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What Is Public Service Loan Forgiveness (PSLF)?

Public Service Loan Forgiveness (PSLF) is a federal program established in 2007 designed to help individuals working full-time for public service organizations. After ten years of qualifying payments, Public Service Loan Forgiveness will forgive your remaining debt if you make 120 qualifying monthly payments and work at least one day per month for a qualified employer.

Those who work in the public sector can take part in the Public Service Loan Forgiveness Program to reduce or eliminate their student loan debt. What does this mean? It means that if you qualify, the U.S. Department of Education will forgive your remaining Federal Direct Stafford Loans and Federal Direct Graduate PLUS Loans after 120 qualifying payments (10 years). These are the few things you need to know before applying for this program, so be sure to read about it more here!

What can the Public Service Loan Forgiveness Program do for you, and why is it important to know about it?

If you have a public service job, the program will forgive your remaining Federal Direct Stafford Loans and Federal Direct Graduate PLUS loans after 120 qualifying payments (ten years). This information is essential to know because it may help you lower or clear debts quicker.

The PSLF Program allows borrowers who are enrolled in an income-driven repayment plan or who make income-based payments to have their remaining balance forgiven after they have made 120 qualifying monthly federal student loan repayments.

The program provides relief for borrowers in public service jobs whose work plays a vital role in society but cannot fully pay off their loans because of those low wages. This program also removes a barrier that might prevent you from working in these types of professions.

Unfortunately, the requirements are more complicated than you can imagine. The U.S Department of Education began reviewing applications for PSLF in 2017. Unfortunately, 99% were announced as ineligible by the end of June 2018.

Difference between PSLF and TEPSLF

PSLF can forgive the remaining balance of your Direct Loans if you meet the specific eligibility criteria. The only qualified repayment plans are specifically income-driven ones; however, to be eligible for PSLF, you will need to have made 120 qualifying payments before and after October 1, 2007.

Temporary Expanded Public Service Loan (TEPSLF) forgives the remaining balance on your Direct Loans. It is still available if you do not qualify for PSLF because some payments were made under a repayment plan. TEPSLF is a temporary program and will end once a certain amount of loan forgiveness has been granted.

Congress created TEPSLF due to the high ineligibility rates. This program is a new opportunity to relieve borrowers of direct student loans who made some or all of their on-time, monthly payments in the wrong repayment plan. Unfortunately, this is a common reason that your application is not eligible. If you find yourself in this common situation, here are four things you should do to be considered for TEPSLF:

  1. Check your eligibility for PSLF.
  2. Read the TEPSLF requirements.
  3. Request TEPSLF consideration.
  4. How much can you save with PSLF – what are the benefits of this program.

To be eligible for the Public Service Loan Forgiveness program, a student loan holder must make 120 qualifying monthly payments and work full-time for a public service employer.

More than ten years ago, Congress enacted the Public Service Loan Forgiveness program (PSLF), good student loan forgiveness to workers who made a big part of society by dedicating their careers to the public sector. This program rewards students for choosing or compensating students for choosing fewer careers in the public sector.

More than 500,000 people in the U.S that owe more than $100,000 in debt have submitted employer certification forms for PSLF. This program allows former students who work in the public sector to have their debt forgiven after ten years.

The Public Service Loan Forgiveness program is offered to public service workers in federal, state, and local governments and at private nonprofits.

Who qualifies for PSLF – Who should apply if they qualify?

If you qualify for PSLF, it is highly recommended that you apply. However, it might not be easy to find out if you are eligible or not without consulting a professional and qualified lawyer.

The PSLF program provides relief for borrowers in public service jobs, whose work plays an essential role in society.

Several criteria determine the eligibility for the PSLF Program:

  • You must be working full-time or at least 30 hours per week for a qualified employer.
  • Federal Direct loans and federal loans consolidated into a federal consolidation loan are also eligible. In contrast, private student loans, Federal Perkins Loans, and Federal Family Education Loans do not qualify for PSLF.
  • Make 120 qualifying payments.
  • Loans under the William D. Ford Federal Direct Loan (Direct Loan) Program.

For you to benefit from PSLF, you will have to change to an income-driven repayment plan. These programs offer an affordable monthly income because it will be based on your income and can be extended up to 25 years. Qualifying repayment plans are:

  • Income-Contingent Repayment Plan (ICR Plan)
  • Income-Based Repayment Plan (IBR)
  • Pay As You Earn Repayment Plan (PAYE)
  • Revised Pay As You Earn Repayment Plan (REPAYE)

Once you switch to an income-driven repayment plan, PSLF will forgive your loan balance after you make 120 qualifying payments.  

Which jobs qualify for Public Service Loan Forgiveness?

PSLF is designed to benefit students who work in public services, including many different types of jobs. Some examples are:

  • Law Enforcement
  • Public Safety
  • Emergency Management
  • Public service for individuals with disabilities
  • Public library sciences
  • Public service for the elderly
  • Nurses
  • Professionals engaged in health care
  • Public Education
  • Family service agency
  • Public Interest Law Services

How to apply for Public Service Loan Forgiveness?

PSLF is a program that allows student debt holders to have their loans forgiven after making 120 monthly payments. Programs like this one are intended to help public service workers continue to work because high levels of debt make it impossible for them to do so otherwise. However, it is crucial for borrowers looking into this program to know that it is not a free pass. You still have to make all of the payments like anyone else, and you will be paid back for any amount forgiven at tax time as an additional income on top of your regular paychecks.

Once you have met all of the above requirements, you can apply for PSLF.

For you to qualify, you must have an eligible loan, a qualifying employment period of at least ten years in the public sector, and 120 monthly payments on your federal student loans during this time (including deferments).

If you meet all the requirements, you can apply by completing the PSLF Certification and Application form. Requesting TEPSLF consideration will help make sure that we update our records with your eligibility status. In addition, it is taken into account when calculating any payment forgiveness amounts you are due under the PSLF program.

You do not need to request approval before making each contribution payment if you are enrolled in one of these repayment plans: 

  • Income-Based Repayment (IBR);
  • Income-Contingent Repayment (ICR);
  • Pay As You Earn Repayment Plan; or
  • Revised Pay As You Earn Repayment Plan.

What are some common misconceptions about PSLF and how to avoid them?

There are many misconceptions about the PSLF program. For example, they say that you have to work in public service for ten years before applying for PSLF, but this is not true. Another misconception is that federal loans cannot be used with PSLF, which is not true, considering most people who qualify for PSLF are national loan holders.

You can apply for the PSLF program regardless of your income status or if you have attended graduate school in addition to undergraduate studies. There are many other misconceptions about this program. Still, these two examples should be enough to establish that there is a lot of information that might not necessarily be true.

Is there a way to find out whether or not I am eligible for PSLF before I start paying my loans back or after I have been working in public service for ten years?

While there are many ways to determine if you are eligible for the PSLF program, you would never know until you began to pay off your loans. One standard method would be consulting a professional and qualified lawyer for your case. You can also use this eligibility calculator if you want an overview of how likely you are eligible for this program.

If you find out that you are or are not eligible, it is always recommended to apply. There is no harm in trying your luck!

What counts as a government employer for the PSLF Program?

Any government contractor is not considered a government employer.

For the PSLF program, a federal (state, local), a tribal agency is considered a government employer. Employers such as public elementary schools, colleges and universities, public service agencies, and U.S military service are included.

Why should I consider enrolling in an income-driven repayment plan while waiting on my application?

Income-driven repayment plans (IDR) can be a useful option for those waiting on their application to be processed by the Education Department. However, IDRs are based on your income, so they will change with you – if your income is high one year but low another, this will affect how much you are paying.

Many people who qualify for Public Service Loan Forgiveness are also federal loan holders. This means that their loans can be used to meet the qualification criteria of an IDR, which allows them to capitalize on this option while they are waiting for the PSLF application processing.

What happens to my loans if I am denied the program?

It is important to know what will happen next after applying for the PSLF program but being denied. If you are rejected from this program, ideally, someone should contact you about why they decided to deny the application before anything else happens. However, if they do not call or email you about the denial, then you should be prepared to contact them directly or email the Education Department.

If all goes well and they decide that you are not eligible for PSLF after reviewing everything with you, then this will mean that your loans will have a standard repayment plan – which means no unique repayment plans for those who are denied from the program.

Another option to consider if you are not eligible

If you are not eligible for the Public Service Loan Forgiveness program, there is still hope. Other options to consider are Income-Contingent Repayment or Pay As You Earn, which may be more favorable to your current financial situation, and qualify your loans for forgiveness after twenty years of repayment. 

Consider student loan refinancing to consolidate student loans. Refinancing is an excellent option for those looking to refinance their loans and get better rates, lower monthly payments, or both. 

General information about Public Service Loan Forgiveness Program:

  • You have worked at least 30 hours per week in public service. This includes a tax-exempt not-for-profit organization under Section 501(c)(20) of the Internal Revenue Code.
  • You have ensured that your loans are in a direct repayment plan (e.g., standard, graduated). If you currently do not qualify for this program, visit an online student loan consolidation site to consolidate all of your federal student loans together into one monthly payment and make sure you are in a direct repayment plan.
  • Your employer has been verified as working for the Public Service Loan Forgiveness Program (PSLF).
  • Internal Revenue Service (IRS), an entire student loan is forgiven under Public Service Loan Forgiveness is not taxed. To learn more, you should ask IRS or consult a tax advisor.
  • PSLF does not require any minimum income. But, since your required monthly payment amount is based on your income, your income level throughout your public service job can be a factor if your remaining loan balance can be forgiven after making 120 qualifying payments.
  • Future availability of PSLF is not guaranteed. Congress created the PSLF Program, and Congress could change or end the PSLF Program.
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