The Public Service Loan Forgiveness Program (PSLF) has been specifically developed to help people continue to work in public service jobs. With this program, and under certain criteria, borrowers may qualify for forgiveness of the outstanding balance of their student loans.
There are only specific loans that are applicable and circumstances that permit eligibility.
What loans are eligible for forgiveness?
The loans received under the William D. Ford Federal Direct Loan (Direct Loan) Program are the only loans eligible under the PSLF. Any other student loan programs are not eligible for PSLF.
How many payments must I have made before I can be considered under the PSLF Program?
You should have made 120 on-time, full, scheduled, monthly payments on your Direct Loans. Payments made after October 1, 2007 qualify. These payments must have been made under a qualifying repayment plan.
You should have been in full-time employment at a qualifying public service organization when you made these payments.
What are on-time, full, scheduled, monthly payments?
On-time payments mean that your federal loan service received the payment no later than 15 days after the scheduled payment due date.
Full payments mean payments on your loan that equals or exceeds the amount you are required to pay each month.
Scheduled payments mean those that are made under a qualifying repayment plan, once your federal loan servicer has billed you for the month’s payment.
What kinds of public service employment qualify?
The types of public service employment include any with the state, federal or local government agency or entity. Also included are any organization or a not-for-profit organization designated tax-exempt by the Internal Revenue Service (IRS).
What is full-time employment?
The PSLF state that their definition of full time employment comprise of at least an annual average of 30 hours per week.
For teachers, or other works of a public service organization, if you are contracted for at least eight out of 12 months, you will meet the full-time standard if you work an average of at least 30 hours per week during the contractual period and then receive credit by your employer for a full year’s worth of employment.
For those that are employed in more than one qualifying part-time job at the same period of time, you may meet the full-time employment requirement if you work a combined average of at least 30 hours per week with your employers.
How can I keep track of my eligibility?
Making 120 payments will take ten years, and some people may find this difficult to keep track of.
In order to make it easier to keep a record of payments, the PSLF have created an Employment Certification for Public Service Loan Forgiveness form. Individuals should submit the form to the PSLF where they will help with tracking payments and periods of qualifying employment.
What should I do after I become eligible for PSLF?
Once you have made your 120th qualifying payment, you should submit the PSLF application to receive loan forgiveness.
At present, the application is under development but will be available prior to the date when the first borrowers will be eligible for PSLF Program forgiveness, in October 2017.
At the time you apply for loan forgiveness you must be working for a qualified public service organization and at the time the remaining balance on your loan is forgiven.
For more information visit studentaid.ed.gov