The Department of Education has released new forms and documentation to assist government backed student loan holders with getting their loans discharged through the Public Service Loan Forgiveness (PSLF) program.
The new documents include updated information on eligible loans:
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:
- Federal Direct Stafford/Ford Loans (Direct Subsidized Loans)
- Federal Direct Unsubsidized Staff ord/Ford Loans (Direct Unsubsidized Loans)
- Federal Direct PLUS Loans (Direct PLUS Loans)—for parents and graduate or professional students
- Federal Direct Consolidation Loans (Direct Consolidation 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.
Information on student loan forgiveness programs not under the Public Service Loan Forgiveness program:
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:
- Federal Family Education Loan (FFEL) Program loans, which include
- Subsidized Stafford Loans
- Unsubsidized Stafford Loans
- Federal PLUS Loans—for parents and graduate or professional students
- Federal Consolidation Loans (excluding joint spousal consolidation loans)
- Federal Perkins Loans
- Certain Health Professions and Nursing Loans
NOTE: To consolidate a Federal Perkins Loan or Health Professions or Nursing 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.
The public service jobs that qualify for this advantageous program are:
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.
- A government organization (including a federal, state, local, or tribal organization, agency, or entity; a public child or family service agency; or a tribal college or university);
- A non-profit, tax-exempt organization under section 501(c)(3) of the Internal Revenue Code (includes most not-forprofit private schools, colleges, and universities);
- A private, non-profi t organization (that is not a labor union or a partisan political organization) that provides one or more of the following public services:
- Emergency management
- Military service
- Public safety
- Law enforcement
- Public interest law services
- Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten)
- Public service for individuals with disabilities and the elderly
- Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
- Public education
- Public library services
- School library or other school-based services
NOTE: Your employment at a non-profit organization does not qualify if your job duties are related to religious instruction, worship services, or any form of proselytizing. – Source
Important Information You Need to Know to Begin the Public Service Loan Forgiveness (PSLF) Program
In order to have the remaining balances on your Direct Loans forgiven under the PSLF program you must:
- You must make 120 on-time, full, scheduled, monthly payments on your Direct Loans. Only payments made after October 1, 2007 qualify.
- You must make those payments under a qualifying repayment plan.
- When you make each of those payments, you must be working full-time at a qualifying public service organization.
You must be employed full time. This means:
You must meet your employer’s definition of full-time. However, for PSLF purposes, that definition must be at least an annual average of 30 hours per week.
If you are a teacher, or other employee of a public service organization, under contract for at least eight out of twelve months, you meet the full-time standard if you work an average of at least 30 hours per week during the contractual period and receive credit by your employer for a full year’s worth of employment.
If you are employed in more than one qualifying part-time job simultaneously, you may meet the full-time employment requirement if you work a combined average of at least 30 hours per week with your employers.
How to Track Your Eligibility
Because it will take at least ten years for you to make the 120 qualifying payments necessary to receive PSLF, we have created a form that you should submit to us and a process that you should follow so that we can assist you in tracking your periods of qualifying employment and your qualifying payments.
The form allows you to get your employer’s certification of employment while you are still employed at that organization or shortly after leaving. The process allows you to receive confirmation of qualifying employment and your Direct Loan payment eligibility. You may also submit the form less frequently than annually to cover more than one year’s employment or for more than one employer.
While use of this form and process is not required, if you want us to keep track of your progress toward meeting the PSLF eligibility requirements, you should follow the steps below. If you do not periodically submit the form, you will still be required to submit a form for each employer that you want considered for PSLF at the time that you apply for forgiveness.
- Complete, with your employer’s certification, the Employment Certification for Public Service Loan Forgiveness form (PSLF Employment Certification) annually or whenever you change jobs. The PSLF Employment Certification form is available here.
- Submit the completed form to FedLoan Servicing, the PSLF servicer, following the instructions on the form.
- FedLoan Servicing will review your PSLF Employment Certification form, ensure that it is complete, and, based on the information provided by your employer, determine whether your employment is qualifying employment for the PSLF Program.
- If the form you submit is incomplete or your employment does not qualify, FedLoan Servicing will notify you and you will have an opportunity to provide additional information.
- If FedLoan Servicing cannot determine whether your employment qualifies, you may be asked to provide additional information or documentation to help establish whether you were employed by a qualifying public service organization. This documentation may include an IRS Form W-2, pay stubs, or other documents from your employer that substantiate your employment at the organization or documentation supporting your employer’s eligibility as a public service organization.
- If your employment qualifies and some or all of your federally held loans are not serviced by FedLoan Servicing, those loans will be transferred to FedLoan Servicing so you will have a single loan servicer for all of your federally held loans. Earlier payments made to other servicers will be evaluated to see if they are qualifying PSLF payments after those loans are transferred.
- FedLoan Servicing will notify you whether your employment qualifies, and, if so, how many payments during the certification period were qualifying payments, the total number of qualifying payments you have made, and how many payments you must still make before you can qualify for PSLF.
How to Get Your Final Loan Forgiveness
After you make your 120th qualifying payment, you will need to submit the PSLF application to receive loan forgiveness. The application is under development and will be available prior to the date when the first borrowers will be eligible for PSLF Program forgiveness, in October 2017. You must be working for a qualified public service organization at the time you submit the application for forgiveness and at the time the remaining balance on your loan is forgiven.
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Wesley asked the following question. I think he got it right. Do the IBR and get the credit towards the PSLF program.
There is nothing saying you can’t still save the difference but I would be shocked if the PSLF program was eliminated.
“I am recent law school grad with no financial sense. I have $125,000 in federal loans, 122,000 of which is at 6.5% interest.
I NEED HELP! I recently got my dream job in a public defender’s office. In addition to being interesting, it comes with a nice salary. 90,000 starting as a matter of fact. I have over $125,000 in education debt, $122K of which is at 6.5% interest. They are all Federal loans.
I am uncertain on how to repay! I am at a point where I can somewhat afford the standard 10 year repayment plan ($1388 a month). The IBR payments is a max of $800 according to online calculators. As you know, 10 years of qualifying payments results in my loans being paid-off (supposedly) in the Public Service Loan Forgiveness Program.
My initial thought is to do IBR/PSLF so the $600 difference in payments could be invested or saved (likely spent). But, I hesitate. Mostly because the PSLF is an executive program and could be undone/changed/augmented. Let’s say I continued with the IBR/PSLF route for 6 years and the new regime changed or deleted the program. I would be left with a loan where the interest swelled and capitalized.
Any thoughts on what I should do?”
let me just say that the student loan help center has been the best program ever. If you are posting a negative article, you really have not done your research about them and you have not talked to them on the phone. THEY ARE THE BEST!!!!!!!!!!!!!!!!
What did they do for you and how much did they charge?