Public Service Loan Forgiveness (PSLF)

By Daniel SachsUpdated September 20, 2017


What is the PSLF program?

The PSLF Program provides people in public service jobs with a path to debt forgiveness after 10 years. The Program forgives the remaining balance on your federal loans after you have made 120 monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. To receive forgiveness you must remain employed with a qualifying employer at the time you apply for and receive forgiveness for your loans. Under the program, the full amount of your federal student loans is currently eligible for forgiveness.

An estimated 25% of the US workforce is employed in what can be classified as public service, and many may be eligible for loan forgiveness under the PSLF Program. However, borrowers regularly complain that they are not receiving sufficient information about eligibility for these benefits. As a result, there is often significant confusion as to which types of employment are eligible under the Program. As you’ll see below, areas of public service employment that are eligible for PSLF go well beyond purely government jobs.

Employment eligibility

You must be employed with one of the following types of organizations to qualify for PSLF:

  • Government organizations at any level (federal, state, local, or tribal)
  • Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
  • Other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3), if their primary purpose is to provide certain types of qualifying public services
  • AmeriCorps or Peace Corps volunteer

Note that for-profit as well as not-for-profit religious and partisan organizations do not qualify for PSLF.

To qualify for PSLF you must work on a full time basis for a qualifying employer. For PSLF, you are generally considered to work full-time if you meet your employer’s definition of full-time or work a minimum of 30 hours per week, whichever is greater. If you are employed in more than one qualifying part-time job simultaneously, you may meet the full-time employment requirement if you work a combined average of at least 30 hours per week with your employers.

Loan qualification

Which types of loans qualify for PSLF?

  • Direct Consolidation Loans
  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS Loans

While the Federal Family Education Loan (FFEL) Program and the Federal Perkins Loan Programs do not qualify for PSLF, they may become eligible if you consolidate them into a Direct Consolidation Loan. However, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF.

Requirements

  • Make 120 qualifying payments
    • After October 1, 2007
    • On-time (no later than 15 days after the scheduled due date)
    • Each month, satisfying the installment amount due for that month
    • When the loan is being actively billed, and is not in a default status
  • Work full-time at a qualifying employer
  • Have eligible loan types
  • Payments must be under a qualifying repayment plan. Qualifying plans include:
    • Income-Based Repayment (IBR)
    • Pay As You Earn (PAYE)
    • Revised Pay As You Earn (REPAYE)
    • Income-Contingent Repayment (ICR)
    • 10-year Standard Repayment (Even though the 10-year Standard Repayment Plan is also a qualifying repayment plan for PSLF, you cannot receive PSLF unless you enter an income-driven repayment plan)

Application process

Applicants should complete and submit the Public Service Loan Forgiveness Employment Certification Form annually or when you change employers. Send the completed form, with your employer’s certification, to FedLoan Servicing.

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