April 16, 2021

Does Refinancing Student Loans Negate Public Service Loan Forgiveness?


One of the biggest things that discourage aspiring graduates from realizing their dreams is student loan debt. In some cases, borrowers spend most of their lives paying their debt off. It’s not that they don’t want to pay or do not have the means to do so, what makes it extra difficult are the outrageous interest rates that come with student loans. In this article, we'll dive into ways to negate those high interest rates, specifically by pursuing public student loan forgiveness or by refinancing student loans.

What Is PSLF?

Public Service Loan Forgiveness is a federal program that aims to forgive student loans after 120 on-time payments. People who work at a government agency or a nonprofit organization are eligible for this program. If you have private loans, they are not eligible for PSLF. ☹️

To qualify for this program, you also need to work full-time (at least 30 hours per week). You’ll have to work in public service for 10 years while paying your student loans. After that, you may apply for PSLF to have your remaining debt forgiven.

What Are the Implications of Choosing This Option?

PSLF is a good option for people who want to pursue a career in public service. However, ten years can be considered too long for the sake of loan forgiveness. This is especially true if you don’t have a definite career path drawn out yet. The time you should have spent planning and building your career path is used instead to pay off student loans. In this case, you may have to consider something else such as choosing to refinance your student loans.

Are There Any Alternatives to PSLF?

Yes, there are alternatives. PSLF is the most widely known federal forgiveness program, but there are other similar options that you may consider.

  • Income-driven repayment plan: This is a good choice for people who have higher student debt amounts in relation to their current income. Being enrolled in an income-driven repayment plan is also a requirement for the PSLF program. Read more about income-driven repayment and the different plans to choose from here.
  • Loan forgiveness for nurses: Nurses have many related programs to choose from. Most of these can forgive up to 85% of unpaid loans.
  • Loan forgiveness for teachers: Teachers who work in Title 1 elementary or secondary schools are eligible for the Teacher Loan Forgiveness program. After five years of complete and consecutive service, teachers can have either $5,000 or $17,500 forgiven depending on the subject and grade level they teach.
  • Private refinancing: For this approach, you have to consolidate most of your loans with the help of a private lender. You can get the payment terms restructured with better terms and lower interest rates. To be eligible to refinance a federal loan, you need to have a stable income source and a good credit score. This may be the best choice for you if you don’t plan on working in public service, especially if taking advantage of income-driven repayment does not benefit you. Going for a student loan refinancing option might be a good idea if you’re also not planning on claiming federal loan benefits anyway.

Consolidating What You Learned

Does refinancing student loans negate Public Service Loan Forgiveness? The answer to this question is: yes. Refinancing federal student loans will negate PSLF! This means that you’re no longer qualified for income-driven repayment plans or federal forgiveness programs. If you’re financially stable and can pay for the loans regularly, refinancing should not be an issue at all.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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