Learning how to forgive your student loan debt is simple and easy with Public Service Loan Forgiveness.
Profiting from loan relief is easy with Public Service Loan Forgiveness leading the way.
Public Service Student Loan Forgiveness Program
The Public Service Student Loan Forgiveness Program (PSLF) is a plan to get you, and others like you working in the public sector, out from under your heavy student debt. It has been in the news a lot since May of 2017 as loans under the program are now ready for forgiveness. There is a lot of information to tackle, and unfortunately the Department of Education’s website can be quite confusing.
To help you determine if you are eligible for the public service student loan forgiveness program and get you started, we have broken down the material into bite-sized pieces. As always, if you have any questions whatsoever, do not hesitate to contact us — call us for a free assessment of your loan situation, our Experts are here to help!
The Public Service Student Loan Forgiveness Program is a federally backed government program which eliminates “any remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.” (Note: 120 consecutive monthly payments equals 10 years. However, because the payments do not need to be consecutive, it could take longer than 10 years to make 120 qualifying payments).
What Is A “Qualifying Monthly Payment?”
A qualifying payment is an on-time monthly payment made after Oct. 1, 2007 on a loan that is in one of the qualifying repayment plans. If you are not already enrolled in one of the four plans listed below, you need to do that right away as your first step in qualifying for the public service student loan forgiveness program. If you would like help getting into one of the plans, do not hesitate to call us at 987-654-3210.
- Income Based Repayment (IBR) – This payment plan is based strictly on your income and family size – the balance of the loan and the interest rate are not considered when the monthly payment is determined. Since the monthly payment under this plan is 15% of your discretionary income, your payments could be as low as $0.00/month.
- Income Contingent Repayment (ICR) – Similar to IBR, but in this case the determination for the monthly payment includes the loan balance and the interest rate. However, because it still takes into account your income and family size, your payments could be as low as $0.00/month.
- Pay As You Earn (PAYE) – This option has the lowest monthly payment as it is based on your income but the percent of your discretionary income used for the determination is only 10% as opposed to 15%. This is only for loans given after Oct. 1, 2011.
- Revised Pay As You Earn (REPAYE) – A revision of PAYE was necessary to take into account older loans not eligible under PAYE – also, REPAYE has interest forgiveness provisions.
What Type Of Work Qualifies For PSLF?
For the public service student loan forgiveness program, it does not matter what type of work you do, as long as your employer is a “qualifying employer.” Fortunately for you, the definition is expansive. It includes the government at any level (federal, state, local, or tribal), any Section 501(c)(3) tax-exempt non-profit, and any other type of non-profit, even if not tax-exempt, whose primary purpose is to provide certain types of “qualifying public service.”
So what is a “qualifying public service?” Services that relate to: emergency management, military, public safety, law enforcement, public interest law, assisting disabled individuals and the elderly, public health, public education, assisting public libraries, and other school-based services such as early childhood education which includes licensed or regulated child care, Head Start, and state-funded pre-kindergarten.
Also, the “full-time” requirement for the public service student loan forgiveness program does not necessarily mean 40 hours/week. Full time is defined as an annual average of at least 30 hours/week or, if the work contract is at least eight months/year (e.g., teachers), then an average of 30 hours/week during the contracted months. Two or more part-time jobs that average 30 hours/week combined also satisfy the full-time requirement. Finally, AmeriCorps and Peace Corps volunteers are considered full-time employees of a qualifying organization.
Will ALL My Loans Be Forgiven?
This is one of the more complicated aspect of the public service student loan forgiveness program. The short answer is yes, all your loans could be forgiven, as there is no cap on the amount which will be eliminated after you make 120 qualifying payments. However, ONLY Direct Loans are eligible for forgiveness under this program. If you have some private loans, there is no way to forgive them with this plan.
If you received some federal loans prior to July 1, 2010, they may be under one of the older federal student loan programs such as the Federal Family Education Loan Program or the Federal Perkins Loan Program and therefore are NOT Direct Loans. To check the types of federal loans you have, click here. If the loan name starts with “Direct,” then that loan should qualify for the public service student loan forgiveness program.
If you do have other federal loans, such as Subsidized Federal Stafford Loans, PLUS loans or Perkins loans, you CAN get most of them into the PSLF program by consolidating them all into a Direct Consolidation Loan.
How Do I Consolidate My Loans?
This is where you need to be careful, as things could get complicated if you currently have both Direct Loans and other federal loans, and you are thinking of consolidating all of them together. For example, if you have been making qualifying payments on the Direct Loan portion of your loans, and then you consolidate all your loans together into a new Direct Consolidation Loan, any payments made on your Direct Loans before consolidation would no longer count toward the 120 payments needed to satisfy the PSLF program.
In essence, the payment counter starts over for ALL the loans within the new Direct Consolidation Loan. Because of this, it might make sense to keep your current Direct Loans out of any consolidation you do. We can easily put you in touch with experts who can help you determine the best way to go about consolidation.
If you feel this program is the right one for you, then you should immediately fill out an Employment Certification form for every qualifying employer you have had. If you are just starting out in your public service career, be sure to complete one of these forms for every year of employment, or whenever you change employers. If you have already made 120 qualifying payments, congratulations! It’s now time to fill out the PSLF application.
Still Have Questions?
There is a lot of information to wade through on your own. We can help! Call today for a free assessment of your loan situation and together we can determine if the Public Service Student Loan Forgiveness Program is right for you. Call us now at 987-654-3210