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Will I Be Grandfathered Into the Public Service Loan Forgiveness Program?

Written by Steve Rhode


Dear Steve,

I am curious about the federal loan forgiveness programs that I have heard about but I am somewhat confused. I am in the last year of finishing up my Educational Doctorate and have of course accumulated some significant debt. I have been (and will continue to be for the foreseeable future) an educator at an impoverished urban school. How does the debt forgiveness program work? Is it really in jeopardy with the new tax reform plans? Will there be a “grandfathering” clause? Can I include my parental loans for my children?


Randy in Cincinnati


Dear Randy,

It sounds like you are talking about the Public Service Loan Forgiveness (PSLF) program.

The PSLF program would still be available for loans before June 30, 2018 if the nuking of the program survives in the tax bill in Congress right now.

But PSLF is under tremendous attack by the current Trump administration. What you will need to watch is what will happen to the when the very first wave of people who just became eligible for forgiveness in the program actually get their loans forgiven.

The Department of Education has been fighting strongly that the servicer they appointed to verify if employment counts towards forgiveness can’t be relied on for the right answers to consumers. They’ve said only the Department of Education can make a final determination on forgiveness once you’ve made 120 payments and you will have to remain in that job until your application for forgiveness is fully processed.

Basically, a lot of road blocks are being hurled in the way of forgiveness. But I invite you to read the latest issues about the PSLF program by clicking here.

You can find the official information on the PSLF program online here.

Frankly you are in a no-win position. If you make your regular payments the loans would be paid off in 10 years anyway. So the logical thing to do is consolidate all the loans into a new Direct Loan and then opt for an income driven repayment plan to give you the lowest payment till forgiveness.

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But those reduced payment plans can drop a big wad of interest onto what you already owe if you miss your annual recertification anniversary.

And yes, if you consolidated your Parent Plus loans and elected an Income Contingent Repayment option then those loan could be forgiven as well.

So the best I can definitively tell you is the program exists today, it is uncertain how tough it will be to actually get forgiveness after 120 conforming payments, and the process for final approval is unproven at this point.

I wish I could be more definitive but change with the Department of Education is the only thing that’s consistent at the moment.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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