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Do You Qualify for Public Service Loan Forgiveness?

If you’re like most recent college graduates, you’re probably making payments on student loan debt. While resources abound for borrowers who need help repaying their student loans, there’s a special program designed just for people who work in public interest careers. It’s a way to reward people working toward the common good – in jobs that are not necessarily high in income.

The Public Service Loan Forgiveness (PSLF) program, created in 2007, forgives any balances on federal student loans after 120 qualifying payments, or approximately 10 years. While borrowers with small balances will likely pay off their loans in fewer than 10 years, students who took out large loans will likely benefit from this program.

Does my job qualify as public service?

To be eligible for PSLF, you must work full time for public service organizations including the government, military, public schools, public health or another not-for-profit organization, or you must be serving in a full-time position for the Peace Corps or AmeriCorps. If you’re unsure whether your job qualifies, ask your boss or HR manager. The Consumer Financial Protection Bureau also created this toolkit to help you determine your eligibility for PSLF.

What are the criteria for Public Service Loan Forgiveness?

  • PSLF requires 120 separate monthly loan payments after Oct. 1, 2007. Payments made before this date do not count toward PSLF.
  • You must make those payments under a qualifying repayment plan while working full-time at a public service organization.
  • Each payment must be made for the full scheduled installment amount, and must be received no more than 15 days after the payment due date. It is not required that the 120 payments are consecutive.
  • Finally, you must be working for a qualified public service organization when you submit your PSLF application and at the time your remaining loan balance is forgiven.

Which loans are eligible?

In a nutshell, PSLF applies to loans in good standing under the William D. Ford Federal Direct Loan Program, including:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans—for parents and graduate or professional students
  • Direct Consolidation Loans

If you have a Federal Family Education Loan (FFEL) or Federal Perkins Loan, you may consolidate your loans into a Direct Consolidation Loan to be eligible for PSLF.

Which loan repayment plan is right for me?

Income-driven repayment plans are the best bet for borrowers seeking PSLF. The Income-Based Repayment (IBR) and Pay As You Earn (PAYE) programs lower your monthly payment based on your discretionary income. This keeps your payments affordable and helps you meet your obligation to make 120 payments.

How do I monitor my progress toward PSLF?

The Department of Education created the Employment Certification for Public Service Loan Forgiveness form to make it easy for you to track your progress toward your 120 qualifying payments. Simply follow the instructions for completing and submitting the form.

It is recommended that you submit the form annually and any time you switch jobs.

If you need assistance evaluating PSLF, you can contact a student loan counselor at Take Charge America at (877) 784-2008.