Public Service Loan Forgiveness is a federal program that eliminates or forgives federal student loans for specific borrowers. You must be employed full time in an eligible public service or nonprofit job and must have made 120 eligible on-time payments within a 10 year period. Payments do not have to be consecutive – but only eligible payments made during eligible employment count.
An eligible payment is a payment that is made on a loan from the government’s direct loan program. If you have other federal loans, you have to consolidate them into the direct loan program to qualify.
To be eligible for loan forgiveness, the key is “who” you are working for. Any employee who works full time at public or nonprofit institutions can be eligible for forgiveness.
To find out whether your job is eligible, the Consumer Financial Protection Bureau has created a handy guide to help your employer help you. If your human resources team isn’t sure whether your company qualifies, that guide should point them in the right direction.
Eigible employers include AmeriCorps, Peace Corps and many 501(c)(3) nonprofits, including those in the public interest law, health and disability services fields. Labor unions and partisan political organizations are not eligible – even if they are nonprofits. Employees for religious organizations are also ineligible if their job functions include engaging in religious activities related to religious instruction, worship services or any form of proselytizing.
To apply for student loan forgiveness, contact your student loan servicer. Download a PSLF Employment Certification so that you can understand where you are in the process.
You can submit that form to your servicer once a year. If you don’t do this, you will be responsible for producing pay stubs or other proof that you worked at an eligible employer when you officially apply for forgiveness.
In addition to the federal program, multiple federal and state loan forgiveness programs exist.