 30 hours per week and received credit from your employer for the full year’s worth of employment.
Qualifying Repayment Plans
As part of the eligibility criteria, you will also need to be enrolled in a qualifying repayment plan and have made 120 monthly (or 10 years) of payments. The payment plans that qualify include the following:
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
You may also be in a standard repayment plan, or in any other payment plan that has monthly payments that are equal to or more than standard monthly loan payments.
Should You Consider Public Service Loan Forgiveness?
Prior to moving forward with the Public Service Loan Forgiveness Program, it will be important to ensure that doing so is right for you. For example, the PSLF program is typically the most valuable to those who have high loan balances in relation to their income.
If, however, you have a low student loan balance remaining, then it isn’t likely that you will have a lot left to be forgiven. This is especially the case after ten years of making the loan repayments.
How To Get Your Student Loans Forgiven
If it turns out that the Public Service Loan Forgiveness Program is the right option for you, then there are some steps that you should take in order to move forward. First, it will be important that you keep track of your eligibility. In doing so, the U.S. Department of Education has created a process for helping you to do so.
The Employment Certification for Public Service Loan Forgiveness Form, also referred to as the Employment Certification form, can be found here. You should complete the form and then submit it to FedLoan Servicing (PHEAA), the PSLF servicer, at the address that is listed in Section 6 of the form.
Although you are not required to submit this form, it can help you in tracking your student loan payment progress – and in doing so, it can be extremely motivating to watch how close you are moving towards your loan forgiveness eligibility.