The government designed Public Service Loan Forgiveness (PSLF) to reward public servants. If they are eligible, individuals working in select government and nonprofit organizations can apply for loan discharge. Keep in mind that there are several restrictions regarding this initiative.
As always, Chipper is here to help you understand how this solution works. Read on to discover how to apply for student loan forgiveness for public service.
Before you enroll for PSLF, check out the three criteria for qualification below. You can use the PSLF Help Tool to check your eligibility.
1. Work Full-Time With a Qualifying Employer
The first criterion to qualify for PSLF is to work full-time in public service for at least ten years. What you do and who your employer is play a crucial role in securing this loan relief.
Typically, these employers qualify for PSLF:
- Government organizations: federal, state, local, or tribal
- Nonprofit organizations under the 501(c)(3) classification
- Nonprofit organizations that don’t fall under 501(c)(3) but with a primary purpose to provide public service
- The Peace Corps or AmeriCorps
2. Apply for a Qualifying Repayment Plan
To qualify for PSLF, you have to enroll in any of these income-driven repayment plans:
- Pay As You Earn (PAYE) Repayment Plan
- Income-Based Repayment (IBR) Plan
- Revised Pay As You Earn (REPAYE) Repayment Plan
- Income Contingent Repayment (ICR) Plan
These plans cover payment terms between 20 – 25 years.
3. Make 120 Qualifying Payments
The last essential criterion to become eligible for PSLF is to make 120 qualifying payments, which should follow these guidelines:
- Done after October 1, 2007
- Made through one of the four approved income-driven repayment plan options
- Accomplished not later than 15 days after the due date
- Executed while working full-time for a qualifying employer
If you are eligible for PSLF, download the Public Service Loan Forgiveness employment certification form, fill it out, and submit it to FedLoan Servicing. Attach an employment certification for every employer you had while making the payments.
You only need to submit one form for your current employer if you’ve been completing them diligently.
Afterward, submit your documents to this address:
US Department of Education
PO Box 69184
Harrisburg, PA 17106-9184
FedLoan Servicing will confirm the receipt of your paperwork. While the agency processes your application, you are not required to make loan payments.
Recent PSLF statistics reveal that the government denied 98% of applicants from November 2020 to April 30, 2021. Its complicated, decade-long requirements can be overwhelming for both the borrowers and the approvers.
Don’t feel bad if you don’t qualify for the plan; there are other available options for you. Below are some alternatives to PSLF:
- Stick to an income-driven repayment plan. Remember, unlike PSLF, the forgiven amount for such programs is taxable.
- Consider refinancing options. Student loan refinancing can help you move toward financial independence faster.
If you’re still unsure about the best path for you, sign up for a free Chipper account today. We’re here to help you make the smartest student loan decisions.