Public Service Loan Forgiveness

Presently 33 million Americans qualify for the Public Service Loan Forgiveness program, but less than 1% of them will get any of its advantages? Don’t follow the 99% of people who are suitable for PSLF yet unable to take benefit of this program.

Who Qualifies for Public Service Loan Forgiveness?

You have to be employed full-time with an organization to qualify for PSLF which is viewed as “qualifying employment”.  Note that also, the kind or nature of your employment with the organization does not matter.

A private non-profit employer which isn’t a tax-exempt organization under Section 501(c)(3) of the IRC can be a qualifying public service organization if it gives particular specified public services. These services involve:

  • Military service
  • Emergency management
  • Public service concerning individuals with disabilities and the elderly.
  • Public health services, public library services or public education
  • Public safety, or law enforcement services
  • School library and other school-based services
  • Early childhood education
  • Public interest law services

Private Student Loan Consolidation

Private student loan consolidation is available through various banks we work with to combine all your student loans into one new loan. Private student loan consolidation requires a good credit score and will often have better rates than the federal student loan.

The following organizations are not counted qualifying employment by PSLF:

  • For-profit organizations, including for-profit government contractors
  • Non-profit organizations which are not exempt under Section 501(c)(3) and don’t provide a public service.
  • Labor unions
  • Partisan political organizations

Full-Time Employment

You have to be employed full-time with that organization and making payments on your student loans at the same time to be eligible for PSLF. Full-time job for PSLF is defined as using your employer’s definition of full-time employment or at least 30 hours per week—whichever is greater.

  • The kind of work you do for your employer does not usually matter for PSLF ideas.

But, you may not include time given participating in religious instruction, worship services, or any form of proselytizing while determining full-time public service employment at a not-for-profit organization.

You meet the full-time standard if you work at least 30 hours per week throughout your contractual period for teachers of different employees of a public service organization which is under contract for at least 8 months.

What Types of Loans Qualify?

Only these kinds of loan qualify for PSLF:

  • Direct Consolidated Loans
  • Direct Subsidized / Unsubsidized
  • Direct Stafford Subsidized / Unsubsidized
  • Direct PLUS

Private loans,  federal loans, and loans in default not listed above do not qualify for Public Service Loan Forgiveness.

What if My Federal Loans Don’t Qualify?

Luckily, there is a method to turn your federal loans in Direct Loans so that they can qualify under PSLF. The Direct Loan Consolidation program operates by taking every of your federal student loans and combining them in one new Direct Loan.

If you do not have Direct Loans still need to apply for Public Service Loan Forgiveness, you must consolidate your loans in this form.

If you apply on your own at StudentLoans.gov or by paper application, or you can hire a private company to assist you during the process consolidating your federal student loans will be free.

Making 120 Qualifying Payments

One of the main reasons PSLF forgiveness is left unutilized all year is due to qualified applicants unable to make qualified payments. Make certain you check in every year to be certain the payments you’re making on your student loans are qualified.

You have to make 120 qualified payments which meet these payment specifications to qualify for loan forgiveness under PSLF:

  • Payment was made on time (not more than 15 days after the due date);
  • Payment was made after October 1, 2007;
  • Payments made in advance or in a lump sum are not calculated as qualifying payments;
  • Payment was made under a qualifying repayment plan (look below).
  • Payment was made in full (for the whole amount shown on your bill, and
  • Payment was made at the time you were employed full-time with a qualified employer

PSLF And Qualified Repayment Plans

They have to be made under a qualified income-driven repayment program provided by the federal government for your monthly student loan payments to consider towards PSLF. This is another method in which a lot of people miss out on their chance to get loan forgiveness by PSLF.

The loan repayment programs which qualify you for PSLF are these:

Any payment made under a Graduated Plan or Standard Repayment Plan will not result toward the 120 monthly payments required to qualify for PSLF.

Temporary Expanded Public Service Loan Forgiveness

If some(all) of your payments disqualify you under the regular specifications for a limited time, you could still be eligible for PSLF.

The Temporary Expanded Public Service Loan Forgiveness chance offered by the U.S. Department of Education temporarily amends the current program to add more borrowers.

The TEPSLF opportunity prolongs the list of repayment programs under which you can make your 120 needed payments. TEPSLF allows these types of repayment plan while PSLF only accepts payments made under an IDR plan:

  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Consolidation Standard Repayment Plan
  • Consolidation Graduated Repayment Plan

If you’ve been rejected PSLF because of nonqualifying payments or if you’ve made payments that don’t qualify for PSLF it’s necessary to learn more on the Temporary Expanded Public Service Loan Forgiveness chance and check out can you qualify.

Temporary Expanded PSLF is a limited opportunity and will be given to applicants on a first served basis, first come, so it’s necessary to apply as soon as possible if you’re eligible.

Other Advantages of Enrolling in the Income-Based Programs

Under the income-based programs, your payments are determined based on your income, not on how much you owe. This can usually give borrowers with relief from high amounts they are oppositely unable to make. In some examples, the monthly payment could be as low as $0.00 per month for those with the little income, depending on the income and family size of the candidate. Despite how little it is (even $0.00), the amount would count towards your forgiveness.

How Public Service Loan Forgiveness Can Work?

A borrower is making $40,000 per year with a family size of 4. The loan balance is $48,000, with an interest rate of 6.875%. The borrower could qualify for an income-based payment of $52 per month. After making 120 qualifying payments, this borrower would have paid $6,240 in student loan payments, and the balance of $48,000 – $6,240 = $41,760 would be forgiven.

This does not involve interest that would also be forgiven and thinks that the personal income and family size did not change for the next ten years.

Public Service Loan Forgiveness Quick Checklist:

  • Government or Non-profit employment 501(c)(3)
  • Forgiveness is non-taxable
  • Full forgiveness of Federal Student Loans after ten years (120 qualified payments)
  • Has to be in the Direct Loan Program making income-based payments

Think to build up consolidating your loans to secure you are getting qualified payments

Want to learn more about Public Service Loan Forgiveness?

Just fill the form or click “Call Now” button.

Public Service Loan Forgiveness FAQ

  • How Much Can Be Forgiven?

    For now, there is no maximum number that can be forgiven under PSLF.

  • Is Public Service Loan Forgiveness Taxable?

    No. Any number forgiven under PSLF is not considered taxable income, giving PSLF very separate from income-driven repayment plans without PSLF.

  • What Happens If I Have Two Jobs in Public Service?

    If you work in non-profit jobs or separate public sector, you are considered to match the necessity for full-time employment if the combined hours at both positions is 30 hours or more per week.

  • Do Payments Have to Be Made Consecutively?

    No. You have to make 120 qualified payments for PSLF to work, but they do not have to be made continuously. For that cause, it will take at least 10 years to qualify for PSLF, but it may take longer.

  • Is PSLF Being Cancelled? What Should I Do?

    PSLF has been the subject of some discussion recently. The current news may limit borrowers from trying to qualify or apply for PSLF. But, having the correct information can let you still benefit from this program.

  • Are the Qualifying Payments Retro-Active?

    Yes! You could qualify for loan forgiveness if you meet all the qualifying standards of PSLF and have been making qualifying payments for 10 years. There is no specification to access the PSLF program, only that you apply at the end of your ten years of qualifying payments, employment and having the correct loan standards.

PSLF In The News

Recently the Department of Education is doubting the validity of several earlier approvals for Public Service Loan Forgiveness submitted by FedLoan Servicing. Even stating that borrowers can view their approvals rescinded shortly. The current presidential administration could be doing some adjustments to the program.

Even after meeting all program specifications this could result in many borrowers currently working in the public sector having their forgiveness benefits rejected.

FedLoan PSLF Employer Certifications Wrongly Denied

With the filing of a lawsuit versus the U.S. Department of Education by the American Bar Association in 2016 and 2017, it was seen by many public service employees that they might not qualify for the PSLF program. The ABA attempted to hold the Dept. of Ed accountable for FedLoan employer certifications (which serve to notify federal employees if their employer is qualified for PSLF qualifying employment).

The Department of Education has simplified that these reports from FedLoan are not binding, and the single way to identify if you qualify PSLF is by submitting an official application. You can do it via studentaid.gov also.

How To Apply For Public Service Loan Forgiveness

  • Apply Online – If your student loans are with Fedloan Servicing, you can submit your application online within their portal
  • Apply On Paper – – You must mail this application to the U.S Department of Education, FedLoan Servicing, P.O. Box 69184, Harrisburg, PA 17106-9184. The simplest method to do the latter is to create an account on myfedloan.org and upload the information there.
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