Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program was established by the College Cost Reduction and Access Act of 2007. Under this program, borrowers may qualify for forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying payments on those loans while employed full-time by certain public service employers. This program was established to encourage individuals to enter and continue to work full-time in public service jobs.
To qualify for PSLF, borrowers must meet the following criteria:
- Be employed full-time by a federal, state, local or governmental agency, or a non-profit, tax-exempt organization under section 501(c) (3) of the Internal Revenue code, or for a private not-for-profit employer that provides certain specified public services.
- More detailed information regarding qualifying employment can be found here.
- Must not be in default on the loans to be forgiven.
- All loans must be under the Direct Loan Program. If the individual has loans under the Federal Family Education Loan Program, the individual must consolidate those loans into a Direct Consolidation Loan for those loans to be eligible for forgiveness.
- Make 120 on-time, full, scheduled, monthly loan payments under one of the eligible repayment plans listed below. Only payments made after October 1, 2007 qualify.
- 10-year Standard Repayment Plan
- Income-Based Repayment Plan (IBR)
- Pay As You Earn (PAYE)
- Income Contingent Repayment Plan (ICR)
- Payments under the 10-Year Standard Repayment plan and any other Direct Loan Program repayment plan where payments are at least equal to the monthly payment amount that would have been required under the 10-Year Standard Repayment Plan are also considered eligible payments for PSLF, however not typical payments for borrowers just beginning to repay.
Additional information on Public Service Loan Forgiveness can be found by visiting FedLoan Servicing or Federal Student Aid.