Public Student Loan Forgiveness Qualifications

At $1.3 trillion, student loan debt has become an enormous burden on tens of millions of Americans. Knowing what options are available to you is critical to developing an optimal repayment strategy. For borrowers with federal student loans, one option might be the Public Service Loan Forgiveness program. This program forgives the 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. Maybe you’ve heard of the program, but you were unsure of whether or not your loans qualify. Here, we’ve summarized all the qualifications for the Public Service Loan Forgiveness program:

Qualifying Employment

This refers primarily to the employer and not the job you are employed to do. Examples of qualifying employment include:

  • Government organizations at any level (federal, state, local, or tribal)
  • Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
  • Other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services

The following are examples of non-qualifying employment:

  • Labor unions
  • Partisan political organizations
  • For-profit organizations (this includes for-profit government contractors)
  • Not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code and that do not provide a qualifying public service as their primary function

Determine if your employment qualifies today by filling out and submitting the Employment Certification form.

Full-time Employment

This refers to the organization’s definition of full-time employment or 30 hours per week, whichever is greater. If you are engaged in part-time employment with multiple qualifying employers and your employment averages to 30 hours or more per week, you may meet this requirement. Religious activities such as worship services, religious instruction, and proselytizing do not qualify.

Qualifying loans

Only non-default direct loans received under the William D. Ford Federal Direct Loan (the Direct Loan) Program qualify for PSLF. If you received loans under other federal student loan programs, they may become eligible if you consolidate the under the Direct Loan Consolidation program.

Qualifying monthly payments are those made:

  1. after Oct. 1, 2007;
  2. under a qualifying repayment plan. Only income-based repayment plans qualify. These are:
    • Revised Pay As You Earn Repayment Plan (REPAYE Plan)
    • Pay As You Earn Repayment Plan (PAYE Plan)
    • Income-Based Repayment Plan (IBR Plan)
    • Income-Contingent Repayment Plan (ICR Plan)
  3. for the full amount due as shown on your bill;
  4. no later than 15 days after your due date; and
  5. while you are employed full-time by a qualifying employer.

Payments made under a standard repayment plan do not qualify, but you can apply for conversion to an income-based repayment plan.

Let this be the year you get your debt repayment under control. Find out today if you meet the qualifications for the Public Service Loan Forgiveness program. And if you have any questions, contact us – we will put you in contact with experts who can help.