In 2007, Congress created the Public Service Loan Forgiveness Program to encourage individuals to enter and continue to work full time in public service jobs.
Under a traditional payment plan, the borrower makes payments for up to 10 years to pay the principal and interest accrued on his or her student loan(s).
Under the PSLF program, eligible borrowers (must be employed full time by certain
public service employers) may make 120 reduced payments under the IBR (Income Based Repayment Plan) or ICR (Income Contingent Repayment Plan).
At the end of the 10 year period, any unpaid principal or interest will be forgiven.
Any non-defaulted loan made under the William D. Ford Federal Direct Loan Program (Direct Loan Program) is eligible for loan forgiveness. (See below for information on how non-Direct Loans may be eligible.) The Direct Loan Program includes the following loans:
NOTE: To qualify for forgiveness of a parent PLUS Loan you, the parent borrower, not the student on whose behalf you obtained the loan, must be employed by a public service organization.
Although loan forgiveness under this program is available only for loans made and repaid under the Direct Loan Program, loans made under other federal student loan programs may become eligible for forgiveness if they are consolidated into a Direct Consolidation Loan. However, only payments made on the Direct Consolidation Loan will count toward the required 120 monthly payments.
The following loans may be consolidated into the Direct Loan Program:
NOTE: To consolidate a Federal Perkins Loan into the Direct Loan Program, you must also consolidate at least one FFEL Program Loan or Direct Loan. If you are unsure about what kind of loans you have, you can find information about your federal student loans in the U.S. Department of Education’s National Student Loan Data System at www.nslds.ed.gov.
WARNING - if you consolidate Perkins Loans, you will lose the benefits associated with those loans, such as the 5% fixed interest rate and loan cancellation benefits for graduates working in criminal justice, health or education professions. Click here for more information regarding Perkins Loan cancellation.
You must have made 120 separate monthly payments after October 1, 2007, on the Direct Loan Program loans for which forgiveness is requested. Earlier payments do not count toward meeting this requirement. Each of the 120 monthly payments must be made for the full scheduled installment amount within 15 days of the due date.
The 120 required payments must be made under one or more of the following Direct Loan Program repayment plans:
For more information about the repayment plans available in the Direct Loan program, please visit http://www.direct.ed.gov/RepayCalc/dlindex2.html
IMPORTANT NOTE: The PSLF Program provides for forgiveness of the remaining balance of a borrower’s eligible loans after the borrower has made 120 qualifying payments on those loans. In general, only borrowers who are making reduced monthly payments through the Direct Loan Income Contingent or Income Based repayment plans will have a remaining balance after making 120 payments on a loan.
NOTE TO PLUS LOAN BORROWERS:
A Parent PLUS borrower’s eligibility for PSLF is based on the parent’s qualifying public service employment, not on the employment of the dependent student on whose behalf the parent borrowed. Secondly, to qualify for PSLF, the parent borrower must consolidate Parent PLUS Loans into a Direct Consolidation Loan. Direct Consolidation Loans that repaid parent PLUS loans may be repaid under the ICR Plan.
You must be employed full time (in any position) by a public service organization, or must be serving in a full-time AmeriCorps or Peace Corps position. Organizations that meet the definition of "public service organization" for purposes of the PSLF Program are listed below.
NOTE: When determining full-time public service employment at a not-for-profit organization, you may not include time spent participating in religious instruction, worship services, or any form of proselytizing.
For detailed information about the PSLF program, including how to monitor your progress toward qualifying for PSLF, review the PSLF Questions and Answers document at http://www.studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service or contact your Direct Loan servicer.
To apply for Public Service Loan Forgiveness, you must print and complete the borrower section of an application, have your employer's Human Resources Office complete the Employer Certification Form, and submit it to FedLoan Servicing.
If you are eligible for the PSLF program, your loan will be transferred from your current loan servicer to FedLoan Servicing. FedLoan Servicing will then track any eligible payments you have made to date as well as future payments.
Please visit the FedLoan Servicing website for complete details and to print an application: http://www.myfedloan.org/manage-account/loan-forgiveness-discharge-programs/loan-forgiveness.shtml