Through the Public Service Loan Forgiveness (PSLF) Program and Federal Perkins Loan Cancellation, first responders can have their loans forgiven by working for an eligible employer and making qualifying payments.
As public servants, full-time police officers and firefighters who work for qualifying agencies may be eligible for student loan forgiveness by meeting certain conditions. Through this form of debt forgiveness, the amount you owe on your student loans could be wiped out completely.
How to Qualify for the PSLF Program
In order to take advantage of the PSLF Program, you will need to have federal student loans currently covered by the loan forgiveness program. These loans include:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans (for qualified parents)
- Direct Consolidation Loans
If you have a Federal Family Education Loan (FFEL), you could also become eligible for the PSLF Program by consolidating your loans into a Direct Consolidation Loan. However, any student loans in default won’t qualify for this program, so it’s important to get your loans out of default before applying.
Next, whether you’re a police officer or a firefighter, you will need to work full-time for a qualifying federal, state, local or tribal government agency or organization as part of the pre-approval process. If you’re unsure if the agency or organization you work for qualifies you for the PSLF program, our loan forgiveness experts can help.
Finally, as part of your loan forgiveness eligibility, you will need to make 120 qualified payments on eligible student loans. All of these payments must have been made after October 1, 2007, meaning the earliest you can obtain loan forgiveness through the PSLF program is October 2017.
Consecutive qualifying monthly payments are not required under the PSLF Program. Even if you work for a nonqualifying employer for a period of time, any credit towards your 120 payments will be counted towards your eligibility. However, none of your monthly payments can be more than 15 days late, and must be for the full amount due each month.
Also, any payments made on loans that have been converted into Direct Consolidation Loans will begin their 120-month repayment period once the consolidation has been approved.
How to Qualify for a Perkins Loan Cancellation
If you have a Federal Perkins Loan, you may be eligible for the Federal Perkins Loan Cancellation Program as a full-time police officer or firefighter who works for a qualifying organization. This can help you earn the following cancellation benefits for each year of public service after an initial five-year eligibility window:
- Year one: 15% cancellation
- Year two: 15% cancellation
- Year three: 20% cancellation
- Year four: 20% cancellation
- Year five: 30% cancellation
Find out if you qualify for a loan forgiveness program for police officers and firefighters for free.
How the PSLF Program Works for Police Officers and Firefighters
While the Public Service Loan Forgiveness (PSLF) Program has experienced changes since its inception, it is still designed to eliminate the full amount of your remaining and qualifying student debt once you meet the program’s conditions.
However, it should be noted that even after you have made 120 qualifying monthly payments, you will still need to get approved for loan forgiveness, meaning you won’t have your debt forgiven automatically. You will also need to be working full-time for a qualifying employer when you apply for forgiveness and when your remaining balance is forgiven.
Another benefit of loan forgiveness in the PSLF Program is that the amount being forgiven won’t be considered taxable income by the IRS. This means that unlike other forgiveness programs, you won’t be required to pay taxes on the amount being forgiven.
For more details on loan forgiveness for police officers and firefighters, speak with an expert by phone at 800-771-6358.