HOW TO GET YOUR STUDENT LOANS FORGIVEN ( NO , REALLY )
Public Service Loan Forgiveness ( PSLF ) is a program that could eliminate some of your student loan debt — as long as you meet all the requirements , that is . Sound interesting ? Here ' s what you should know .
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WHAT IS PSLF , EXACTLY ?
IT ’ S A FEDERAL PROGRAM THAT FORGIVES THE REMAINING BALANCE ON YOUR DIRECT LOANS IF YOU MEET ALL OF THESE REQUIREMENTS :
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REQUIREMENT : WHO YOU WORK FOR
Make 120 qualifying payments under qualifying repayment plans
Work full-time for a qualifying employer
IT ’ S NOT ABOUT YOUR SPECIFIC JOB TITLE . IT ’ S ABOUT WHO YOUR EMPLOYER IS .
You could qualify for PSLF if you work for any of these types of not-for-profit organizations :
That ’ s the basic gist , but keep reading for details about each of these requirements .
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REQUIREMENT : FULL-TIME EMPLOYMENT
You must work full-time to be eligible for PSLF . But the definition of “ full-time ” is flexible :
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• Government organizations at any level ( federal , state , local , or tribal )
• 501 ( c )( 3 ) not-for-profit organizations that are tax exempt
• Other types of not-for-profit organizations if their primary purpose is to provide certain types of qualifying public services
• AmeriCorps or Peace Corps ( if you work as a volunteer )
IF YOU HAVE ONE JOB You have to meet your employer ’ s definition of “ full-time ” OR work at least 30 hours per week , whichever is greater .
IF YOU HAVE PART-TIME JOBS You have to work a combined average of 30 hours per week , and all your part-time jobs must meet the eligibility requirements .
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REQUIREMENT : FEDERAL DIRECT LOANS ONLY
A FEDERAL DIRECT LOAN IS THE ONLY TYPE OF LOAN THAT ’ S ELIGIBLE FOR PSLF .
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REQUIREMENT : QUALIFYING MONTHLY PAYMENTS
YOUR PAYMENT QUALIFIES IF YOU MAKE IT ...
after Oct . 1 , 2007 ;
under a qualifying repayment plan ;
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HOWEVER ... If you received a Federal Family Education Loan ( FFEL ) Program loan or Perkins Loan , it ’ s possible for that loan to become eligible too — if you consolidate it into a Direct Consolidation Loan . If you received parent PLUS loans , you will need to consolidate them , even if you have Direct Loans , in order to be considered for Income Contingent Repayment plans .
THE FINE PRINT Only qualifying payments you make on the new Direct Consolidation Loan get counted toward your 120 required payments . for the full amount due as shown on your bill ;
no later than 15 days after your due date ;
and while you ' re employed full-time by a qualifying employer .
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ARE YOUR LOANS FEDERAL DIRECT LOANS ? If you borrowed before 2011 , there ’ s a good chance that some or all of your federal student loans are not Direct Loans and would need to be consolidated to qualify . To check , log in to the StudentAid . gov site and look for the word “ Direct ” in the name of your loan .
If any payment doesn ’ t check all these boxes , it won ’ t count toward your 120 qualifying payments needed . So stay on top of it .
SIDE NOTES : You can ’ t make a qualifying payment while your loans are in any of these statuses :
• in-school status
• the grace period
• deferment
• forbearance
Also , your 120 qualifying payments don ’ t have to be consecutive .
Example : If there ’ s a period when you ’ re working for a nonqualifying employer , you won ’ t lose credit for the qualifying payments you made before that period .
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REQUIREMENT : YOUR REPAYMENT PLAN
ALL OF THE INCOME-DRIVEN REPAYMENT PLANS ARE ELIGIBLE :
REPAYE Plan , PAYE Plan , IBR Plan , ICR Plan
What about the Standard Repayment Plan ? This plan qualifies for PSLF too , but if you ’ re on the 10-year Standard Repayment Plan the entire time you ’ re working toward PSLF , you ’ ll have no balance left to forgive after you ’ ve made 120 qualifying PSLF payments . So we recommend entering one of the income-driven repayment plans above .
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HERE ARE YOUR NEXT STEPS
WHAT YOU SHOULD DO NOW If you ’ re working toward PSLF , complete and submit the Employment Certification Form annually or when you change employers . We use the information you provide to let you know if you ’ re on the right track . You can download the form and get more info on the PSLF program at StudentAid . gov / publicservice .
WHAT YOU SHOULD DO LATER Once you ’ ve made 120 qualifying payments — it ’ ll take a few years , obviously — only then should you apply for Public Service Loan Forgiveness .