The Public Service Loan Forgiveness (PSLF) Program enables qualified applicants to obtain forgiveness on student loans by working full-time for a qualifying employer and meeting other program-specific conditions.
Established in 2007 as part of the College Cost Reduction and Access Act (CCRAA), the Public Service Loan Forgiveness (PSLF) Program encourages professionals with student loan debt to choose full-time jobs in public service in order to have their student debt forgiven completely.
How to Qualify for the Public Service Loan Forgiveness (PSLF) Program
Getting approved for the PSLF Program requires you to complete a few important steps to determine your eligibility for student loan forgiveness. Under this program, one of your first requirements is having full-time employment at a public service organization, which includes positions at federal, state, local or tribal government organizations, or at a 501(c)(3) non-profit organization as designated by the IRS.
While full-time AmeriCorps and Peace Corps volunteers are considered eligible for the PSLF Program, employers such as labor unions, partisan political organizations, for-profit organizations, and non-profits not recognized under Section 501(c)(3) of the Internal Revenue Code do not currently qualify.
Next, you will need to have federal student loans covered by the PSLF Program, and not be in default on any of these loans. These include:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans (for qualified parents)
- Direct Consolidation Loans
Borrowers of other federal student loan programs, which include Federal Family Education Loans (FFEL) and Federal Perkins Loans, are not eligible for the PSLF Program. However, if these loans are consolidated into a Direct Consolidation Loan, they may be eligible for the PSLF Program.
The final requirement for the PSLF Program is making 120 qualified payments on eligible student loans after October 1, 2007. This means that even if you’re working for a qualified employer, forgiveness of your student loans can only be granted as early as October 2017. Additionally, if you consolidate loans to become eligible, only 120 payments made on the new qualifying loan will considered part of the program’s repayment period.
Find out if you can take advantage of the Public Service Loan Forgiveness (PSLF) Program for free.
How the Public Service Loan Forgiveness (PSLF) Program Works
The Public Service Loan Forgiveness (PSLF) Program is designed to eliminate the remainder of your qualifying student debt, up to any amount, once you meet the conditions of the program. However, even if you meet all the requirements for the PSLF Program, the earliest you could have your student loans forgiven is October 2017, due to the mandatory 10-year repayment period on qualifying student loans that begins any time after October 1, 2007.
An additional benefit of getting approved for the PSLF Program, beyond having your student loan debt forgiven, is that the amount forgiven will not be considered taxable income by the IRS. This means that even if your student loans are forgiven, you won’t have to file the forgiven amount on the following year’s taxes.
The PSLF Program Under President Trump
Since President Trump took office, the Public Service Loan Forgiveness program has become a controversial topic. One of the main reasons for the controversy is the President’s opinion that eliminating the PSLF program could save taxpayers up to $100 to $200 billion annually.
However, the White House made a surprising move in March 2018 when President Trump signed the $1.3 trillion omnibus spending bill – a bill that gives $350 million in funding to the PSLF program over the next several years.
With the program now funded for the foreseeable future, eligible applicants can begin submitting paperwork for Public Service Loan Forgiveness. This includes borrowers who work for qualifying agencies and have extended or graduated repayment plans. Prior to the bill being signed, only applicants with income-driven repayment plans qualified for the program.
PSLF Program Update: In May 2018, the Department of Education launched a new program called Temporary Expanded Public Service Loan Forgiveness (TEPSLF). Using a portion of the $350 million in funding for PSLF, this program helps borrowers whose applications were denied for PSLF due to ineligible loan types.
If you applied to the PSLF program and had your application denied because your loans didn’t qualify, you could be eligible for TEPSLF. However, this funding won’t last for long, so it’s important to submit your new application as soon as possible to be reconsidered.
Find out if you qualify by reading our latest article on TEPSLF. You can also start the process now by filling out our free online assessment or by calling (800) 771-6358 to speak with a student loan expert.
Because each of these programs are on a “first-come, first-served” basis, it’s important to submit your application as soon as possible to find out if you’re eligible. For more details on having your debt eliminated through the Public Service Loan Forgiveness (PSLF) program or TEPSLF, fill out our free online form or speak with a student loan specialist by phone at (800) 771-6358.
STUDENT LOAN FORGIVENESS Student loan repayment has undergone tremendous reform over the past few decades. As part of these federal student debt relief initiatives, new options have become available to…
STUDENT LOAN FORGIVENESS Student loan repayment has undergone tremendous reform over the past few decades. As part of these federal student debt relief initiatives, new options have become available to those looking to benefit from today’s student loan forgiveness programs.Learn More