Which Jobs Qualify for Public Service Loan Forgiveness? -PSLF

Students who work for the government or non-profit sector are eligible for public service loan forgiveness (PSLF). All public service workers are included, including teachers, firefighters, nurses, and military personnel. However, because of the program’s stringent guidelines, many would-be borrowers are turned down.

Before submitting an application to PSLF, make sure you know all of the requirements.

Loan Forgiveness in the Public Service

After a borrower has made 120 qualifying monthly payments on a Direct Federal Loan while employed by a qualifying employer, PSLF will forgive the remaining balance.

Limitations on who can apply

To be eligible for the PSLF, you must be working at least 30 hours per week for a qualified employer. Federal Direct Loans and federal loans that have been consolidated into a federal consolidation loan are both eligible loans for this program. There are no public service loan forgiveness options for private student loans, Federal Family Education Loans (FFEL), or Federal Perkins Loans.

Change to an income-driven repayment plan in order to take advantage of the Public Service Loan Forgiveness (PSLF). New monthly payments are calculated based on your income, and repayment terms are extended to 20 or 25 years under these plans. You will have paid off your loan in 10 years if you stick to the standard repayment plan. All repayment plans based on a borrower’s ability to pay are considered qualifying repayment plans.

• Revised Pay As You Earn Repayment Plan (REPAYE)
• Pay As You Earn Repayment Plan (PAYE)
• An Income-Based Repayment Plan (IBR)
• Income-Contingent Repayment Plan (ICR Plan)

After you’ve made 120 qualifying payments under an income-driven repayment plan, PSLF will forgive the remaining balance of your loan.

Qualified payments are those made while you’re working in an eligible position. The program will still consider your previous qualifying payments even if you end up working for a non-qualifying company. So, if you ever find another job that qualifies, you might be able to get your student loans forgiven.

Your eligibility for loan forgiveness can be maintained by completing the Employment Certification for Public Service Loan Forgiveness form annually.

Which Public Service Loan Forgiveness Positions Qualify?

Public Service Loan Forgiveness-eligible positions include:

• Management of Emergencies
• The state (excluding time served as a member of Congress)
• A career in the armed forces
• Public Security
• Protecting the Public
• The health of the general public (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations, as such terms are defined by the Bureau of Labor Statistics)
• Social work in a public children’s or family services agency that focuses on public education
• Services for the defense of the public interest (including prosecution or public defense or legal advocacy on behalf of low-income communities at a nonprofit organization)
• Education of Children from an Early Age (including licensed or regulated childcare, Head Start, and State funded prekindergarten)
• Individuals with disabilities are given access to public services.
• Elderly care is provided by the state.
• Science and technology in the public library
• Other school-based services such as library science
• non-profit organizations that are exempt from paying federal income tax
• Working as a professor at a Native American university or college
• Working as a professor in a field where there is a critical shortage of qualified individuals (including nurse faculty and foreign language faculty)

The Peace Corps and AmeriCorps both count as full-time employment for the purposes of PSLF.

Public Service Loan Forgiveness does not apply to the following companies:

• Government contractors who are paid for their services by private companies (as opposed to directly working for a government agency)
• Unions for profit-making businesses
• Political Parties and Parties of Interest
• a congregation of a particular faith (unless the job is unrelated to religious instruction, worship services, or proselytizing).

How to Apply for Loan Forgiveness for Public Sector Employees

Complete and submit the Public Service Loan Forgiveness Certification and Application form once you’re ready to apply for PSLF. For employer certification, this is the same form you would have used. During the time period in which you made qualifying payments, you will need to include your entire employment history.

The Department of Education provides a public service loan forgiveness help tool to assist borrowers in completing their applications for loan forgiveness. ‘ Use the tool to find out if your employer is one that qualifies.

PSLF has only had a small number of qualified borrowers.

There have been only a handful of borrowers who have actually received debt forgiveness under the Public Service Loan Forgiveness program since it was launched in 2007. PSLF applications were rejected by 98% in April 2021, according to Department of Education data. Borrowers’ “extraordinary confusion” about the procedure, says Education Secretary Miguel Cardona, is to blame, he says, for the high denial rate.

Education Secretary Arne Duncan plans to rewrite PSLF regulations so that borrowers can understand them better. After five years of qualifying payments, a borrower who meets certain criteria could have half of their debt forgiven.

As a result of COVID Forbearance, Until May 1, 2022, PSLF Federal student loans are eligible for a payment suspension and a 0% interest rate. Eligible borrowers may receive credit for qualifying payments toward PSLF during this COVID relief period. To be eligible for the loan payment credit, you must submit a PSLF employer certification form during the forbearance period.

PSLF can be applied for during the forbearance period, as long as the borrower has made 120 payments.

Alternatives to PSLF

Some people won’t be eligible for Public Service Loan Forgiveness. Fortunately, there are other options for lowering or eliminating your student loan repayments completely…..

If you work for the federal government or are a healthcare professional, you may be eligible for a different student loan forgiveness program. Borrowers who are unable to make payments on their student loans may be eligible for loan discharge programs offered by the Department of Education.

If a loan forgiveness program is not an option for you, you can choose to remain on an income-driven repayment schedule. After 20 or 25 years, depending on the plan you choose, any remaining debt will be completely eliminated. You can evaluate your repayment options with the help of a calculator like the Income-Based Repayment Calculator.

It is also possible to lower your interest rate by refinancing your student loans. Depending on your current interest rate, a refinance could save you a lot of money.

Federal benefits like forgiveness and discharge are lost when you refinance a government-backed student loan. Refinancing is only available from private lenders, so good credit and steady income are required to get approved. Compare features and interest rates from top student loan refinance companies before making a decision to refinance.

FAQ PSLF

How much can be forgiven with public service loan forgiveness?

Your forgiveness with PSLF could be worth up to $24,150, depending on the payment plan you choose to follow.

How do you qualify for PSLF?

To qualify for PSLF, you must

• Work full-time for a government agency or certain types of nonprofit organizations;
• have Direct Loans (or have consolidated other federal student loans to qualify);
• repay your student loans on an income-driven repayment plan;
• and make 120 qualifying payments over the course of a year to be eligible.

Does PSLF forgive all loans?

After you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer, the PSLF Program will forgive the remaining balance on your Direct Loans.

How do I know if my loans qualify for PSLF?

To be eligible for PSLF, you must be employed full-time by a qualified employer, or at least 30 hours per week, in order to qualify. In addition to federal Direct Loans, eligible loans include federal loans that have been consolidated into one single federal consolidation loan.

Do $0 payments count for PSLF?

Yes. If you are employed full-time by a qualifying employer during a month in which your scheduled payment under an income-driven repayment plan is zero, that month will count toward your PSLF.

Is it worth it to do PSLF?

If you owe a significant amount in student loan debt, the Public Service Loan Forgiveness (PSLF) program may be able to save you thousands of dollars in interest payments. It could also add years to the length of time you have to pay back your student loans. College loan forgiveness is not automatic; you must meet all of the requirements to be eligible. However, the payoff may be well worth the effort.

Are student loans forgiven after 20 years?

In exchange for making 20 years of on-time, in-full student loan payments, you may be eligible for federal student loan forgiveness on the remaining balance of your undergraduate student loans. You may be eligible for federal student loan forgiveness for your graduate student loans after 25 years of repayment.

Public Service Loan Forgiveness Requirements

You must make 10 years’ worth of payments, for a total of 120 payments (although you may still be eligible if you are required to pause payments through forbearance), for the full amount within 15 days of your monthly payment due date to be considered eligible.

How can I get rid of student loans without paying?

• There is no easy way to get rid of student loans without having to pay them back.
• It is best to contact your private loan provider to discuss renegotiating your payment or taking a short-term payment break if you are experiencing financial difficulties making payments.

Does USPS qualify for PSLF?

It makes no difference what your job title is. Applicants can be teachers, military personnel, police officers, postal workers, accountants, planners, recreation workers, emergency responders, office staff, and anyone else working for the government at any level!

Will PSLF go away?

However, the modifications to the PSLF are only temporary, and they are set to expire on October 31, 2022. A large number of borrowers will need to take action before that deadline, such as certifying previous and current employment or consolidating non-Direct federal student loans through the federal Direct consolidation program, in order to be considered eligible.

Do nurses qualify for student loan forgiveness?

Candidates for student loan forgiveness for nurses must be residents of the state of California, hold a valid nursing license, and be enrolled in an accredited nursing program at a higher education institution. Candidates who wish to have their student loans forgiven must work full-time for four years.

Do PSLF payments have to be consecutive?

Is it necessary for me to make consecutive payments in order to be eligible for Public Service Loan Forgiveness (PSLF)? No. No more than 120 payments must be made in a row to count as a single payment. For example, if you work for a period of time for a nonqualifying employer, you will not lose credit for any qualifying payments you made in the previous year.

How do you pay off student loans?

Here are seven strategies to assist you in paying off your student loans even more quickly.

• Make extra payments in the proper manner.
• If you have good credit and a stable job, you should consider refinancing.
• Enroll in automatic payments.
• Make payments on a biweekly basis.
• Pay off the interest that has been accrued.
• Keep to the established repayment schedule.
• Make use of ‘found’ money.

Is PSLF forgiveness taxable?

It is possible to experience a “student loan forgiveness tax bomb,” which occurs when your loan balance is forgiven but you are required to pay taxes on the amount forgiven. This has the greatest impact on borrowers who are on income-driven repayment plans. Through the end of 2025, any amount forgiven through income-driven repayment, or through other means, is not considered taxable income.

How long does public service loan forgiveness?

Approximately 60 days
The application process for the PSLF can take up to 60 days. It may take longer if you have not been submitting regular PSLF Forms, or it may take less time if you have. During this time, you have the option of continuing to make payments on your loans or putting your loans into forbearance, which means you will not be required to make payments.