If you work full-time in a public service job, you may qualify for Public Service Loan Forgiveness. It is possible, if you qualify, to have all or some portion of your remaining federal student loan balance forgiven. If your loan is forgiven, you are no longer responsible for repaying that remaining portion of the loan. This program is called the Public Service Loan Forgiveness Program or PSLF.
The PSLF Program is intended to encourage individuals to enter and continue to work full-time in public service jobs. According to studentaid.ed.gov, “under this program, you may qualify for forgiveness of the remaining balance due on your William D. Ford Federal Direct Loan Program (Direct Loan Program) loans after you have made 120 qualifying payments on those loans while employed full-time by certain public service employers.”
Since you are required to make 120 payments on your eligible federal student loans after October 1, 2007 before you can qualify for the loan forgiveness, the first loan balances will not be granted until October 2017.
Also, Parents who received a Direct PLUS Loan may qualify for forgiveness of the PLUS loan, if the parent borrower — not the student on whose behalf the loan was obtained — is employed by a public service organization.
Although loan forgiveness under this program is available only for loans made and repaid under the Direct Loan Program, loans made under other federal student loan programs may become eligible for forgiveness if they are consolidated into a Direct Consolidation Loan. However, only payments made on the Direct Consolidation Loan will count toward the required 120 qualifying payments. The following loans may be consolidated into the Direct Loan Program:
- Federal Family Education Loan (FFEL) Program loans, which include
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- Federal PLUS Loans — for parents and graduate or professional students
- FFEL Consolidation Loans (excluding joint spousal consolidation loans)
- Federal Perkins Loans
- Certain Health Professions and Nursing Loans
So what are the borrower eligibility requirements for loan forgiveness under the PSLF Program?
- You must not be in default on the loans for which forgiveness is requested.
- You must be employed full time by a public service organization when making each of the required 120 qualifying loan payments
- at the time you apply for loan forgiveness; and
- at the time the remaining balance on your eligible loans is forgiven.
Are you one of the many public service workers who are eligible? Let’s take a look at the types of public service jobs that will qualify for forgiveness:
…First, you must be employed full time (in any position) by a public service organization, or must be serving in a full-time AmeriCorps or Peace Corps position. When it comes to organizations that meet the definition of “public service organization”, where the PSLF program is concerned, the following positions will qualify:
— A government organization (including a federal, state, local, or tribal organization, agency, or entity; a public child or family service agency; or a tribal college or university); a non-profit, tax-exempt organization under section 501(c)(3) of the Internal Revenue Code (includes most not-for-profit private schools, colleges, and universities);
—A private, non-profit organization (that is not a labor union or a partisan political organization) that provides one or more of the following public services:
Public interest law services
— Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten)
Public service for individuals with disabilities and the elderly
— Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
Public library services
School library or other school-based service
If you happen to qualify for this program, your next question is likely going to be… “So, how do I apply for this program?”
Well, let me tell you…To apply for Public Service Loan Forgiveness, you must print and complete the borrower section of an application, have your employer’s Human Resources Office complete the Employer Certification Form, and submit it to FedLoan Servicing.
If you are eligible for the PSLF program, your loan will be transferred from your current loan servicer to FedLoan Servicing. FedLoan Servicing will then track any eligible payments you have made to date as well as future payments.
You can visit the FedLoan Servicing website for complete details and to print an application: https://www.myfedloan.org/manage-account/loan-forgiveness-discharge-programs/loan-forgiveness.shtml