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Public Service Loan Forgiveness: What It Is, How It Works

PSLF discharges borrowers' remaining federal student loan balance after they make 10 years' worth of payments while working for the government or a nonprofit.
May 1, 2019
Loans, Student Loans
Public Service Loan Forgiveness
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Public Service Loan Forgiveness is a federal program designed to encourage students to enter relatively low-paying careers like firefighting, teaching, government, nursing, public interest law and the military.

You must make 10 years’ worth of payments while working for the government or a nonprofit before qualifying for tax-free forgiveness.

PSLF is worthwhile for graduates who plan to pursue a career in public service anyway, says Kristin Bhaumik, an associate director in the financial aid office at the University of Michigan. “Ten years is a very long time for most people to plan out their future just for loan forgiveness,” she says.

How to get Public Service Loan Forgiveness

PSLF news

Public Service Loan Forgiveness began in 2007, meaning the first batch of borrowers became eligible for relief in 2017.

But less than 1% of borrowers who have applied for PSLF have had their loans discharged as of March 2019, according to data from the Department of Education.

Public Service Loan Forgiveness Program DataAs of 6/30/2018As of 9/30/2018As of 12/31/2018As of 3/31/19
Borrowers submitting applications28,08141,22153,74973,554
Total applications submitted32,60149,66965,50086,006
Status of processed applications
Approved by PSLF servicer289423610864
Denied for not meeting program requirements20,52132,40942,56056,353
Denied for missing information8,10311,89215,12318,785
Status of loan discharge
Borrowers with discharges processed96206338518
Dollar value of loans discharged (in millions)$5.52$12.32$21.13$30.68
Source: U.S. Department of Education Office of Federal Student Aid

How to get Public Service Loan Forgiveness

Most borrowers are denied because they don’t meet the program’s many requirements. But having your loans forgiven is possible if you follow the program’s rules to a T.

Have the correct type of loans, or consolidate

Only loans that are part of the federal Direct Loan Program are eligible for PSLF. Private student loans aren’t eligible.

Progress you’ve made toward forgiveness will be erased when you consolidate.

You can consolidate other types of federal student loans — Federal Family Education Loan loans or Perkins loans — to make them PSLF-eligible. Do this as soon as possible, because any progress made toward forgiveness will be erased when you consolidate.

If you qualify for Perkins loan cancellation, which offers forgiveness after five years of public service, pursue that option and don’t consolidate your Perkins loans. You can still participate in PSLF with your other federal student loans.

Work full time for a qualifying employer

Eligibility in the program depends less on the type of work you do and more on who your employer is. Qualifying employers include:

  • Government organizations at any level.
  • 501(c)(3) nonprofits.
  • AmeriCorps or the Peace Corps.
  • Nonprofit organizations that don’t have 501(c)(3) status but provide a qualifying public service as their primary purpose.

Complete an employment certification form to confirm that your employer qualifies. Send the form to FedLoan Servicing, the contractor that oversees PSLF for the department. When the form is processed, your loans will be transferred to FedLoan to be serviced going forward.

Submit a new form annually, or whenever you change jobs, to make sure you’re on track for forgiveness. You’re not required to submit the form every year, but it’s a good idea to do so for your records. You can also apply for forgiveness once you’re eligible and certify your employment retroactively.

You must work for your qualifying employer full time, which amounts to at least 30 hours per week. If you work part time for two qualifying employers and your time averages at least 30 hours per week, you might still be eligible.

Switch to income-driven repayment

To count toward PSLF, your payments must be made on the standard 10-year plan or on one of the four income-driven repayment plans.

You’ll save the most money if you make all qualifying payments on an income-driven plan.

You’ll save the most money if you make all qualifying payments on an income-driven plan. If you make all payments on the standard plan, you’ll pay off the debt by the time you’ve made enough payments to qualify for PSLF.

Payments made on the graduated or extended federal repayment plans don’t typically count toward PSLF. But under the Temporary Expanded Public Service Loan Forgiveness program, which the Trump administration rolled out in March 2018, payments made on those plans may still qualify.

Make 10 years’ worth of payments

You must make 120 monthly loan payments. These payments must be made:

  • For the full amount due.
  • On time, meaning within 15 days of your due date.
  • On or after Oct. 1, 2007.
  • While you’re working full time for a qualifying employer and on a qualifying repayment plan.

Each qualifying payment must be a required payment, meaning extra payments don’t count. Payments also don’t count if they’re made while you’re in school, in deferment or forbearance, during a grace period, or if your loans are delinquent or in default.

The payments do not need to be consecutive. For example, you could make some qualifying payments, pause payments through forbearance and then resume repayment, picking up where you left off.

You can also change jobs, switching between qualifying employers and nonqualifying employers. However, payments only count toward PSLF when you’re working for a qualifying employer.

Apply for forgiveness

Once you’ve met all of the above requirements, submit the Public Service Loan Forgiveness application. You must be working full time for a qualifying employer when you apply.

Along with the application, you’ll need to submit an employment certification form for your current employer and each employer you had while making the 120 payments. If you’ve been completing these forms regularly, you’ll need to submit only one for your current employer.

FedLoan Servicing will notify you when it receives your paperwork. You aren’t required to make loan payments while it processes your application.

Don’t qualify for PSLF? You have other options

You’re not alone if you don’t meet PSLF’s strict requirements. You also have other options:

  • Explore other paths to forgiveness. PSLF isn’t the only federal student loan forgiveness program, although it’s one of the most popular. However, watch out for loan forgiveness scams.
  • Stay on income-driven repayment. All four income-driven plans will forgive your remaining balance after 20 or 25 years, depending on the plan. However, unlike with PSLF, the forgiven amount is taxable.
  • Consider refinancing. Student loan refinancing can save you money and help you become debt-free faster by lowering your interest rate. However, once you refinance federal loans, they’re no longer eligible for forgiveness programs or income-driven repayment. You need stable finances and good credit to qualify.

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