January 22, 2022

Is the Public Service Loan Forgiveness (PSLF) Program Worth Doing?


Over the few past decades, crushing student loans have prevented young Americans from getting married, starting a family, and purchasing houses. Many of them think student loan forgiveness programs such as Public Service Loan Forgiveness (PSLF) are ideal ways to climb back out of debt. However, the answer to the question, “Is PSLF worth it?” is more complicated than a simple yes or a no.

There are many factors to consider regarding this program. This article will help you learn more about such components and ultimately decide if it’s ideal for you.

1. Long Wait

The PSLF is one of the few loan forgiveness options that the government offers federal, state, local, or tribal government and non-profit organization employees. It will take at least ten years of service to qualify for the program.

If this career path lines up with your life goals, then the PSLF is a viable option for you. However, if you have another profession in mind, you’re better off with other student loan payment solutions.

2. Low Approval Rates

Congress developed PSLF in 2007 during the latter years of the Bush administration. It offered a straightforward premise. The government will forgive the loan amount left after 120 monthly payments from employees of qualified organizations — teachers, firefighters, nurses, and public service workers, among others.

PSLF numbers show a shockingly low approval rate of 1%. The top rejection reason is not having enough qualifying payments, but the 99% disapproval rate is still a discouraging figure.

3. Growing Balance

You need to apply for an extended repayment program to qualify for PSLF. Loan extension is not a requirement, but there would be no loan to forgive under the standard ten-year plan. Extending your term to 20 or 25 years would equate to lower monthly payments — a welcome circumstance if you struggle with remittances.

However, the drawback is you end up with debt for an extended period. The more you prolong your payment duration, the more interest you incur.

4. Massive Tax Bill

You can wipe your balance completely when you get loan forgiveness from an income-driven plan, but you still have to think of your tax bill. With such programs, the government treats your forgiven amount as a taxable income that you should pay in full in the same year as the loan forgiveness.

On the plus side, the federal government currently does not tax PSLF. Also, the American Rescue Plan states that loan forgiveness programs until 2025 will be tax-free. However, such conditions might change after the pandemic.

Explore Your Repayment Options Now

Is Public Service Loan Forgiveness worth it? For some individuals, it could be. If you want to serve the government or a non-profit organization and you find yourself struggling with your monthly payments, you should consider this program.

However, the stringent requirements are not beneficial for most borrowers. Don’t let your student loan debt weigh you down, though. There is an ideal repayment option for you.

At Chipper, we’ve helped tens of thousands of members pay off loans four years faster, save an average of $307 on monthly payments, and achieve loan forgiveness. Become a member today to discover the best repayment solutions.

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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