Public Service Student Loan Forgiveness: Eligibility and How to Apply

If you didn’t know, you may be qualified for the Public Service Loan Forgiveness Program if you work for a non-profit organization or a U.S. federal, state or local government. 

To find out if you meet the requirements for a PSLF application and understand how to take the right steps, keep reading.

What is Public Service Loan Forgiveness and How does it work?

Public Service Student Loan Forgiveness (PSLF) is a federal initiative aimed at encouraging students to pursue careers in the military, government, teaching, nursing, public interest law, and other relatively low-paying fields like firefighting and public service.

For you to be able to qualify for tax-free forgiveness, you will have to make 120 payments over 10 years while working for the government or a non-profit. That is after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualified employer, the PSLF Program forgives the remaining debt on your Direct Loans. Professionals who choose to work for nonprofit or governmental organizations may also benefit from this program by reducing their educational expenses and debt loads.

Depending on your employer and the types of loans you have, you can make use of the PSLF Help Tool on the federal student and website to determine your eligibility.

Due to the COVID-19 pandemic, there have been temporal adjustments made to the Public Service Loan Forgiveness program. They are;

1. Until August 31, 2022, there are no payments owed on any federal student loans because they have been placed in forbearance.
2. A limited waiver of some onerous requirements for PSLF qualification has been provided by the Education Department till October 2022.

As long as you were employed by a qualified employer at the time, the waivers for PSLF qualification mean that a wider range of previous payments on federal loans will count toward forgiveness.

Forbearance of Federal Loans Payments 

Until the extended automatic forbearance expires on September 1, 2022, federal student loan borrowers who are eligible for PSLF are not required to make payments.

Those months of nonpayment will count toward the 120 payments required to be eligible for PSLF as long as you still work full-time for an eligible employer.

Limited Waivers for Public Service Loan Forgiveness Applicants

Regardless of the payment plan, you have been on, all payments made on your federal loans will count toward PSLF under the limited waiver. Before, only payments which were made under certain repayment plans qualified.

Those payments made in the past and were rejected because they weren’t received in time will now be taken into account for PSLF.

For more information, you can visit the limited PSLF waiver page

Who is a Qualifying Employer?

The particular job you perform for your employer does not matter when it comes to your employment being eligible for the PSLF Program. It concerns who your employer is and not the other way around.

PSLF is obtainable to those who work for the following categories of organizations:

1. Government organisations at any level either federal, state, local or tribal including the U.S military.
2. Organizations that are not for profit and are free from taxes under Internal Revenue Code Section 501(c)(3).
3. Working as a full-time volunteer with AmeriCorps or the Peace Corps also qualifies as employment for the PSLF Program.

The following employer categories are ineligible for PSLF:

• Labour unions
• Political organisations with a partisan stance
• Organisations that are profit-based such as for-profit government contractors.

So if you are working for an organisation that has a contract with a qualifying employer, it is your employer’s status—not the status of the organisation with which your employer has a contract that determines whether your employment is eligible for PSLF.

What are Qualifying Payments?

Your payment constitutes a qualifying monthly payment if it is;

• After October 1, 2007
• Under a certain qualifying repayment plan
• For the complete sum owed as indicated on your bill
• 15 days or less following your due date and lastly
• While working full-time for a qualified employer.

You can only make qualifying monthly payments when the payments are required of you. As a result, you cannot make a qualifying monthly payment as long as your loans are in the grace period, and an in-school status or forbearance.

You can make qualifying payments if in forbearance when you contact your federal student loan servicer to have the forbearance waived.

How to Qualify for a Public Service Loan Forgiveness 

To qualify for a Public Service Loan Forgiveness, certain things need to be considered. They are;

• Employer Rule: You must be employed by a non-profit organization or a U.S. federal, state, local, or tribal government (federal service includes U.S. military service)
• Employment Rule: You must have full-time employment with that institution or company. For PSLF, you are regarded as a full-time worker if you meet your employer’s definition of full-time employment or if you put in at least 30 hours per week and if you work a cumulative average of at least 30 hours per week with your employers while working more than one qualifying part-time job at once, you will also be regarded as working full-time.
• Loan Type: You must possess Direct Loans or combine them with other Federal Student Loans. Before October 2021, only loans that were made with the William D. Ford General Direct Loan Program were eligible for PSLF. This has been modified by The Department of Education. The Federal Family Education Loan (FFEL) Program and the Perkins Loan Program both offer qualified loans.
• Repayment Plan: You must pay back your loans according to an income-driven payback schedule. You have to enrol in a qualifying repayment plan.
• The Required Payments: You must make 120 qualifying payments monthly to qualify for the PSLF program.

All these are what you need to do and to ensure that you are certainly on the right track, you must fill out a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF Form) every year or whenever you change employers. You will be informed if you’re making eligible PSLF payments using the data you provided on the form. This will enable you to ascertain as soon as possible whether you are on the correct path.

How You Can Apply for a Public Service Loan Forgiveness

Only one PSLF form is all there is. It serves as the PSLF Application as well as the PSLF Employer Certification Form. 

To certify your employer and determine if you are eligible for forgiveness, this form must be submitted, unless you are a member of the military service or a federal employee who is exempt.

Start this process when you begin your first qualifying job. Thereafter, you have to recertify once a year or whenever you change employers.

Once you have made 120 qualifying payments, you are to submit the PSLF application for forgiveness.

Note that when you apply, your employer must be qualified.

Below are the steps that you must follow to submit the PSLF Form:

1. Complete the form and look out for any errors. You must state whether you are reviewing your payments, your employer, or applying for forgiveness.
2. Your employer must complete and certify certain sections of your PSLF application.
3. After this, submit the form by uploading or mailing it to FedLoan, which is the student loan servicer that manages PSLF loans.
4. The servicer will check your eligibility status and notify you if there are any changes you need to make to be eligible for PSLF.
5. The servicer will also calculate the total number of qualifying payments you’ve made and the remaining payments you have to make.
6. When it has been determined by the servicer that you made 120 qualifying payments, you will get notified and the remaining principal and interest are forgiven.

What to do if Your PSLF Form is Rejected

If you are simply ineligible for PSLF because some or all of your payments were not paid under a qualifying repayment plan for PSLF, you may still be qualified for loan forgiveness. If you satisfy these criteria, you will be considered for Temporary Expanded PSLF (TEPSLF) eligibility under the expanded list of TEPSLF-eligible repayment plans.

The Department of Education 2021 modifications also put in place a process to review PSLF applications that are rejected due to certain errors and enable borrowers to have decisions about their loans reconsidered.

If it is decided that you are not qualified for loan forgiveness, we will let you know and explain the reason(s) why. After then, you’ll have to start repaying your debts following the conditions of your Master Promissory Note. Visit https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service/temporary-expanded-public-service-loan-forgiveness if you are rejected.

How to Use the PSLF Help Tool

Borrowers can learn more about the requirements for forgiveness using the PSLF Help Tool provided by the Department of Education https://studentaid.gov/pslf/. The PSLF tool cannot be accessed without logging in with your FSA ID and it is easy to make use of. First, you have to:

• Review the eligibility details and PSLF requirements.
• Once you enter your employer details in the tool, the tool will inform you if your employer qualifies for PSLF
• View the eligibility or ineligibility of each of your student loans for PSLF, as well as an estimate of qualifying payments made.
• Get recommendations for steps you may take to increase your PSLF forgiveness eligibility.