Public Service Loan Forgiveness (PSLF) was established in 2007 by the U.S. Department of Education to forgive borrowers’ federal student loans after they make at least 10 years of qualifying payments (120 monthly payments) while working full-time for certain public service employers and meeting other requirements. When the requirements are met, the remaining balance is forgiven. Key elements for this program are the type of employment, type of repayment plan, type of loan and the number of payments made.
Program Qualifications
Qualified Employers
Working full-time for a public service organization qualifies a borrower for the PSLF program. Type of work does not matter; type of entity does. A public service organization can be:
- A government organization, agency or entity at any level (federal, state, local or tribal).
- A nonprofit, tax-exempt organization (under section 501(c)(3).
- A private nonprofit organization that provides certain public services.
Repayment Plans
The type of loan repayment plan that qualifies for the PSLF program is the income-driven repayment plan. An income-driven plan sets the monthly loan payment based on the borrowers’ income and family size. Most plans of this type have a 20 or 25-year term. If there is a balance remaining at the end of the term, the amount is forgiven. All federal student loans are initially set up on a standard/traditional repayment plan. The monthly payment is set based on the amount of the loan, the interest rate, and 120 payments (10-year term). A standard/traditional repayment plan does not qualify for the PSLF program, because the loan balance will be zero at the end of the 120 payments.
Loan Types
The types of loan that qualifies for the PSLF are Direct Loans or Direct Consolidation Loans. A Direct Loan is a federal student loan made directly by the U.S. Department of Education. Direct Consolidation Loans are multiple federal education loans that have been combined into one. If loans are consolidated, only qualifying payment made to the new loan counts toward the 120 payments required for PSLF. Federal Family Education Loans (FFEL) and Federal Perkins Loans do not qualify (See the information about the Temporary Expanded PSLF program below).
Qualified Payments
The fourth element of the PSLF program is making 120 qualifying payments. A qualifying payment is paying the required amount due on or before the due date after October 1, 2007. Missed or late payments do not qualify. The monthly payments do not have to be consecutive. An example of where non-consecutive payments would qualify is if the borrower works for a qualifying employer, switches to a non-qualifying employer, then moves back to a qualifying employer.
Applying for the Program
Application for the PSLF program requires three steps:
- Certify employment at a qualifying entity.
When a borrower starts working for a qualifying entity, submit the Public Service Loan Forgiveness Certification & Application. It is recommended to apply annually or when the borrower changes employers. This is how qualifying payments are tracked. This process also helps the borrower determine if their loan qualifies. - Make 120 payments under the income-driven repayment plan while working full time.
Full-time employment is generally considered 30 hours per week or as defined by the employer. Qualifying payments can only be made during periods when payments are required. A borrower who has an in-school status, or during a grace period, deferment, or forbearance is not required to make payments. - Apply for forgiveness once the above requirements have been met.
The borrower must be employed by the qualifying employer at the time the form is submitted and when the remaining balance on the loan is forgiven.
Limited PSLF Waiver
Borrowers can also consider the Temporary Expansion of the Public Service Loan Forgiveness (TEPSLF) Program (also known as the Limited PSLF Waiver). On October 6, 2021, the U.S. Department of Education implemented temporary changes to the PSLF rules. For a limited time, through October 31, 2022, borrowers may receive credit for past payments that did not qualify for PSLF.
Payments that qualify under the Limited PSLF Waiver are:
- Qualifying payments made on Direct, Federal Family Education (FFEL) Program or Perkins Loans.
- Payments made on loans before Direct Consolidation.
- Forgiveness is not dependent upon being currently employed by a qualifying employer at the time of application.
- If you qualified for Teacher Loan Forgiveness, the period of service that led to eligibility will count toward PSLF. The borrower will need to certify employment during that period.
- Periods of military-related service for certain periods of deferment and forbearance qualify.
- Months spent in deferment before 2013, excluding in-school deferment, qualify.
- Twelve or more months of consecutive forbearance, or 36 or more months of cumulative forbearance, will qualify.
Help Tools
Use the PSLF Help Tool to determine employer qualifications. Log in to Federal Student Aid to verify the type of loan. For additional information, visit the Become a Public Service Loan Forgiveness (PSLF) Help Tool Ninja page.
