Which Loans Are Eligible for Public Service Loan Forgiveness?
Some loans are eligible for public service loan forgiveness and some are not. Federal student loans are eligible or can be made eligible. Private student loans are not eligible.
Federal Direct Loans Are Eligible
Federal loans in the Direct Loan program are eligible for public service loan forgiveness.
All other federal education loans, such as loans in the Federal Family Education Loan Program (FFELP) and Federal Perkins Loans, are not eligible for public service loan forgiveness.
Other Federal Loans Can Become Eligible
However, a borrower can convert FFELP loans and Federal Perkins Loans into eligible loans by consolidating them into a Federal Direct Consolidation Loan.
If you consolidate your loans, only payments made on the new consolidation loan will count toward loan forgiveness. Previous payments will not count, not even if you were in an income-driven repayment plan and working full-time in an eligible public service job. Public service loan forgiveness is provided on a per loan basis, not per borrower. The consolidation loan is a new loan, with its own qualifying payment count.
Private Loans Are Not Eligible
Private student loans and private parent loans are not eligible for public service loan forgiveness. Only federal loans are eligible.
Non-education loans, like credit card debt, personal signature loans and home equity loans, are also not eligible for public service loan forgiveness.
Federal Parent PLUS Loans May Be Eligible
Federal Parent PLUS loans are eligible for public service loan forgiveness. However, Parent PLUS loans are not directly eligible for an income-driven repayment plan. Since a loan in a standard 10-year repayment plan will have no balance remaining after ten years of payments (120 payments), borrowers must repay their loans in an income-driven repayment plan in order to qualify for some forgiveness.
There is, however, a loophole that Parent PLUS loan borrowers can use to repay their loans in an income-driven repayment plan. If a Parent PLUS loan entered repayment on or after July 1, 2006 and is included in a Federal Direct Consolidation Loan, the consolidation loan is eligible for income-contingent repayment.