Public Service Loan Forgiveness

What is the PSLF Program?

The Public Service Loan Forgiveness (PSLF) Program was created to encourage graduates to enter into full-time public service employment. To receive this type of student loan debt forgiveness, you must make 120 qualifying monthly payments on an eligible federal student loan while employed full time by a qualifying public service employer. Under this program, federal student loan payments first became eligible after October 1, 2007. Since 120 qualifying payments are required to qualify for forgiveness, the earliest possible date for granting loan forgiveness was October 2017.

Qualifying Federal Student Loans

The PSLF Program was originally set up to only cover loans made under the William D. Ford Federal Direct Loan Program. This direct loan program covers non-defaulted loans of the following types:

  • Direct subsidized loans
  • Direct unsubsidized loans
  • Direct PLUS loans
  • Direct consolidation loans

Other federal student loans may become eligible for PSLF forgiveness if they are consolidated into a direct consolidation loan. However, only payments made toward the consolidated loan are counted as qualifying payments toward the required 120 program payments. Types of loans that may be consolidated into a direct consolidation loan include:

  • Federal Family Education Loan Program loans including:
    • Subsidized Federal Stafford Loans
    • Unsubsidized Federal Stafford Loans
    • Federal PLUS loans
    • Federal consolidation loans (excludes joint spousal consolidation loans)
  • Federal Perkins Loans
  • Certain health professions and nursing loans

PSLF Program Eligibility Requirements

Eligibility for student loan forgiveness under the PSLF Program requires that the borrower, the loan payments and the borrower’s public service employment meet specific criteria.

The Borrower

To be eligible for forgiveness under the PSLF program you satisfy the following:

  • Not be in default on the loans for which you are requesting forgiveness.
  • Be employed full time by a qualified public service organization when:
    • Making each of the required 120 qualifying loan payments.
    • You apply for the PSLF loan forgiveness.
    • The remaining balance on your eligible loans is forgiven.

The 120 Loan Payments

The PSLF Program requires that you make 120 monthly payments toward the direct loans you are seeking forgiveness for. Since the program was initiated in October 2007, payments made before then don’t count toward meeting the 120-payment requirement. Timeliness of the payments is also important. All 120 qualifying payments must be made for the full scheduled installment amount and be no later than 15 days after the scheduled payment due date.

The PSLF Program also requires that the 120 required payments be made under one of the following direct loan program repayment plans:

  • Revised Pay As You Earn Repayment (REPAYE) Plan
  • Pay As You Earn Repayment (PAYE) Plan
  • Income-Based Repayment (IBR) Plan
  • Income-Contingent Repayment (ICT) Plan
  • 10-Year Standard Repayment Plan
  • Any other direct loan program repayment plan (with restrictions)

Parents, please take note of the following:

  • The REPAYE, PAYE, and IBR plans are not available for Direct PLUS loans made to you or for direct consolidation loans that repaid direct or FFEL PLUS loans made to you.
  • Consolidation loans that repaid direct or FFEL PLUS loans made to you.
  • The ICR Plan is not available for Direct PLUS Loans made to you.
  • Direct PLUS loans that repaid direct or FFEL PLUS loans made to you may be repaid under the ICR Plan.

Public Service Employment

To qualify for federal student loan relief under the PSLF Program, you must be a full-time employee of a public service organization or hold a full-time position at AmeriCorps or the Peace Corps. The following types of organizations meet the PSLF Program definition for “Public Service Organization”:

  • A government organization (including a federal, state, local, or tribal organization, agency, or entity; a public child or family service agency or a tribal college or university)
  • A not-for-profit, tax-exempt organization under section 501(c)(3) of the Internal Revenue Code
  • A private, not-for-profit organization (that is not a labor union or a partisan political organization) that provides one or more of the following public services:
    • Emergency management
    • Military service
    • Public safety
    • Law enforcement
    • Public interest law services
    • Early childhood education (including licensed or regulated healthcare, Head Start, and state-funded prekindergarten)
    • Public service for individuals with disabilities and the elderly
    • Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in healthcare practitioner occupations and health care support occupations)
    • Public education
    • Public library services
    • School library or other school-based services

The PSLF Program defines full-time employment as being at least an annual average of 30 hours per week and meeting the employer’s definition of full time. Time spent participating in religious instruction, worship services, or any form of proselytizing does not qualify.

Teachers and other public service organization employees who work under contract for at least eight out of 12 months meet the full-time requirement if they work an average of at least 30 hours per week during the contractual period and receive credit by their employer for a full year’s worth of employment.

Meeting the full-time employment requirement is possible by employment in more than one qualifying part-time job as long as the combined average time worked is at least 30 hours per week.

More information about the PSLF Program can be found at the U.S. Department of Education's Federal Student Aid website.

Keep Track of Your Eligibility

The U.S. Department of Education has prepared the Public Service Loan Forgiveness Employment Certification Form to help you keep track of your eligibility for student loan forgiveness under the PSLF Program. Submitting this form annually and whenever you change employers is one way to ensure you stay on the path to loan forgiveness.

Contact Attorney Chris Bush

Have more questions about student loan debt and whether bankruptcy is right for you? San Diego bankruptcy attorney Chis Bush advises clients on their debt relief options. Contact him at (619) 678-1134 for answers to your specific questions about Student Loan Debt and how Chapter 7 bankruptcy or Chapter 13 debt reorganization can help your financial situation. Your first consultation is free and could be the your first step towards a new start.