Public Service Loan Forgiveness (PSLF) is the miracle everyone with student loan debt dreams about. PSLF can wipe away all of your remaining student loan debt in as little as 10 years. This forgiveness is entirely tax-free.
So what’s the catch? Where you’re employed and the type of loans you have determines your eligibility for the program. Continue reading to see if you qualify for PSLF and how to get it.
Eligible PSLF employers
Qualifying for PSLF has nothing to do with what you do for a company or employer. Instead, it’s about your employer’s designation. You can be eligible for PSLF if you work for any of the following:
- Government organizations at any level (federal, state, local or tribal)
- Nonprofit organizations that are tax-exempt under Section 501(c)(3)
- Other types of nonprofit organizations that are not tax-exempt under Section 501(c)(3), if their primary purpose is to provide qualifying public services
- Americorps or Peace Corps
Working as a contractor for the government doesn’t qualify you for PSLF. Common jobs that qualify for PSLF are teachers, doctors and nurses.
If you can check the box for having a qualifying employer, you’re off to a good start.
You must also work full time for your qualifying employer. This is at least 30 hours per week. If you happen to work two jobs, each with a qualifying employer, then you can still be considered full time for PSLF.
Types of student loans eligible for PSLF
One reason people don’t get PSLF is ineligible loans. Your first step toward loan forgiveness is to figure out what type of student loans you have. You can find a record of all your federal student loans by logging into the National Student Loan Data System.
Student loans under the William D. Ford Direct Loan Program, or Direct Loans, are eligible for PSLF. This includes:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
- Direct Consolidation Loans
These loans must also be in good standing (not in default) in order to remain eligible.
Student loans taken out before 2010 are most likely under an older federal student loan program — the Federal Family Education Loan (FFEL) Program. FFEL Loans aren’t eligible for PSLF.
Those aren’t the only federal loans that don’t qualify. If you have any of the following loans, they’re ineligible:
- Federal Perkins Loans
- Health Education Assistance Loans
- Federal Nursing Loans
- Parent PLUS Loans
Don’t worry, that’s not the end of the road for you to be eligible for PSLF with these loans. You can consolidate them to qualify for PSLF. You must consolidate to a Direct Consolidation Loan through the U.S. Department of Education. This then turns all your loans into one Direct Loan that’s eligible for PSLF.
Caveat about the Direct Consolidation Loan
Something to remember: Payments you made toward any ineligible loans prior to the Direct Consolidation Loan won’t be counted toward the PSLF payments. If you just graduated or haven’t been on an income-driven repayment plan up to this point, it’s wise to consolidate all of your student loans.
A Direct Consolidation Loan isn’t a good idea, however, if you’ve been making qualifying payments toward PSLF. You’re resetting the clock for counting PSLF payments. Instead, you can plan to tackle those other types of loans separately.
If you have private student loans in addition to federal student loans, you need to come up with a different plan for them. This could be mean refinancing your private student loans for a lower rate.
Once you have your loans figured out, you need to get on a qualifying payment plan for PSLF.
Income-driven repayment plans
To be eligible for PSLF, you need to be enrolled in an income-driven repayment (IDR) plan. There are four options for IDR plans that include:
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
All of these plans take into account your income to determine what your monthly payment will be. Since you’re going for complete student loan forgiveness, the lowest qualifying payment possible is the goal. You can use the Student Loan Planner calculator to see which plan will give you the lowest monthly payment.
To enroll in an IDR plan, you need to fill out an application at StudentLoans.gov.
Qualifying payments and your PSLF payment count
PSLF takes a minimum of 10 years to wipe out all your student loans. This is because you need to make 120 qualifying payments in order to get PSLF.
Being on an IDR plan and having a qualifying employer is only part of this. A qualifying payment also needs to be made:
- After Oct. 1, 2007
- For the full amount due as shown on your bill
- No later than 15 days after your due date
You also can’t make qualifying payments when a payment isn’t required. For example, any payments made during your grace period or when you’re in school don’t count toward the 120 qualifying payments.
The payments you make don’t need to be consecutive. If you leave a qualifying employer for a few years but later work with another qualifying employer, you can pick up where you left off with your payment count.
If you meet all the requirements for PSLF, you should apply as soon as possible to get your payment count going.
7 steps to apply for Public Service Loan Forgiveness
Complete the application for PSLF as soon as you can. You want to be enrolled in the program so you can track your progress.
There are two ways for you to complete the Public Service Loan Forgiveness application. The first is to partially fill it out online, then print and sign. The second is to complete the paper application. Either way, the information you provide will be the same.
Before you turn in the form, remember that you need to use dark ink for all portions you complete on paper. Also, dates must be entered as “mm-dd-yyyy” and can only include numbers.
Step 1: Check your eligibility online
Triple check your eligibility by using the PSLF Help Tool. The tool will make sure you have the following:
- Qualifying employer
- Qualifying loans (or consolidation to a Direct Loan)
- Enrolled in an IDR plan
In the image below, you can see that this individual has a few loans that don’t qualify for PSLF.
If you use the PSLF Help Tool, it will generate a partially completed form for you to have your employer sign. If you don’t want to complete the online form, you can print a paper application.
Step 2: Provide your general information
On the paper form, you need to fill out your information first. This includes:
- Social Security number
- Date of birth
- Name, address and phone number
The PSLF Help Tool will have this information because you must log in with your Federal Student Aid (FSA) ID to access the form.
Step 3: Sign the fine print
Next, you’ll certify that you understand what you’re requesting and that the information you provided is correct.
Step 4: Fill in your employer’s details
On both forms, you’ll provide the details of your employer. You’ll need your W-2 to access the Federal Employer Identification Number and to answer all the questions.
When completing this section, it’s important for you to take note of the employment start date, as this must remain the same on future recertification forms.
The PSLF Help Tool will get you to this point in the application. Then you can click the button to generate the application and print it.
Step 5: Have your employer sign the form
Bring the form to your employer for their review. They’ll need to sign off on your application.
If you used the PSLF Help Tool, the signature sections must be completed by hand. You’ll need to go back to section two and sign the certification portion at this time, too.
Step 6: Review and make a personal copy
Double-check your form and make a copy. You’ll need to keep this form to refer back to when recertifying.
Step 7: Submit your application
Send your PSLF application to the U.S. Department of Education / FedLoan Servicing. Your loan servicer may also want a copy; you can reach out to it to check its policy on this.
The address is:
U.S. Department of Education
FedLoan Servicing
P.O. Box 69184
Harrisburg, PA 17106-9184
If you already have your loans serviced by FedLoan, you can scan the signed form and upload it to your account.
After you apply for PSLF, you can check the status of your application by calling FedLoan. It will be in contact with you to determine whether you’re eligible for the PSLF program. If you’re accepted, your loans will be transferred to FedLoan.
Common problems when entering PSLF
There are some common problems you might face once you’ve completed the PSLF application. Below are a few scenarios you should familiarize yourself with in case they happen to you.
Your payment count is off
Let’s say you completed the application and are approved for the PSLF program. Your loans will then transfer to FedLoan Servicing (unless it’s already your servicer). It will count your past payments and determine how many qualify. In many cases, it will miscount the payments you’ve already made.
Know the number of qualifying payments you’ve already made while at your qualifying employer. Make sure they’re applied to your PSLF payment count. If not, you need to take action to get your PSLF payment count fixed.
Paid ahead status
You don’t ever want to make any extra payment toward your student loans once you’ve entered PSLF. This won’t let you speed up the process for 120 qualifying payments — you only get one per month. Instead, this could actually slow you down.
Your account could be marked as “Paid Ahead.” This means the extra money you paid will be applied to a future payment, so FedLoan will withdraw less than the full payment from your account the following month. This translates to a non-qualifying payment toward PSLF. You want every payment you make to be qualifying, so don’t let paid ahead status slow you down.
You were denied despite making all your payments
If you’re one of the individuals who has already completed their 10 years of service and is ready to have all their loans forgiven, you might still get denied. The PSLF program is a work in progress, and the fact is, tons of individuals are rejected just when they thought they could be totally debt-free.
The government realized there was work to be done as far as clarity about the program for participants. For this reason, it started the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program.
To be clear, this is for those who have completed their 120 payments and thought they were on track but may have received misinformation from a loan servicer. If you were denied because some or all of your payments weren’t made under the proper repayment plan, you could be eligible for TEPSLF. You’ll want to read more on this and prepare an email in your defense.
If you’re still pursuing PSLF or were just admitted to the program, make sure you aren’t denied.
How to stay eligible for Public Service Loan Forgiveness
Every year you’re enrolled in PSLF, you need to complete a recertification form. The Public Service Employment Recertification Form is used to make sure you stay on track with the forgiveness program.
The form is almost identical to the PSLF application. When you complete it, be sure to reference your PSLF application and use the same employment start and end dates. Otherwise, you’ll be denied and have to send in another one.
You need to complete this form annually like clockwork. Set a reminder in your phone so you don’t miss it. You should also complete the form anytime you change jobs.
This is important because FedLoan reviews the form and updates your payment count. It also verifies that your employment is still eligible. Don’t forget to keep a copy for your own records every time you submit the form.
If you have more questions about your status with PSLF, you can reach out to FedLoan Servicing. If you’re not sure PSLF is the right step for you and want to talk to a professional about your options, then contact Student Loan Planner today.
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Hi, I’m not sure if you’re allowed to answer this on here or if I’m supposed to make an appointment to speak with someone, but here goes: I’m looking to do PSLF, my loans just went into repayment status, my current job makes me eligible (I think), but I’m not sure what’s gonna happen in 3 years, I might have to quit this job and start privately, should I do direct consolidation? can I refinance if my job after 3 years is in the private sector. Currently I work as a chiropractor contracted out to a FQHC facility through a private university as part of a post-doc residency program. Thank you! Any help would be appreciated.
Sounds like a complex employment status. If you’re single and gonna do PSLF the full 10 years no matter what and have all direct loans and are either on REPAYE or PAYE then you’re in good shape. Anything else and you probably need to book a time (married, tax filing issues w loan payments, whether you have to do PSLF, etc)
Hello, can I apply for PSLF now and have last payments be applied if I get certifications of employment time frames from each employer? Thank you— Susane
Yes but keep the pmts going