Eligibility for Public Service Loan Forgiveness (PSLF) is complicated, with a lot of details. This checklist will help you make sure you satisfy all of the criteria. Pay attention to the details.
The most common errors involve submitting an incomplete application for public service loan forgiveness, not having made enough qualifying payments, making payments in the wrong repayment plan and loans that are not eligible.
A one-page public service loan forgiveness checklist provides a tool for complying with the requirements for loan forgiveness.
[Editor’s Note: Since this article was published, the U.S. Department of Education has provided a PSLF Help Tool to help borrowers determine whether their loans and employer qualify for PSLF and to prefill the employer certification form. The tool can also specify actions that must be taken to qualify for PSLF, such as moving the loans into the Direct Loan program and changing repayment plans.]
Type of Student Loans
- To be eligible for PSLF, the loans must be in the Federal Direct Loan program, more formally known as the William D. Ford Federal Direct Loan Program.
- Eligible loans include subsidized and unsubsidized Federal Direct Stafford Loans, Federal Direct PLUS Loans, and Federal Direct Consolidation Loans.
- Federal Perkins Loans are not eligible.
- Loans in the guaranteed student loan program, more formally know as the Federal Family Education Loan Program (FFELP), are not eligible. These are federal loans that were funded by banks and other financial institutions, but guaranteed against default by the federal government.
- FFELP loans and Federal Perkins Loans may be refinanced into Direct Loans by consolidating them into a Federal Direct Consolidation Loan at Studentaid.gov. Note that consolidation resets the clock on PSLF, since the consolidation loan is a new loan that repays the existing loans and does not inherit the qualifying payments on the loans that were consolidated. Federal Perkins Loans that are consolidated into a Direct Loan lose the subsidized interest benefits available for Federal Perkins Loans.
- Private student loans and other non-federal student loans are not eligible for PSLF.
- Forgiveness is per-loan, not per-borrower.
Number of Qualifying Payments
- The borrower must make 120 qualifying payments.
- Although the number of qualifying payments is sometimes referred to as 10 years of payments, it is the number of payments that matters, not the number of years in repayment.
- The 120 qualifying payments do not need to be consecutive.
- Only payments made on or after October 1, 2007, will count as a qualifying payment. Prior public service does not count.
- To be considered a qualifying payment, a payment must be made in an eligible repayment plan in the Direct Loan program while the borrower is working full-time in qualifying employment. All criteria must be satisfied simultaneously for the payment to count as a qualifying payment.
- The payment must be made in full and on time. Partial payments do not count. Late payments made more than 15 days after the due date do not count.
- Payments made while the loans are in a deferment, grace period or forbearance do not count.
- The borrower must not be in default on the loan for which forgiveness is requested.
- Some payments may not count toward PSLF if the borrower filed their annual certification paperwork late.
- A lump sum payment that is the equivalent of more than one payment counts as only one payment, even if the loan is then in a paid-ahead status because the payment was applied to future installments. However, there are a few exceptions:
- Full-time employees of AmeriCorps or Peace Corps who use their Segal Education Award or Peace Corps transition payment to make a lump sum payment that is the equivalent of up to 12 student loan payments at the end of the volunteer service period.
- A lump sum payment made by the U.S. Department of Defense on behalf of members of the U.S. Armed Forces counts as the equivalent number of payments. Such lump sum payments are limited to once a year.
Eligible Repayment Plans
- The loans must be in a Standard 10-Year Repayment Plan or one of the four income-driven repayment plans, namely Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay-As-You-Earn Repayment (PAYE) or Revised Pay-As-You-Earn Repayment (REPAYE).
- Including a Federal Parent PLUS loan in a Federal Direct Consolidation Loan may limit the repayment plans available for PSLF to Standard 10-Year Repayment and Income Contingent Repayment.
- Loans in Graduated Repayment, Extended Repayment or Income-Sensitive Repayment do not qualify for PSLF.
- Note that the U.S. Department of Education sometimes refers to Extended Repayment as Standard Repayment. Only the 10-year Standard Repayment Plan qualifies. A “Standard Repayment” plan with a longer repayment term does not qualify.
- If the calculated monthly payment under an income-driven repayment plan is zero, it still counts as a payment for PSLF purposes.
- Congress provided some funding for Temporary Extended Public Service Loan Forgiveness (TEPSLF) for borrowers who were in a graduated repayment or extended repayment plan, provided that the borrower’s last payment and the payment 12 months before the last payment were at least as much as the monthly payment under an income-driven repayment plan. Under current rules, borrowers must apply for PSLF and be denied before they can be reconsidered under TEPSLF.
- The borrower must work full-time in a qualifying public service job at the time each qualifying payment is made.
- The borrower must also be working in a qualifying public service job at the time the forgiveness is received.
- Full-time employment requires an annual average of at least 30 hours a week.
- A combination of several qualifying part-time jobs may count as the equivalent of full-time employment if the combined number of hours is at least 30 hours a week.
- Teachers who are under contract for at least 8 months are considered as working a full-time job if they work at least 30 hours a week and are considered by their employer to be employed for the full year.
- Qualifying public service jobs generally include employment by the federal, state, county or city government (excluding time served as a member of Congress) or a tax exempt 501(c)(3) organization. Qualifying public service jobs also include
- Emergency management
- Military service (U.S. Armed Forces or National Guard)
- Public safety
- Law enforcement
- Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
- Public education
- Social work in a public child or family service agency
- Public interest law services (including prosecution or public defense or legal advocacy on behalf of low-income communities at a nonprofit organization)
- Early childhood education (including licensed or regulated childcare, Head Start, and State funded prekindergarten)
- Public service for individuals with disabilities
- Public service for the elderly
- Public library sciences
- School-based library sciences and other school-based services
- Teaching as a full-time faculty member at a Tribal College or University and other faculty teaching in high-needs subject areas or areas of shortage (including nurse faculty, foreign language faculty, and part-time faculty at community colleges)
- Qualifying employment cannot involve activities related to religious instruction, worship services or any form of proselytizing.
- Employment by a government contractor is generally not considered to be qualifying employment, unless the contractor is a qualifying 501(c)(3) organization.
- Borrowers cannot double dip. Qualifying employment in a public service job cannot qualify the borrower for both PSLF and Teacher Loan Forgiveness, Loan Forgiveness for Service in Areas of National Need, or Loan Repayment for Civil Legal Assistance Attorneys. Borrowers can qualify for both types of forgiveness, but must use separate months of service to qualify.
- The borrower must submit an application for public service loan forgiveness after making the 120 qualifying payments. Forgiveness is not automatic.
- Each employer must submit an employment certification form or parts one and two of the PSLF application.
- After the borrower has submitted an application for public service loan forgiveness, their loans will be transferred to FedLoan Servicing (1-855-265-4038).
If you are struggling with student loan debt, there are ways you can lower your student loan payments, including enrolling in an income-driven repayment plan, temporarily going on a deferment or refinancing student loans to lower your interest rate. Keep in mind that refinancing federal loans into private loans means the loss of federal loan perks, including student loan forgiveness, income-driven repayment plans and more.