PSLF breakdown

Student loans are a popular topic in the news these days. You may read about a few different proposals, but there is nothing definite yet. We want to explain an available program that can forgive all of your student loans if done correctly-Public Service Loan Forgiveness.

Here is the definition by the Department of Education of Public Service Loan Forgiveness.“PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments, under a qualifying repayment plan, while working full-time for a qualifying employer.”

Let’s break down how this works:

PSLF forgives only Direct federal loans. If you have any other type like FFEL, Perkins, etc., they will not be forgiven even if you meet the other requirements. (Parent Plus Loans are eligible as well, but only under a specific repayment plan.). You may also convert your non-qualifying loan into a Direct loan through a federal consolidation. Be sure that is what you need because you can not undo the loan consolidation.

The qualifying repayment plans are Income-Driven payments and 10- year Standard repayment plans. Other repayment plans such as graduated, extended standard, etc., are not eligible even if you meet the other requirements.

You must work full-time for a qualifying employer: Qualifying employment is not related to your job title; it’s about who your employer is. PSLF deems a qualifying employer the following:

Government organizations at any level (U.S. federal, state, local, or tribal)

Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code

Without knowing so, you may be on the right track already. It is a matter of certifying your employer and payments, and you could be closer than you think.

Schedule a consultation with an expert loan counselor with your complimentary consultation and understand your options.