How to Get Public Service Loan Forgiveness
- Consolidate federal student loans into the Direct Loan program by visiting StudentLoans.gov or calling 1-800-557-7392 if the loans aren’t already in the Direct Loan program.
- Select Revised Pay-As-You-Earn Repayment (REPAYE) or Pay-As-You-Earn Repayment (PAYE) as the repayment plan, if eligible. Otherwise select Income-Based Repayment (IBR).
- Make 120 qualifying payments while working full-time in a public service job for 10 years.
- Once a year and after a change of employer, ask the employer to file the employment certification form.
- Apply for forgiveness after completing the 120 qualifying payments.
Public Service Loan Forgiveness forgives a borrower’s remaining student loan debt after the borrower makes ten years of qualifying payments (total 120 payments) on loans in the Direct Loan program while working full-time in a public service job.
The 120 qualifying payments do not need to be consecutive, but must be made in full and on-time (no later than 15 days after the due date). The payments must have been made on or after October 1, 2007. The forgiveness is not retroactive and does not consider payments made before this date.
Eligible loans include Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. The loans must be in the Direct Loan program to qualify. Borrowers may consolidate their Federal Family Education Loan Program (FFELP) loans and Perkins Loans into the Direct Loan program at StudentLoans.gov (or by calling the U.S. Department of Education at 1-800-557-7392) to qualify for public service loan forgiveness. (Perkins Loan borrowers, however, will lose several benefits of the Perkins Loan program, including the subsidized interest benefit and a variety of other loan forgiveness programs, if they consolidate the Perkins loans.) Payments made on FFELP loans prior to consolidation do not count toward the 120-payment requirement. Private student loans are not eligible for federal student loan consolidation.
Eligible Repayment Plans
The payments must be made in the income-contingent, income-based, pay-as-you-earn, revised pay-as-you-earn, or standard repayment plans while the loans are in the Direct Loan program to qualify. Payments made under the extended, graduated, and income-sensitive repayment plans do not count toward the 120-payment requirement unless the payments equal or exceed the monthly payment under the standard 10-year repayment plan. Payments made before the loans were in the Direct Loan program do not count toward the 120-payment requirement. Payments made while the loans were in a deferment or forbearance do not count. For example, payments made while the loan is in an in-school deferment or the grace period do not count toward the 120-payment requirement. Lump-sum payments, even if treated as a prepayment of future payments, do not count. Borrowers who are in default are not eligible, but may become eligible by rehabilitating the defaulted federal student loans. (A borrower may rehabilitate defaulted federal student loans by making 9 out of 10 consecutive, full, voluntary monthly payments or by consolidating the loans and agreeing to repay them in the income-based repayment plan.) If the calculated payment under ICR, IBR, REPAYE, or PAYE is zero (i.e., for a borrower with very low income), it counts toward the 120-payment requirement.
Borrowers may select a repayment plan using the self-service options on the StudentLoans.gov web site or by filing the Repayment Plan Selection form.
(Borrowers in the income-contingent, income-based, revised pay-as-you-earn, and pay-as-you-earn repayment plans may be required to obtain an IRS Tax Transcript or file IRS Form 4056-T or the Consent to Disclosure of Tax Information form. During the first year, borrowers may be required to file an Alternative Documentation of Income form.)
Note that since a loan would be paid off in full under the standard repayment plan in ten years, borrowers must make at least one payment under income-contingent repayment (ICR), income-based repayment (IBR), revised pay-as-you-earn repayment (REPAYE), or pay-as-you-earn repayment (PAYE) to “earn” some forgiveness. The standard repayment plan is an option for borrowers who no longer qualify for these income dependent repayment plans, allowing them to retain the forgiveness earned previously. Repayment plans with lower monthly payments yield the most forgiveness. Thus the revised pay-as-you-earn and pay-as-you-earn repayment plans yield the most forgiveness, followed by income-based repayment. Generally, borrowers whose debt at graduation exceeds their annual income will qualify for some forgiveness.
Parent PLUS Loan Loophole
While the Parent PLUS Loan is technically eligible for public service loan forgiveness, it is not eligible for the three income dependent repayment plans and, therefore, cannot earn any forgiveness. There is, however, a loophole for Parent PLUS Loan borrowers who entered repayment on or after July 1, 2006. If the Parent PLUS Loans are included in a Direct Consolidation Loan, the consolidation loan is eligible for income-contingent repayment but not income-based repayment, revised pay-as-you-earn repayment, or pay-as-you-earn repayment, per the regulations at 34 CFR 685.208(a)(1)(ii) and (2)(iii). Thus, a recent borrower of a Parent PLUS Loan may qualify for public service loan forgiveness by consolidating the loan into the Direct Loan program and by repaying the consolidation loan under income-contingent repayment.
There are a broad range of eligible public service occupations. Examples include, but are not limited to, the following.
- Military service
- Public safety and law enforcement (Police, Fire, EMT)
- Emergency management
- Public education
- Early childhood education (including licensed or regulated childcare, Head Start and state-funded prekindergarten)
- Social work in a public child or family service agency
- Public services for individuals with disabilities or the elderly
- Public librarians, school librarians and other school-based services
- City, state or federal government (excludes time served as a member of Congress)
- Public interest legal services (including prosecutors, public defenders and legal advocacy on behalf of low-income communities at a nonprofit organization)
- Public health (including nurses and health care practitioners working in an eligible occupation)
- Employees of tax-exempt 501(c)(3) organizations
Service in a full-time AmeriCorps or Peace Corps position also qualifies, if the borrower uses all or part of the Segal Education Award or Peace Corps transition payment to make up to 12 payments on his or her student loans at the end of the volunteer service period. (This is a limited exception to the exclusion of lump sum payments.)
Full-time employment means working an annual average of at least 30 hours a week. Teachers who are under contract for at least eight months of the year are considered as working full-time if they satisfy the 30-hour requirement during the contract period and are treated by their employer as working for the full year. Borrowers who work several qualifying part-time jobs, each for less than 30 hours a week, may be considered as working full-time if the total work hours across all the qualifying jobs is at least 30 hours a week.
There is no definition of how to count hours for adjunct faculty with regard to the Public Service Loan Forgiveness program. However, the Affordable Care Act (ACA) uses the same 30-hours-per-week standard and provides a methodology for counting hours for adjunct faculty. This methodology counts 1-1/4 hours of preparation time for each hour of classroom/teaching time, as well as actual hours for office hours. Without any alternative methodology, it would seem reasonable to use the ACA methodology for public service loan forgiveness.
The latest application for PSLF was released on September 1, 2017 and can be found at https://studentaid.ed.gov/sa/sites/default/files/public-service-application-for-forgiveness.pdf.