To qualify for Public Service Loan Forgiveness (PSLF), you must make 120 total monthly payments while:
- Enrolled in an Income-Driven Repayment Plan
- Have Federal Direct Loans or have consolidated other federal student loans
- Working full-time for a government agency or certain types of nonprofit organizations
Before Graduating or Immediately Upon Graduation – check these eligibility requirements first and early on to plan for Public Service Loan Forgiveness:
- Check what kind of loan you have by logging in to www.StudentAid.gov.
- Confirm that you have a Federal Direct Loan that is not in default. This is the only federal loan that is eligible for PSLF.
- If some of your federal student loans are not Direct Loans (FFEL and Perkins Loan), they need to be consolidated to qualify; this is likely your situation if you borrowed before 2011. Payments on FFEL or Perkins Loans made before you consolidate will not be counted. Depending on your circumstance there may be pros and cons to consolidating in order to apply for PSLF.
As You Start Working in Public Service – Document Your Employment Using the PSLF Application Form:
- Submit a PSLF application form every year or when you change employers. You’ll want to have documented every qualified employer where you worked while you made a payment towards PSLF. Especially if you have multiple public service employers.
- Make sure that your PSLF application form has all required fields completed. Incomplete forms or inconsistencies may affect your eligibility. If you do not meet a PSLF qualification, the response letter to your application will provide more information.
- Make sure you have all the information required: employer’s address, Employer Identification Number (EIN) which can be found on your Wage and Tax Statement (W-2), and consistent info with your previous application.
As You’re Working in Public Service – Submitting your forms using the PSLF Help Tool:
- Log in with your FSA ID. The tool will import your loan info automatically.
- The Tool will ask a series of questions to confirm you’re on the right track to loan forgiveness and that your employer qualifies for PSLF.
- Find out if your loans qualify and options available to you if they don’t.
- Get a signature from an “authorized official” at your employer, typically someone in your human resources office.
- Print and mail your completed form. Save and archive your documentation (PSLF application, response letters from FedLoan Servicing, and employment documents) in case there are any discrepancies.
After Working at Least 10 Years in Public Service – Applying for PSLF and Getting Your Loan Forgiven:
- Upon making your 120th payment you’re ready to apply for PSLF. You must still be working for a qualified employer when you submit your application.
- Gather your current employer information and any documentation used to prove previous employers qualified while you made payments towards PSLF.
- Complete and submit the PSLF application by using the PSLF Help Tool (see above), by mail, or fax.
- If your PSLF application is approved, then all remaining balance including interest and outstanding principal will be forgiven. Any payments made after the required 120 will be refunded as well.
Public Service Loan Forgiveness (PSLF) is a federal program that could erase your federal student loan debt. This program is designed to support people working in lower-paying, but vitally important public service jobs, like non-profit work, social work, healthcare, and others.
It is important for you to understand that there are requirements you must meet to receive this loan forgiveness – your student loans won’t just be automatically forgiven after a couple of years of public service work. There are several requirements you must meet to receive public service loan forgiveness. You must meet these requirements for a total of 120 monthly payments, so it is important that you are on track early on. Make sure to read all the requirements carefully. After meeting all the requirements, and after you’ve paid 120 monthly payments (that’s at least 10 years of cumulative payments), you will need to submit an application to apply for PSLF to have your debt forgiven. Here are some steps you can take to ensure you receive the loan forgiveness you are expecting.
- Have the Right Type of Loan – Federal Direct Loans
- Federal Direct Loans are the ONLY type of loan that qualifies for PSLF. If you have a different type of federal loan, for example, Family Federal Education Loans (FFEL) or Perkins, don’t worry! You can consolidate your loan to qualify. Word of caution here – there are many different factors to consider when consolidating a loan as this creates a new loan with new terms. Depending on your circumstance there may be pros and cons to consolidating in order to apply for PSLF.
- Have the Right Type of Employer:
- You must work full-time for a qualifying employer while you are making your 120 monthly payments to be eligible for PSLF. Working full-time means working at least 30 hours per week or meeting your employer’s definition of full-time. This is about who your employer is, not your job title. Many qualifying employers include non-profits, government jobs, and public service work. Check if your employer qualifies by asking your Human Resources Department.
- Be in the Right Type of Repayment Plan – Income-Driven Repayment:
- To benefit from PSLF, you should repay your federal student loans under an income-driven repayment (IDR) plan. Income-driven repayment plans require you to update (or “recertify”) your income/family size each year. Income-driven repayment plans can be highly beneficial for borrowers that have lower-incomes. Payments can be as low as $0.00 per month, especially for borrowers facing a loss of income or job, and still, qualify towards the required 120 monthly payments for PSLF.
There are other federal repayment options that do NOT count towards PSLF. These include Extended Repayment, Graduated Repayment, and Extended-Graduated Repayment. Also, you can’t make a qualifying payment while your loans are in any of these statuses: in-school status, the grace period, deferment, forbearance, and default.
You can’t qualify for PSLF faster by making larger payments. In fact, making larger payments can create a domino effect that disqualifies future payments as well. So, you will need to make a payment equal to the exact amount owed for that month to receive credit for a qualifying PSLF payment.
For full PSLF requirements and details go to www.studentaid.gov.