Public Service Loan Forgiveness

What are they? Do I qualify for PSLF waivers?  

The Public Service Loan Forgiveness program, or PSLF, rewards individuals who go into public service jobs. If those individuals make 120 monthly loan payments towards their student loan debt, the remaining balance is forgiven.

This plan was created in 2007 under the College Cost Reduction and Access Act. The Consumer Financial Protection Bureau has said that the program was being under-utilized. That means there are people working in public service who qualify for this student debt relief but aren’t taking advantage of it.

Currently, there is a temporary PSLF waiver of some of the rules for the PSLF program. This expands access to allow many more borrowers to qualify for loan relief. But these waivers expire as of October 31, 2022, so anyone wanting to qualify for the extra waivers should act quickly.

After October 2022, the program will still be in effect and will still be highly recommended, but it will be harder to qualify for. We’ll discuss the effects of the waiver program below.

Loans that qualify for PSLF  

Federal Direct Loans qualify for the Public Service Loan Forgiveness Program. Perkins loans, FFEL (Federal Family Education Loans), or private loans do not qualify. However, if those other kinds of loans are consolidated into a Direct Consolidation Loan, the new consolidated loan does qualify for PSLF.

Are parent loans eligible for PSLF? No, Parent PLUS loans will not qualify unless they are consolidated with non-Parent loans.

Qualifying Repayment Plans  

To be eligible for PSLF, payments must be made under a qualifying repayment plan. These include the Income-Base Repayment (IBR) and Income-Contingent Repayment (ICR) plans and the Pay as You Earn Repayment Plan. Payments must be on time and in full each month for 120 months (10 years).

Those 120 monthly payments needn’t be consecutive; you can leave the employ of a PSLF eligible employer, and whether you are unemployed or in an ineligible job, you can return to a PSLF-eligible job later and those qualifying payments will count along with your earlier payments.

The current limited waiver program (in effect until Oct. 31, 2022) allows for certain periods of repayment to count that wouldn’t normally qualify. These include forbearance periods and months spent in deferment before 2013, and economic hardship deferments after 2013. Past payments on a qualifying plan that were not on time or in full will qualify under the limited waiver.

Jobs that qualify for PSLF  

Any job with a government agency, any job with a 501(c)(3) nonprofit organization, and certain other jobs qualify as “public service” and would make the borrower eligible for PSLF. These jobs involve nonprofits that aren’t designated 501(c)(3) by the IRS, but provide public benefits like education, library, law enforcement, military, or emergency services. For-profit employers, political organizations, and labor unions do not qualify.  

This work must be full-time  

Qualifying borrowers must work at least 30 hours per week for a nonprofit organization during the entire 120-month repayment period. (Schoolteachers who don’t work during the summer months must average 30 hours per week during their contracted teaching period.) Anyone who works for a religious organization must spend time performing public service work; time spent providing religious instruction or conducting worship services doesn’t qualify for PSLF. One can work multiple nonprofit jobs that qualify and add the hours together to get to the 30-hour requirement.

During the limited waiver period, it’s possible to get forgiveness even if you’re not currently employed, or not employed by a qualifying employer at the time of application.

Student debt help from credit.org  

There are many student loan relief programs in addition to the Public Service Loan Forgiveness program. The current PSLF waiver is not the same as the 10 or $20,000 federal student loan relief announced in August.

Credit.org offers free, personal assistance to student loan borrowers; we can help you understand the options available and what programs you qualify for. You can request help at studentdebt.org or our Student Loan Coaching page.

For much more information about the PSLF limited waiver, visit Studentaid.gov’s page about this temporary program (also called TEPSLF, or Temporary Expanded PSLF). You’ll need your W-2 form and your employer’s Federal Employer Identification Number. There is also an informative video from the Consumer Financial Protection Bureau: https://youtu.be/HZQ0RtKKPh0

For more information about the Public Service Loan Forgiveness Program, start with the PSLF Help Tool. If you complete the form before Oct. 31st, 2022, you still can qualify for the waiver, even if the waiver isn’t approved until after October. As long as you apply before the deadline, you will be considered for relief.

If you’re seeing this after Oct 31, 2022, you can still use the help tool or talk to your federal loan servicer to get more information and find out if you qualify for Public Service Loan Forgiveness.

Should you need further assistance with the limited PSLF waiver or would like to speak with one of our financial counselors about your student loan, please contact us at (800) 431-8157.

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