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Public Service Loan Forgiveness: Do you qualify and is it right for you?


Since education plays an essential role in building a bright career, people take some financial risks to pursue their education in accredited universities. One of these risks is taking a loan. Before enrolling at a university, upcoming students hope for well-paid job opportunities which will let them pay their loans without experiencing any difficulties after completing their university education. However, federal fund statistics show that the reality does not match the dreams of students and thousands of them are struggling with the mountains of debt. As a remedy, the government offers various forgiveness programs to relieve the situation. Public Service Loan Forgiveness is one of these programs which people can apply for depending on their occupation, annual income and the loan type that they have taken. People who are working for the government or a non-profit organization can apply to the Public Service Loan Forgiveness program to get rid of the vast amounts of debt that they have gone under to get a university degree.

public-service-loan-forgivenessAbout the Program

People who are working for the government or a non-profit organization can apply to the program to get rid of the vast amounts of debt that they have gone under to get a university degree. The primary condition of the Public Service Loan Forgiveness program is that the loan taker must make 120 payments and work as a full-time employee to be able to apply for this program. In case you are not sure if you are eligible for this program or not, make sure you have the qualities listed below:


  •    You are a full-time employer
  •    You are working for a government organization.*

*Federal, state, local and tribal organizations. Nonprofit organizations exempted from taxation. Other NGOs which primarily gives qualifying public services

  •    You have a direct loan
  •    You are repaying your loan on an income-driven repayment plan
  •    You have already made 120 payments


You are recommended to send your Employment Certification Form every year and when you change your workplace.

There is also a tool to help you to get more information about Public Service Loan Forgiveness program and what you need to do to be qualified for this program. It also shows if your current employment qualifies you for this forgiveness program. You can get information on your loan payment and if they are counted for the mentioned program.




This program requires you to work full time. It means that you need to work at least 30 hours a week. There can be some people who are working for two employers on a part-time based schedule. In this case, if you are working for not less than 30 hours in total for both of these places, you are meeting this requirement. However, if you are an employee working for a nonprofit organization and you are involved in religious activities, the time spent on these activities are not considered.


Qualified student loans


Sadly, we cannot say that all types of student loans are eligible for the PSLF program. However, if your loan is one of them listed under the William D. Ford Federal Direct Loan Program, then it is eligible for this forgiveness. It means that only direct loan takers can apply for this program. If you have taken Federal Family Education Loan or Federal Perkins Loan, you are not qualified. Possibly, a student has taken both Perkins loans and a direct loan. In this case, if they are consolidated, they can be eligible. The payments you have made before consolidation are not counted. If you want to intend to merge a direct loan with the other type, again, you will lose the direct loan payments made before consolidation.




If you have made a payment after October 1, 2007, under a qualifying payment plant, your payment is considered a qualifying monthly payment. You must have paid the full amount required. You must not miss the due date more than 15 days, and you must make all these payments when you are working full-time. It is not an issue if your payments are not consecutive. If you work for an unqualified employer, your previous payments with a qualifying employer will not be lost.

Another thing is that paying more than the required amount of money will not give you an advantage. The forgiveness program will consider only one payment with at least the required amount per month. So there is no need to make more than one installment or paying more than you should in a month.


Repayment Plan


There are two repayment plans for the Public Service Loan Forgiveness program. One of them is a Standard repayment plan, and the other is the income-driven repayment plan. If you are utilizing Standard payment plan, you should change it for an income-based one because if you are paying under the first one after 120 payments, you will not have any loan left to be forgiven.

The Payments Made


If you want to get information about how many qualifying payments you have already made, first you need to send your employment certification form to FedLoan Servicing. Every time you update them about your employment, they will send you information on the number of your qualified payments.


Employment Certification

As mentioned above, you need to submit your employment certification every year or when there is a change in your employment. The person who is authorized to provide you with this kind of a document can be somebody in your Human Resources department, your supervisor, manager or someone else who has the right for issuing this type of records.


What happens after 120 payments?


Once you make the 120th payment, you can file the Public Service Loan Forgiveness application to get loan forgiveness. At this time make sure that the employer you are working with is a qualified one and you are fulfilling the full-time work requirement. If your application is successful, you will get forgiveness on the rest of your loan. The good news is that you will not pay tax for the forgiven amount of your loan.

How to apply

Since you need to make 120 payments before being qualified for the PSLF program, it will take you at least ten years. If you have already made 120 payments, file the forgiveness application. If you are preparing to apply for the program, submit your employment certificate to get information in turn on your progress. If you do not send the document annually, when you apply for the program they will ask you to provide them with Employment Certification form for each employer for whom you have worked. After getting the required documents, this will take the following steps:

  •    Review the employment certification;
  •    If there is something incomplete, they will ask you to provide;
  •    If your loan is not qualified, they will inform you;
  •    If your employment is qualified, but FedLoan Servicing is not serving your credit, then it will be passed to Fed Loan Servicing. You will get a notification;
  •    If there is no problem with your employment, they will scrutinize your payments. They will identify the number of payments you have made while working as a full-time employee. If there are not 120 qualifying payments, they will tell you to apply after completing the missing payments.


Denied Applications for Public Service Loan Forgiveness – If your application is rejected, there is no need to lose your hope. In most cases, they deny the claims because some of the 120 payments are not made either under a standard or Income-driven payment plan.