Public Service Loan Forgiveness

The Education Department is making it easier for borrowers in public service to qualify for one of its largest loan forgiveness programs. Public Service Loan Forgiveness program forgives your federal student debt after 10 years of work and 120 qualifying payments.

The Federal Public Service Loan Forgiveness Program (PSLF) forgives any remaining balance on your federal student loans after you make 120 qualifying payments while working for a nonprofit or government organization. The PSLF program was created in order to encourage people to work in high-impact careers that benefit their communities. It lowers the primary barrier that prevents many people from pursuing these roles, including the cost of obtaining an advanced degree that may be required as part of a professional licensure process for some positions like nursing or law.

While PSLF can offer significant relief for some, it’s important to understand the eligibility requirements for the program. Borrowers must make 10 years’ worth of payments, or 120 separate monthly payments, in order to qualify for PSLF. Additionally, borrowers must have their employment certified by their employer in order to receive credit toward loan forgiveness. This can be done by completing the Employment Certification for PSLF form on an annual basis.

PSLF Eligibility
Public Service Loan Forgiveness 1

PSLF Eligibility

The requirements for PSLF are complex, but it’s important to understand them before applying. To qualify, borrowers must make on-time monthly payments in the required amount while they’re employed by a qualified employer. This includes governmental and not-for-profit organizations that are tax-exempt under section 501(c)(3) of the Internal Revenue Code. Borrowers must also make the required payments for a period of 10 years or more. It’s important to note that these years of repayment do not need to be consecutive.

To track progress toward PSLF, borrowers should submit an Employment Certification Form to their student loan servicer. This should be completed annually and every time a borrower changes jobs. While it isn’t a requirement, the Department of Education recommends doing so to help borrowers and their employers verify eligibility. Borrowers should also be aware that only payments made on eligible loans will count towards the 120-payment requirement. Previously, the Department of Education only considered regular payments to be qualifying, but now it will consider lump sum payments as well.

During the COVID-19 pandemic, the Department of Education extended the deadline for the Employment Certification Form to October 31, 2023. The Department also announced that borrowers who were granted COVID-19 administrative forbearances to cover medical expenses would receive credit toward PSLF and TEPSLF for the period covered by their suspension. This extension and new rule will give borrowers more flexibility to keep their loans on track for forgiveness.

To learn more about how PSLF works, visit the Department of Education’s website or use the PSLF Help Tool. The tools can help borrowers determine whether their current employer is eligible for PSLF and estimate how many payments they will need to make before their debt is forgiven. The tools can be used with Direct Loans and FFEL loans. However, Perkins loans and other types of loans are not eligible for forgiveness under the PSLF program.

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