Public Service Loan Forgiveness Program

Woman Thinking Deeply

What’s New for 2015?

Nothing yet, but there is talk of major changes to the Public Service Loan Forgiveness Program, and only some of them sound like they’d make it better.

I’ll start with the positive – Senator Blumenthal’s proposed change to offer PSLF benefits incrementally (meaning that you’d earn a little bit of student loan forgiveness for each year that you have qualifying experience, rather than getting all your forgiveness at once after 10 years) remains on the table, but no real movement has been made to get it passed… yet.

I’m optimistic that it could happen 2015 though, because this year we’ll be facing not only the Reauthorization of the Higher Education Act, but also the 2016 Presidential election. Once the campaigns really get going, I’m expecting to see a lot more noise about student loans (especially from the left side of the aisle).

On the bad side, it looks like the Federal Government might be serious about capping Public Service Loan Forgiveness benefits at $57,000, which would cause major problems for those borrowers with extremely high debt loads (especially Doctors, Lawyers, Dentists, etc.).

Anyone with debt over $57,000 would have to wait longer than 10 years to have it forgiven, plus the amount actually forgiven would be limited to $57,000. That means no more free rides for those entrepreneurial graduates who rack up $100,000+ in student loans, work public sector jobs for 10 years, then write it all off.

I don’t have a crystal ball so I’m not sure what will unfold, but if I had to bet on it I’d place my money on both the incremental forgiveness proposal and the $57,000 cap getting ratified at some point between now and November, 2016.

I’ll keep my ear to the ground and update this page as soon as any new details emerge. Be sure to check back regularly for the latest.

Senator Blumenthal’s Proposed Changes to PSLF

(Updated October 1st, 2014)

I’ve got great news for a major potential change to the way that the Public Service Loan Forgiveness Program works.

On Friday, September 26th, Senator Richard Blumenthal unveiled a legislative proposal to relax PSLF program requirements and start allowing incremental debt forgiveness, rather than the current all-or-nothing approach.

Currently, Public Service Loan Forgiveness benefits cannot be claimed until 10 full years of qualifying payments have been completed (that’s 120 monthly payments), but under Senator Blumenthal’s proposal, this is all set to change.

First, the new proposal would make it possible for for new participants in the PSLF program to place their eligible loans in deferment during the period of time they’re employed in public service work, and secondly, loan forgiveness will be doled out incrementally, with certain percentages of the loan balance forgiven for every two years of public service work completed.

We don’t have all the details yet, but one thing we noticed about this proposal is that it seems to take away the requirement of making a set number of payments to receive loan forgiveness, and focus more on the actual public service work itself as the determining factor.

Under the existing PSLF program rules, you’ve got to hold a job in public service and make enough monthly payments to qualify for forgiveness, but under this new proposal it sounds like you could place your loans in deferment, not even make payments on them, and start receiving forgiveness as long as you’re working in a qualifying public service job.

We could be reading this wrong, and details are relatively scant so far, but we’ll be sure to update as soon as any more information is revealed.

In the meantime, this looks like a major opportunity for anyone interested in pursuing a public service field, as it would essentially make your education entirely free, allowing you to borrow massive loans, then simply write them off.

What Is The Public Service Loan Forgiveness Program?

The Public Service Loan Forgiveness Program (PSLF for short) was created by an act of Congress in 2007, and the good news is that it’s still fully funded for 2014, but the bad news is that it’s changing (for the worse).

This program offers Federal Student Loan Forgiveness for public service work, including forgiveness benefits for jobs as varied as teaching, nursing, working for the peace corps or americorps, or as a Federal or State employee.

The stated purpose of the PSLF program is to “encourage individuals to enter and continue to work full-time in public service jobs”.

(Updated March 27th, 2014)

Obama’s Proposed Changes to the PSLF Program

In March of 2014, the Obama Administration’s Fiscal Year 2015 Budget proposed some significant changes to the Public Service Student Loan Forgiveness Program, most of which severely reduce the value of PSLF benefits.

If Congress adopts the proposed 2015 Fiscal Year Budget without amending it, then student loan forgiveness benefits for public service workers are about to see some dramatic, negative changes.

Here is a summary of how these changes could impact you:

1. High Debt Borrowers Won’t Qualify for Early Forgiveness

The Pay As You Earn Repayment Plan was originally introduced by President Obama’s Student Loan Forgiveness Reforms and offers comprehensive student loan forgiveness for federal loans once borrowers have made 20 years of scheduled, full, on-time payments.

Under the current Public Service Loan Forgiveness Program, that requirement is reduced for public sector employees, who only need to make 10 years of schedule, full, on-time payments before they’re eligible to receive total loan forgiveness.

However, if the proposed 2015 Budget is passed, then PAYE student loan forgiveness and PSLF loan forgiveness won’t be available as early for high debt borrowers (those with over $57,000 in federal student loans).

Instead of receiving forgiveness at the 20 and 10 year marks, these borrowers will have to wait a full 25 years before their loans will be forgiven.

That’s a full 15 years of extra payments that PSLF program participants will need to make, and it’s a major disincentive to participate in this fantastic program.

How are those with excessive student loan debt and a public service salary supposed to purchase a home, buy a new car, get married, or start a family if they’ve got to wait an entire 25 years to discharge their debt?

2. Loan Forgiveness for Public Service Will Be Capped at $57,000

Currently, there is no maximum to the amount of loan forgiveness made available to public service employees.

That means that whether you have $50,000, or $500,000 in student loan debt, you’ll be eligible to receive total loan forgiveness once you’ve satisfied the conditions of the PSLF program.

Unfortunately, this is set to change if the 2015 budget gets approved as-is, because the public loan forgiveness program will only offer up to $57,000 in total forgiveness benefits.

Yes, $57,000 does sound like a lot of money, but for those students who racked up $100,000, $150,000, or even $200,000+ in student loan debt, this change is going to devastate their financial futures.

And while $100,000+ in student loans might sound like an unreasonable amount of debt, it’s fairly easy to rack that much up by attending medical school, dental school or law school nowadays.

3. Only Payments Made Under Income-Based Plans Will Count Toward PSLF Forgiveness

The current public student loan forgiveness program allows payments under any of the seven Federal Student Loan Repayment Plans to count toward the 10 years of required payments, but that too is set to change should the new budget be implemented without modification.

Instead of any payment counting toward the 10 year minimum, only those payments made under income-based repayment plans will be included in the calculation.

Sure, that’s not that big of a deal for some people, as many are already on one of the available income-based plans, but for others this change could hit especially hard.

At the very least, it’s an annoyance that you’ll need to switch from the Standard Repayment Plan to one of the income-based plans.

Should this change go into effect, those seeking PSLF forgiveness will have to be enrolled in one of the following federal student loan repayment plans:

4. Married Borrowers Won’t Be Able to Separate Income

This change will affect everyone who’s married and working toward public service loan forgiveness, since by default, all of you will be forced to be enrolled in one of the income-based plans listed above.

Under current law, married borrowers can reduce their monthly student loan payments by filing taxes as maried filing separately, since that allows them to exclude their spouse’s income from the calculations that determine their monthly payments.

However, should the new budget be approved, this practice will be outlawed.

Sure, the change won’t affect everybody, but it’s guaranteed to have a devastating impact on a small slice of the population who don’t deserve to be singled out.

Those borrowers married to high-income earners, especially high-income earners who helped support them during extensive schooling (like med school, dental school or law school), are going to get crushed by this change.

Instead of being able to calculate their monthly payments on the meager public-service salary of someone who’s just entered the field, they’ll have to include their spouse’s income as well, which could be extremely high.

We anticipate that this will cause monthly payments to double, triple, quadruple, or worse, and we anticipate seeing a massive spike in the divorce rate once couples catch on to the fact that it’s fiscally irresponsible to remain married.

(Previous Content)

President Obama’s Previous Reforms

The original public service loan forgiveness regulations provided borrowers the opportunity to qualify for complete loan forgiveness on the remaining balance of their eligible federal student loans, once they’ve made 240 payments (20 years worth of payments) on their student loans via qualified repayment plans, while also being employed full time by specific public service employers.

The recent creation of President Obama’s Student Loan Forgiveness Program has reduced the number of repayments from 240 (20 years) to just 120 (10 years), making the program significantly more attractive to those who aren’t quite as interested in public service work.

The PSLF Program is not without controversy, as some have argued that it’s rules are too stringent, leaving many students in the dust, while others like Diane Auer Jones, assistant secretary for postsecondary education stated that the entire PSLF program is virtually worthless, saying:

“You have to make 10 years of payments before the remainder of the loan is forgiven…. and most federal education loans are 10-year loans, which means there will be nothing left to be forgiven.”

Whether or not the PSLF Program will help you, it’s first necessary to determine if you’re even eligible for this benefit at all.

And since it’s not necessarily all that easy to understand in paragraph form, here’s a bullet point list showing exactly what you have to do to qualify for having your remaining student loan debt forgiven under this program.

Eligibility Guidelines for the PSLF Program

  • You must have an outstanding balance on a Federal Student Loan that you received under the William D. Ford Federal Direct Loan (Direct Loan) Program
  • You must make 120 on-time, full, scheduled monthly payments on your Direct Loan, including only payments that were made after October 1st, 2007 (meaning that the earliest you can possibly have all of your debt forgiven under this program is October 1st, 2017, so there is no way for you to qualify for this entirely yet)
  • You must make your 120 payments under a qualifying repayment plan (see below for qualifying repayment plans)
  • While making each of these 120 payments, you must be working full-time at a qualifying public service organization (see below for qualifying public service organizations)

To summarize – the Public Service Loan Forgiveness Program is extremely helpful, but not quite yet.

Since you have to make 120 loan repayments after the date of October 1st, 2007, there’s no way that you could possibly have all of your loans forgiven yet under this plan, and that won’t be available until 2017.

If you need immediate student loan forgiveness, then this plan won’t help you, but if you’re working at a qualifying public sector job (or planning on doing so), then you should definitely do your best to conform to the eligibility guidelines below so that you can utilize this incredible benefit once you’re fully qualified to do so.

Which Student Loans are Eligible for PSLF?

While it may seem unfair, not all Federal Student Loans qualify for PSLF forgiveness. In fact, some of the most popular forms of loans will disqualify you from eligibility for this benefit.

Only loans that have been awarded under the William D. Ford Federal Direct Loan Program are eligible for PSLF.

If you received loans under the Federal Family Education Loan (FFEL) Program, the Stafford Loan Program, the Perkins Loan Program, the Grad Plus Loans Program, or any other Federal loan program, then you do not qualify for Public Service Loan Forgiveness benefits.

If you do happen to have FFEL loans or Perkins Loans, and want to take advantage of the PSLF plan, then you will first have to consolidate your loans into a Direct Consolidation Loan.

Keep in mind though that only payments you have made on the new Direct Consolidation Loan will count toward your 120-month (10 year) payment requirement for PSLF eligibility.

Any payments you might have previously made on your FFEL or Perkins loans will not count toward this requirement, even if they were made after October 1st, 2007, under a qualifying repayment plan and while you were working full time at a qualifying public sector employer.

To find out about how to consolidate your FFEL or Perkins loan into a Direct Consolidation Loan, check out (note: this is a Government site so you can trust it).

If you don’t know what type of loan you have, then visit to find out.

Which Payments Count?

Three different factors go into determining whether or not your student loan repayments qualify as one of the 120 required to receive complete PSLF forgiveness. They are:

  1. Payments Must Be Made On Time – Any payment received by whoever services your Direct Loan no later than 15 days from the scheduled payment due date counts as an “On-Time payment”.
  2. Payments Must Be Made In Full – Any payments make on your Direct Loan that equal or exceeds the amount you are required to pay each month according to your Direct Loan repayment schedule count as “Full Payments”. If you made, or make a payment that is less than the amount set in your repayment schedule, then those payments will not count toward your required 120 payments. However, if you make multiple payments per month equaling or exceeding the required full monthly payment amount, then you will get credit for a single Full Payment. You cannot game the system by making many payments each month though, as the maximum number of credits that you can receive in a 30 day period is 1.
  3. Payments Must be Scheduled – Any payments that you make on your Direct Loan which is made under a qualifying repayment plan after your loan servicer has billed you for the month’s payment will count as “Scheduled Payments”. Any payments made while your loans are in the in-school status, or during a grace period status, or under deferment or a forbearance period will not count as Scheduled Payments.

*NOTE:  Qualifying payments must also be made as separate monthly payments. You cannot game the system by making lump sum payments, or payments for future months that you have not yet been billed for, as these will not count as qualifying payments toward your 120 payment requirement.

However, if you are employed with AmeriCorps or the Peace Corps, you may fall under special rules allowing for lump sum payments. Contact your employer for additional details.

Keep in mind that only payments which were made while you were a full-time employee at a qualifying public service organization will count toward your required 120 qualifying monthly payments.

You also need to be a full-time employee of a qualifying public service organization both at the time that you apply for PSLF benefits, and when your student loan forgiveness is actually granted.

What Repayment Plans are Eligible?

The two best repayment plans for PSLF benefits are the Income-Based Repayment Plan (IBR) and the Income-Contingent Repayment Plan (ICR). Using either of these two repayment plans will be your best bet for maximizing your PSLF benefits.

The 10-Year Standard Repayment Plan is also PSLF-qualifying, as are any other repayment plans where you make a monthly payment that would be as much, or higher than the amount you would be paying under the 10-year Standard Repayment Plan.

Keep in mind that your repayment plan could actually completely invalidate the PSLF benefit, as, for example, if you decided to use the 10-Year Standard Repayment Plan throughout the entire course of your loan, never missing a payment of paying less than the scheduled amount, then you wouldn’t have any student loan debt to forgive anyway, so the PSLF benefit would be worthless to you.

Using the IBR or ICR repayment plans, you will make a lower monthly payment, which allows you to stretch payments out for an extended period of time (more than 10 years), and will cost you more interest in the long-run, but allow you to take advantage of the PSLF benefits once you’ve satisfied all the eligibility criteria.

However, if you failed to meet the eligibility criteria for any reason (for example leaving public sector employment), then using the IBR or ICR plans would backfire, leaving you with substantially higher debt levels than  you would have had using the 10-Year Standard Plan.

If you are not absolutely certain that you want to remain employed at a qualified public sector position for the duration of your eligibility period for PSLF, then you should not rely on PSLF benefits, as they are likely to provide you nothing of value.

What Kinds of Jobs Qualify for PSLF?

Employment with a federal, state or local government agency, entity or organization counts as qualified employment for PSLF.

Additionally, any federal, state or local non-profit organization designated as tax-exempt by the IRS under Section 501(c)(3) of the tax code counts as qualified employment too.

Some private non-profits that are not qualified tax-empty organizations under 501(c)(3) may also count as qualifying public service organization, if they provide certain specific public services.

Eligible public services include: military service, emergency management, public safety or law enforcement, public health services, public education or public library services, school library or other school-based services, public interest law services, early childhood education, public service for individuals with disabilities and public service for the elderly.

One stipulation to qualification is that labor unions and partisan political organizations do not, under any circumstances count as qualified employers.

What Counts as Full-Time Employment?

First, your position must meet your employers definition of full-time employment.

Even if you work more than 40 hours a week, if your employer somehow does not define your role as a full-time employee for their tax liabilities, then your position will not allow you PSLF eligibility.

Additionally, your position must meet the following criteria:

  • Your position must be at least 30 hours per week when averaged annually
  • Your 30 hours per week cannot include any time spent participating in religious instruction, worship services, or any form of proselytizing

Teachers and employees of public service organizations with contracts for at least eight months per year must also meet full-time standards if they work an average of at least 30 hours per week during the contractual period, and must receive credit from their employers for a full year’s worth of employment.

Also, If you work at more than one qualified part-time job simultaneously, you are allowed to meet the full-time employment eligibility requirement if you work a combined average of 30 or more hours per week at your positions with eligible employers.

Typically, your actual work duties and the type or nature of your employment with your employer is irrelevant to PSLF eligbility, unless you work for a not-for-profit organization that has something to do with religion.

In that case, when determining full-time work, you may not include any time that was spent participating in religious instruction, worship services or any form of proselytizing (as mentioned above).

How Can I Track My Progress?

To keep track of your eligibility for PSLF forgiveness, the Government provides a form called the Employment Certification for Public Service Loan Forgiveness (which you can find here) that you should download, print, fill out and submit to track your progress for completing PSLF requirements.

The ECPSLF form will guide you through the process of collecting required employer’s certification of employment, and submitting the form will provide you with confirmation of qualifying employment and eligibility for your Direct Loan payments.

This form should be submitted annually, though it could be submitted less frequently as long as you’re able to provide all the necessary data for the time period covered, and it will essentially prevent you from discovering any problems along the way, or from straying from the path of eligibility from the Public Service Loan Forgiveness Program.

You are not required to use this form, but it should help you to remain organized, understand how much of the eligibility you have completed, and how much you have left to complete, and keep you on track for receiving total loan forgiveness once you’ve finished PSLF requirements.

If you do choose not to submit the form along the way, you will still need to submit a separate form for each employer at the time that you request final clearance for PSLF benefits, so you might as well be using it throughout the process when it’s easier to collect the required information.

Seven Steps to Receiving Forgiveness:

  1. Complete the Employment Certification for Public Service Loan Forgiveness form each year, or whenever you change jobs, providing the Government with your employer’s certification credentials.
  2. Submit the completed form to FedLoan Servicing, who services all PSLF loans, following the instructions found on the form itself (which you can read here).
  3. FedLoan Servicing will review the form you submitted, make sure it’s completely filled out properly, then determine whether or not your employment qualifies you for PSLF benefits.
  4. If the form wasn’t filled out properly or if you do not qualify for the PSLF Program, FedLoan Servicing will let you know and provide you with another opportunity to give them the correct information.
  5. If FedLoan Servicing can’t tell whether or not you qualify for the PSLF Program, they might request more documents from you to prove that you have been or are employed by a qualifying public service organization. You may be asked for IRS forms (W-2’s), pay stubs, or any other documents to prove your employment at the business you’ve listed, or to prove that your employer is in fact a qualified public service organization.
  6. If your employment does qualify you for the PSLF Program, but some or all of your federally held loans are not currently being serviced by FedLoan Servicing, then those loans will be automatically transferred to them so that you have a single servicer for all of your federal student loans. Once your loans have been transferred to FedLoan Servicing, all payments you made to different servicers in the past will be reviewed to see if they qualify as counting toward PSLF payments.
  7. FedLoan Servicing will let you know if your employment qualifies for the PSLF Program, and will let you know how many payments you have made that count as qualifying payments. You will know exactly how many qualified payments you still have to make before you are eligible for complete loan forgiveness under PSLF benefits.

What To Do Once You Qualify for Forgiveness

After you’ve completed the entire process and made your 120th qualifying payment, you should immediately submit the PSLF application to request loan forgiveness.

The application does not yet exist (since no one can possibly qualify until 2017 anyway), but the Government has promised that it will be ready well in advance of the first day that qualification is possible.

Remember that you will need to be working for a qualified public service organization when you submit your final request, and that you will have had to be working for a qualifying organization, in a qualified position, and have made 120 qualified payments before you can even consider submitting this request.

Finally, you will need to remain working for a qualified organization when they receive your request, and offer you complete forgiveness.

Do not think that simply submitting your application will mean that you can now change jobs, leaving the public service space, and still receive your loan forgiveness – this program has not been set up to work that way.

Other Resources

For additional information about PSLF benefits, please visit the resources listed below:

View the PSLF Fact Sheet here.

View the PSLF Question & Answer Page here.

Please Help Me Out

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When my site gets posted to Facebook, Twitter, Google+ or Blog sites, more people find out about these important benefits programs, increasing the chances that they will be used, and remain in existence.

Thank you for your support, and please come back soon!


Tim's experience battling crushing student loan debt led him to create the website Forget Student Loan Debt, where he offers advice on dealing with excessive student loans and advocates a cautious approach to funding education costs via borrowed money.

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  1. I’ve been scammed by Direct Loans. Been paying under public service plan for almost two years. Today I find out only 8 payments qualify so far. Somehow multiple payments are showing up as PENNIES short of the payment due and therefore not counting as a qualifying payment. Why would I make a payment 9 cents short of what was due?? More than once?? Be warned!!! I’m livid!!

  2. Thank you for your helpful and thorough information. It is difficult to sift through the truth and lies that are out there on the internet. Your site is great!!

  3. Great site. I’m in the healthcare field and I understand why this program is being reformed. Unfortunately PSLF is being abused by many doctors:

    They take out significant loans for Medical school. Let’s say 200k. Then they do their residency for 3-6 years, then fellowship for 2-4 years. During residency and fellowship they make 40k-60k, so their payments are very low during these ten years. After the ten years, they start making the big bucks (200k+), and there loans are forgiven!

    While it’s all within the rules, this wasn’t how the loan forgiveness was meant to be used.

    • Hi Derrick,

      I’m in agreement with you that a lot of people are taking advantage of the way this program works, but some proposed updates to Federal loan forgiveness are about to close the loopholes being exploited by the people you mentioned.

      If everything goes according to the latest proposal from President Obama, loan forgiveness will be capped at $57,000, so people with $100,000 or $200,000 in debt won’t be able to simply write it all off just before they start pulling in big money.

      This is going to screw things up for a lot of future Doctors, Dentists, etc., but it’s a better deal for most tax payers (basically everyone who isn’t having their massive loans forgiven).

      Thanks for stopping by and commenting!

  4. There are bound to be many changes to this program throughout the years, especially leading up to 2017. I am just curious if any one knows if one were to enroll in the program, would they be grandfathered into the rules which were in place at the time of enrollment? For example, if a person enrolled before the 2015 budget changes, would they still get all of their loans forgiven no matter what the amount, or would the $57,000 cap apply to them also? Without some sort of grandfather clause, the whole PSLF program could be very dubious. Imagine working at a lower paying PS job for 9 years, all the while gaining debt due to interest and low payments, believing that you are going to be fine at year 10. Then all of a sudden, there is another change to the program which somehow disqualifies you. There you are left without forgiveness and more debt than you would have had if you had worked at a higher paying job. See the quandary here? Thank you, Tim for this article.

    • Hi Sara,

      It’s hard to predict what will happen to this program as things continue to evolve, but there’s a good chance that grandfathering will apply.

      My take is that whatever rules were in place at the time you officially got onto PAYE, those rules will continue to apply to you no matter how things change down the line.

      It’s a scary situation, to be sure, but in this instance I think we can count on grandfathering to protect us from any future reduction or cancellation of benefits.

      • Kevin Walsh says:

        First of all I would like to thank you Tim for your time and effort in creating this very detailed article. I also would like to thank you Sara for asking your question. The issue with changes to the program being made to the program is my number one concern with the program. I have been approved as of January 2015 as I have consolidated my loans of $30,000 for my education. I feel as if I will always be worried over the viability of this program for years to come. If any information becomes available about “grandfathering” in of the PSLF program I would love to hear more. Is there any way this program would completely fall apart? I certainly hope not. Good luck to everyone out there. Thanks Tim, Sara, and everyone else who contributed questions, concerns, and feedback.

        • Hi Kevin,

          Thanks for the kind words. So far there is nothing yet about “grandfathering” benefits of the PSLF program, but I honestly don’t see any reason why the Federal Government would decrease benefits for those already enrolled.

          If they do end up cutting benefits, I think they’ll have to pick an arbitrary starting point some time in the near (or perhaps distant) future, and allow everyone who’s already taken out loans to enjoy the previously more lucrative promise.

          It would be a travesty for them to do something like that, and I just can’t believe that even Politicians would slash the program for people who’ve made decisions based on what they knew would be available.

          I’m watching the situation closely and will continue to provide updates whenever more information is released.

          Thank you for stopping by!

          • Candice Gayle says:

            I am very concerned about this idea of so many negative changes happening to this program. I would be very negatively affected unless I am grandfathered in (I really hope that happens). I understand why so many changes may need to be made, which is namely because of people taking advantage of this potentially amazing program. If there a place I can go to support this program? Is there some sort of petition that has been made to help keep the program mostly how it is now?

          • Hi Candice,

            I share your concern, as do many other Americans who RELY on PSLF benefits to survive financially, but I’m not aware of any existing petitions to preserve the current rules.

            I believe that we’ll all get a fair deal when all is said and done, and I’m nearly certain (based on what I’ve heard from experts in the field) that any changes to Public Service Loan Forgiveness will be pushed out to some future date, allowing people already in school or already in the program to continue taking full advantage of its benefits.

  5. Ricci Robson says:

    Hi, I have already tried application for SLF, and despite perfect re-payments many years and over 10 years in the public sector, my application was refused, why?? I am re-submitting. Any suggestions welcome!!

  6. Hi Derrick,

    When will we find out whether the $57,500 cap is approved or not? The bare minimum I’d need to take out for my grad school program is $60,000, but with living expenses and what not it’s closer to 100,000. I’d like to start school next year, but if I take out $50,000 my first year and then find out I’ve almost met my limit, I’m screwed! I guess since I wont have started PAYE or Pub Service payments until 2017 there’s no “grandfathering” if this decision is passed within the next year.

    This is so overwhelming :(

    • Hi Lucy,

      You’re in a tough spot – I agree, but there’s no way to know when the final verdict will emerge on the $57,000 cap. This is all still very much “in the works”, and unfortunately, when it comes to politically-charged issues like these, things tend to move very slowly.

      It’s POSSIBLE that everyone with student loans before the new rule goes live will be grandfathered in – I don’t think you’d have to be enrolled in PAYE to be counted before the changes go live, but again, this is a major risk.

      Sorry that I can’t provide you with a clearer answer =(

  7. John Pedigo says:

    As someone who has been in public service and paying my student loans faithfully since 2007, this whole program is pointless for me. I have a family of four and make *just* enough that even the IBR plan would constitute a higher payment than my current consolidated payment by about $150 a month. I had no idea about filing taxes separately from my wife, but that would be too complicated given our situation and just doesn’t seem above board. Oh, well. Hands – meet boot straps. My debt. My problem.

  8. Elisabeth says:

    I have a scenario that I would like your insight on. Borrowers can be enrolled in IBR or ICR plans and take advantage of PSLF by paying relatively low payments on their student loans. Under the IBR plan it is possible based on a low annual income that calculated payments can be $0 and this qualifies as a “qualified payment”. My question is, based on income, would $0 “payments” under the IBR plan be counted as eligible payments for the PLSF? PLSF payments must be qualified payments according to your payment plan and in some cases a $0 monthly payment is a qualified payment for low income earners under the IBR.

    Any input you have is valued. I was running this scenario through my head and cannot figure out if it is viable. Also, after I graduate my monthly payment under IBR or ICR should be considerably low since the previous year (2014) I didn’t earn much income. If I fall under this $0 category I’m not sure if I should pay extra or not.

    • Hi Elisabeth,

      The good news is that, yes, the $0 payment does count as a “qualified payment” for the PSLF program.

      The important thing to keep in mind is that eventually you will have to pay taxes on whatever amount of debt gets forgiven, so if you aren’t at least making interest payments, that could end up costing you more than it saves in the long-run.

      Plan carefully, make your interest payments, put aside some money along the way, and when your PSLF forgiveness kicks in, you’ll definitely be a happy camper!

      • My understanding is that you don’t have to pay taxes on PSLF plans?

        • Hi Kathryn,

          I’m not entirely sure what you’re referring to – PSLF Plans? Are you thinking of Student Loan Repayment Plans?

          Or are you asking about not paying taxes on the balance of the loan forgiven once you’ve satisfied the conditions of the Public Service Loan Forgiveness Program and had your debt cancelled?

  9. Curiosity question. I was a seasonal full time IRS employee 2004-2007 and again in 2009. I was paying on my loans during that time. I then went back to school full time in 2010 to become a RN BSN at which point I went in to deferment. After graduating in Dec 2012, I started repaying in July 2013. In Jan 2014, I started a masters (nurse practitioner) full time while also working full time at a 501(c)(3) facility. I’m back in deferment…again. Would any of the payments made during my stint at the IRS count? How do I tally the payments made when I started at the 501(c)(3)? Thanks for your help!

    • Hi Lynne,

      Did you read the entire page? Check out the section called “Eligibility Guidelines for the PSLF Program” for a detailed answer to your questions.

      Loan payments from before October 1st, 2007 don’t count toward your required 120 payments, and neither do any payments made on a repayment plan that isn’t eligible for PSLF.

  10. Hi Tim,

    I’ve been working for 10 yrs as a full-time RN for Kaiser. I have Navient, and I think I only qualified for the Private Loan at that time, I didn’t qualify for the Perkins Loan. Am I eligible for this loan forgiveness program? I’ve been making payment since 2005. Thanks.

    • Hi Donna,

      If your loans are private, then you won’t qualify for the Public Service Loan Forgiveness Program. It’s only for Federal student loans.

      For options on private student loan debt, see here.

  11. This is very unfortunately that they have no program to help forgive the debt of military spouses. Before I hear “You’re just a spouse, you don’t wear a uniform” and other negative comments, I will say the following:

    1.) Since we are married, our money and our debt is combined.

    2.) I was in school right before and after we got married. Spent $86,000 for a law degree. I graduated in 2007, passed the bar exam, and the economy plummeted. Our original plan was for him to get out of service after he completed 4 years, and I would work. I could not find a job in the horrible economy, and we received orders to Germany so I was unable to work there as an attorney. He decided to re-enlist and now that will be his career. Since returning to the US 3 years ago, we have lived in 3 states. It will be 4 states starting this June. So that’s moving on average of every year–not long enough for me to even apply for and take a bar exam in our new state. But while we were in Germany, he was an E5 making $2330 base pay and I had a $1200 student loan monthly payment.

    3.) All of my debt accrued BEFORE the GI Bill was expanded to allow transferability to spouse, which we definitely would have waited on my going to school if we had known that such a benefit was going to be passed by Congress. I believe this bill was passed in 2008. I’m starting to just believe I’m unlucky…

    4.) When we were in Germany, after 8 months of job searching, I did land a very low grade federal job. I looked into student loan forgiveness at the time, and since I knew there was no way I would be able to complete 10 years guaranteed of public service/having a govt job due to all the upcoming moves, I did not even apply.

    5.) He is currently deployed overseas and I have two very young children, so working right now would be cost-prohibitive. We still have thousands and thousands in student loans.

  12. It’s not clear if there’s any loan forgiveness available for military reservists. What’s available for reservists?

  13. Kathleen says:

    If anyone has any advice as to if anyone can help or who to contact, please advise.

    All of my loans originated after the 2007 date so I was fine. I had loans of rough 70k.
    I was eligible for $17500 student loan forgiveness under the Teacher Loan Forgiveness Program. I called 3 times to ensure that submitting the reimbursement would not affect or start over the 10 year period for Public Service Student Loan Forgiveness. I submitted the form and wonderfully the $17500 was forgiven.
    Unfortunately it turned out I was given wrong info
    Because my account was sold and immediately after, the new company told me that the previous loan company gave me wrong info and that the 10 years does in fact start over.

    Is there any way to undo this? The new company says they can’t help me because (understandably) they aren’t Mohela.

    Also, it’s not like I’m financially benefitting. The 17500 did not and will not reduce my payments because I am on income based. So all it does is reduce the total that will eventually be forgiven and it started my 10 years all over. What’s worse is my income will obviously be much higher these next 10
    Years and I’ll be paying for 15. Lastly, the end result of whether this can be fixed or not
    is an actual consideration into whether or not I get married. I was hoping to take one year off if and when we Have a child but won’t be able to afford it if the payment is based off both of our income and for another 10 years.

    Basically, since I was given wrong info, I would like them to rebill me the 17500 and any interest I owe and have the payments I’ve made this far count instead of starting over.

    I can’t believe that receiving the 17500 credit to my account had turned out to be the worst financial mistake ever and all because some reps gave me wrong info.

    Any suggestions, advice, or even who I could/ should comtact for help would me appreciated.


    • Hi Kathleen

      I would recommend that you contact the Student Loan Ombudsman Group IMMEDIATELY!

      You need to have them investigate this and make sure that you aren’t being screwed.

      You can reach them at 1-877-557-2575. Call them today and get this sorted out.

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