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