Student Loan Forgiveness for Public Service

Student loan forgiveness is available for student loan borrowers who pursue careers in the public service field. To qualify for Public Service Loan Forgiveness (PSLF), borrowers must make 120 payments on Direct Loans while working full-time in a position at a public service organization. After 120 payments have been made, the borrower can apply to have the remaining student loan debt  balance forgiven. Only payments made after October 1, 2007 under certain repayment plans will be considered qualifying payments. Payments made on defaulted student loans will not count towards debt forgiveness.

Loans Eligible for Student Debt Forgiveness (PSLF)

Direct Student Loans :

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans (For Parent PLUS borrowers, the parent’s employment must qualify)
  • Direct Consolidation Loans
  • The following loans may become eligible for PSLF only if first consolidated into a Direct Consolidation Loan:
    • Federal Family Education (FFEL) Loans:
    • Subsidized FFEL Stafford Loans
    • Unsubsidized FFEL Stafford Loans
    • FFEL PLUS Loans (For Parent PLUS borrowers, the parent’s employment must qualify)
    • FFEL Consolidation Loans (excluding joint spousal consolidation loans)
    • Federal Perkins Loans
    • Certain Health Professions and Nursing Loans

Eligible Repayment Plans for PSLF:

  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)
  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)
  • Standard Repayment Plan*
  • Any plan where the monthly payment is greater than or equal to the required payment on the Standard (10 Year) Repayment Plan.

*While the Standard (10 Year) Repayment Plan is a qualifying repayment plan for the Public Service Loan Forgiveness Program, borrowers who remain on the Standard Plan for 10 years will have no balance to forgive, due to the loan being paid in full. As a result, in order to benefit from Public Service Loan Forgiveness, borrowers will need to enroll in one of the income-driven repayment plans and begin making lower payments.

Borrowers who enroll in one of the income-driven repayment plans may experience negative amortization. This happens when income-driven payments are too low to cover the monthly interest that accrues on the loan. If the borrower qualifies for Public Service Loan Forgiveness after 10 years of payments, the borrower will not have to repay the balance caused by negative amortization. Yet, borrowers who do not complete the Public Service Loan Forgiveness requirements may have to pay back a higher loan balance as a result of the negative amortization.

Examples of organizations that may qualify for PSLF:

  • A government organization, including:
    • federal, state, local, or tribal organizations, agencies, or entities
  • A 501(c)(3) non-profit, including:
    • includes most non-profit private schools, colleges, and universities
  • A private, non-profit organization (excluding partisan political organization and labor union) that provides a public service, including:
    • Emergency management
    • Military service
    • Public safety
    • Law enforcement
    • Public education
    • Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten)
    • Public service for individuals with disabilities and the elderly
    • Public health
    • Public interest law services
    • Public library services or school library or other school-based service

For those working in religious organizations, employment will not qualify for PSLF if position includes religious instruction, worship, or any form of proselytizing.

 Student Loan Forgiveness for Public Service Essentials

  • Payments must be full, separate, and on-time. Payments are considered on-time if they post within 15 days of the due date.
  • Even if payments on the income-driven repayment plan are set to zero, the payments still count as qualifying payments for PSLF as long as the borrower is working at a qualifying organization full time.
  • Payments do not need to be consecutive to count towards PSLF. Borrowers will not lose credit for payments made while working at a qualifying employer if the borrower leaves that position, to later return to public service work. As long as 120 cumulative payments are made while working at a qualifying public service organization, the borrower can qualify for forgiveness.
  • If a borrower chooses to pay extra, they need to request that the extra payment does not advance their payment due date. Payments made while the loan is paid ahead will not count towards PSLF.

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