How to Use PSLF to Get Rid of Your Federal Student Debt
In 2019, The Public Service Loan Forgiveness Program (PSLF for short) remains the single best and most powerful Federal Student Loan Forgiveness Program on offer, but unfortunately, President Trump’s proposed 2020 budget unveiled on March 11th, 2019 may change all that…
I’ll go through the details of PSLF, including how it works and why you should try to get enrolled in the program immediately, before it’s shut down, but before we get into that, please sign my Petition to SAVE PSLF from President Trump’s Proposed 2020 Budget Cuts!
Why is PSLF so important? Because the Public Service Loan Forgiveness Program offers complete federal loan forgiveness benefits in return for qualifying public service work, meaning that it allows you to wipe out your Federal student debt in exchange for working in a public service field (like teaching, nursing, Government positions, etc.) for a period of 10 years.
PSLF is the gold-standard for Student Loan Forgiveness, as it’s the fastest and cheapest way to get rid of your loans without paying for them.
How Does PSLF Work?
The Public Service Loan Forgiveness Program is simple: if you agree to work in a qualifying job and make all of your student loan payments in full and on time for a period of 10 years, then the Federal Government will write off your remaining Federal student loans.
The best thing about the PSLF program is that it allows you to get rid of your student loan debt without paying for them.
The second best thing about PSLF is that it’s relatively easy to qualify for the benefit because it hinges on your employment status, and MANY different types of jobs qualify for the program.
Below, I’ll detail all the eligibility conditions, then talk about the way the qualifications process works.
If you have questions about anything related to PSLF, please read this entire post, then if they still aren’t answered, feel free to ask away in the Comments section at the bottom of this page and I’ll get you a response as quickly as possible.
Get Help With Your Loans!If you're truly struggling with student loan debt, then you should consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.
For help with Federal Student Loans call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.
For help with Private Student Loans call McCarthy Law PLC at 1-877-317-0455. McCarthy Law will negotiate with your lender to settle your private loans for much less than you currently owe (typically 40%), then get you a new loan for the lower, settled amount so you can pay off the old loan, repair your credit and reduce your monthly payments.
I've spent 10 years interviewing debt relief agencies, talking to all sorts of "experts", and these are the only two companies that I trust to help my readers. If you have a bad experience with either of them, please make sure to come back and let me know about it in the Comments!
Eligibility Guidelines for PSLF
To qualify for PSLF, 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
- Make 120 on-time, full and scheduled monthly payments on your Direct Loan, limited to payments that were made after October 1st, 2007
- Make your 120 payments under a qualifying repayment plan (one of the Income-Based Repayment Plans, outlined in detail below)
- While making each of these 120 payments, you must be working full-time at a qualifying public service organization (see below for details)
The biggest requirement for PSLF are that you work a job that qualifies as public service – a role working for the Government at any level, Federal, State or Local, with a 501(c)(3) Nonprofit Organization, or in any other role that counts as “Public Service”.
Once you’ve ensured that your job qualifies, all you need to do is make sure that you’re enrolled in one of the Income-Based Federal Student Loan Repayment Plans, including the Pay As You Earn Plan, the Revised Pay As You Earn Plan, the Income-Based Repayment Plan or the Income-Contingent Repayment Plan.
Assuming you have taken care of these two requirements and you make your 120 scheduled, on-time payments, you will have earned complete forgiveness for whatever amount of money is still owed on your loan!
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 will not qualify for Public Service Loan Forgiveness benefits.
However, if you do happen to have FFEL loans or Perkins Loans and you do want to take advantage of the PSLF plan, then you MAY be eligible if you first turn those loans into a Federal Direct Consolidation Loan.
Keep in mind though that only the payments you have made on the new Direct Consolidation Loan will count toward your 120-month (10 year) payment requirement for PSLF eligibility.
To find out about how to consolidate your FFEL or Perkins loan into a Direct Consolidation Loan, check out my “>Guide on Federal Direct Consolidation Loans.
If you don’t know what type of loan you have, then visit www.nslds.ed.gov to find out (this is a Government-backed website, so you can trust it!).
Which Payments Count Toward the 120 Payment Threshold?
Three different factors go into determining whether or not each of your monthly payments will qualify as one of the 120 required to receive complete PSLF forgiveness. They are:
- 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”.
- 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.
- 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?
Only the Federal Income-Based Repayment Plans are eligible for PSLF, meaning that if you’re not making payments under one of those plans, your payments won’t count toward the 120 payment threshold.
The two best, most easily accessible Income-Based repayment plans for PSLF benefits are the Pay As You Earn Repayment Plan, and the REPAYE Repayment Plan.
Also, you should keep in mind that your repayment process could actually completely invalidate the PSLF benefit, as, for example, if you decided to use the Income-Based Repayment Plan throughout the entire course of your loan, never missing a payment, and paying MORE THAN REQUIRED sometimes, then you may end up paying off the entire balance of your loan, leaving nothing to be forgiven at the 120 payment threshold.
You need to pay close attention to how much you’re paying each month, how much will actually be left after you’ve made 120 payments, and determine whether or not PSLF is actually going to end up saving you money in the long-run.
Also, if you are not absolutely certain that you want to remain employed at a qualified public sector position for the 10 year duration required to qualify for the benefit, then you should avoid counting on PSLF at all, because leaving a qualifying position will mean sacrificing access to the benefit.
Note that you can hop in and out of qualifying positions over time, and that the requirement for qualifying payments doesn’t have to be consecutive. As an example, you could make 50 qualifying payments, leave a qualifying position and make 50 non-qualifying payments then come back into a qualifying position and make the final 70 qualifying payments to hit your 120 payment threshold.
You really don’t want to do that though, as the way to maximize your return with PSLF is ensuring that the next 120 payments you make are ALL qualifying payments. That will give you maximum bang for your buck!
What Kinds of Jobs Qualify for PSLF?
The easiest way to qualify for PSLF is to work for the Government, at any level, including Federal, State or Local Government Agencies, Organizations and Institutions, as ALL Government Workers have access to PSLF.
For full details on utilizing PSLF as a Government Employee, visit my Guide to the Federal, State & Local Government Employee Student Loan Forgiveness Program.
The second simple option for qualifying for PSLF is to get a job with any non-profit organization designated as tax-exempt by the IRS under Section 501(c)(3) of the tax code counts as qualified employment too.
For full details on utilizing PSLF as a 501(c)(3) Employee, visit my Guide to the Non-Profit Worker Student Loan Forgiveness Program.
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 Simple Steps to Receiving PSLF Forgiveness:
- 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.
- 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).
- 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.
- 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.
- 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.
- 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.
- 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.
You can find the PSLF Application right here.
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 the Federal Government receives your request, or they won’t offer you complete loan 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!
PSLF Benefits & Taxable Income
One of the biggest benefits to participating in the PSLF program is that it’s one of the only forgiveness benefits that does NOT end up increasing your taxable income.
For people unfamiliar with that term, you may want to read my page about Student Loan Forgiveness Benefits and Tax Liabilities.
To make it simple, most forms of forgiveness end up costing you something, because the IRS requires that you claim that forgiveness as “taxable income” for the year you received it.
That would mean that if you had $10,000 forgiven, you’d have to add that $10,000 to your total taxable income for that year on your IRS tax return.
And this is where many other forgiveness programs end up leading to financial disasters, because if you had something like $100,000 forgiven, it could end up creating a $20,000 or even $30,000+ tax bill that year!
But what makes things worse is that the IRS requires you to pay all the money you owe in taxes in one lump-sum payment, unlike student loans, which are stretched out over a longer period of time, and paid off in small monthly payments.
I think the taxable income laws regarding forgiveness benefits are likely to lead so many people into financial ruin that I’ve created a brand new website to help people out with their tax-related problems, called Forget Tax Debt, which you can find here.
On Forget Tax Debt, I cover similar topics as I’ve done here on Forget Student Loan Debt, including things like Getting Free Help With IRS Back Taxes, Applying for IRS Tax Debt Forgiveness Benefits, and evaluating the Best IRS Tax Resolution Services.
If you have any tax-related problems, I highly suggest visiting the site to look for help.
PSLF Updates & News Announcements
March 11th, 2019: President Trump’s Proposed 2020 Budget Seeks to Eliminate PSLF Entirely
President Trump’s Proposed 2020 Budget will set a new record in spending – $4.75 TRILLION dollars – but one area where he’s planned significant cuts in spending is in Federal student loan forgiveness benefits, including a total elimination of the Public Service Loan Forgiveness Program.
As reported by trusted news sources like the New York Times, Wall Street Journal and other major media entities (NOT Fake News!), the new budget proposal seeks to end not just the Public Service Loan Forgiveness Program, but also subsidized Stafford Loans, meaning far less opportunities to receive Federal assistance with student debt.
Before everyone freaks out though, let’s make one thing clear – President Trump sought to eliminate PSLF last year too, made a ton of noise about it, and then ended up totally giving up on killing it in return for other concessions that the Democrats offered to keep it and other benefits programs funded.
I would put the odds of PSLF being completely eliminated at something like 5-10% at this point, as I think this will turn out to be just political posturing, as usual, but just in case, I’ve set up a new Change.org Petition that seeks to Save the Public Service Loan Forgiveness Program from President Trump’s Proposed 2020 Budget, and I would really appreciate it if you could add your name to the list of signatories here:
March, 2018: PSLF is Expanded to Cover Non-Eligible Repayment Plans
In Late March, 2018, the $1.3 TRILLION dollar spending bill passed by Congress and President Trump included $350,000,000 in funds earmarked to help people land PSLF forgiveness sooner than they otherwise would qualify for it.
Why? Because PSLF rules are being slightly relaxed for some borrowers. Under the original PSLF structure, only payments made on one of the eligible Income-Based Repayment Plans would count toward the 120 payment threshold required to receive forgiveness, but under the new rule, any payments that were made on any Federal plan will now count, even if they were done on an alternative, non-Income Based Repayment Plan.
The reason this update was made is that shady Loan Servicers were widely reported to have steered borrower’s the wrong direction, telling them that other payment plans would work just fine for PSLF, when that was definitely not the case. Fortunately, this new update will set things right for those borrowers who weren’t told the whole story and who ended up making payments on the wrong plan.
Keep a couple things in mind though, because there are a couple limitations to this change. First, the $350 million additional forgiveness funds for borrowers on the wrong plans is a one-time deal, and these funds are being provided on a first-come, first-served basis, so once that $350 million dries up, other borrowers will still be stuck in the same position as they were in the first place (with payments that don’t count).
And second, in order to receive part of that $350 million in forgiveness, your most recent monthly payment, and the one you made a year before applying for forgiveness, must both be AT LEAST AS HIGH as what you would have paid under one of the PSLF-eligible plans. That shouldn’t be a problem for most borrowers, since the Income-Based Plans typically stretch things out further and allow for a lower monthly payment that the old Standard Repayment Plan.
If you’re one of those people who was on the wrong payment plan and didn’t get payments counted toward the 120 threshold, then it’s time to contact your Loan Servicer and see if you can take advantage of this one-time offer.
October, 2017: PSLF Applications are Officially LIVE!
Even though Betsy DeVos and President Trump have been trying to kill off the Public Service Loan Forgiveness Program, there’s no indication that this will actually happen, and the official PSLF application is now available online (find it here)!
Everyone who’s been participating in PSLF and filling out those annual Certification Forms should rest assured that they will actually qualify for and receive PSLF benefits, as Betsy DeVos’s Department of Education won’t be able to stop people from getting their benefits as long as they submit their applications BEFORE any laws are changed (and Congress isn’t showing any indication that they want to do that…).
One thing to keep in mind, however, is that you can’t submit the completed PSLF application until you’ve fully satisfied the program’s requirements, so do NOT submit your application until you’ve made 120 qualifying, on-time, and in-full payments, under one of the Income-Based Federal Student Loan Repayment Plans, (like PAYE or REPAYE).
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.
For other general questions about student loans, you’ll want to visit some of the other Guides I’ve created for this site. I’ve been working on this project for nearly a decade now, and I’ve got resources, how to’s and articles covering just about any part of the student loan repayment process that you can imagine.
For Help with Federal Student Loans, look at my Guides on:
- Federal Student Loan Forgiveness
- Federal Student Loan Bankruptcty Discharges
- Federal Direct Loan Consolidation
- Federal Student Loan Delinquency & Default
- The Federal Student Loan Rehabilitation Program
- Stopping Federal Student Loan Wage Garnishments
- Using Federal Student Loan Deferments
- Using Federal Student Loan Forbearances
- Federal Student Loan Repayment Plans
And for Help with Private Student Loans, take a look at my Guides on:
- Private Student Loan Forgiveness
- Private Student Loan Consolidation
- Private Student Loan Bankruptcy Discharges
- Getting Help with Defaulted Private Student Loans
Alternatively, if you have any other questions about student debt, please feel free to post them in the Comments section at the very bottom of this page.
I review comments on a daily basis and I’ll get you a response as soon as I can.
NOTE: Please do not attempt to contact me via email or Facebook, as I will ONLY respond to Comments posted here on FSLD.
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Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.
I work as a nurse for the Department of Human Services in PA however my position is contracted by the state so I technically work for the contractor. My understanding is that because I am a contractor my position would not qualify me for PSLF. Is there any way around this? I love my job and there is no way I can perform this job position working directly for the state as my job title is only contracted.
No, if you’re not working directly for the Government, then you won’t be able to qualify for PSLF, unfortunately.
Can you make too much to qualify for this benefit? Say you are on the payment plan and you move from GS07 to gs-09, gs-11, gs-12 would you at some point no longer be able to use the program?
PSLF itself doesn’t have any income limits, but some of the Federal Student Loan Repayment Plans do.
For example, people on the Pay As You Earn Plan have to be facing a “Partial Financial Hardship”, so you can definitely earn yourself out of that plan. You’d still be eligible for REPAYE, however, which does NOT have that same requirement. The Income-Based Repayment Plan also requires a Partial Financial Hardship, but the Income-Contingent Plan does NOT require one either.
See my page on the Income-Based Federal Student Loan Repayment Plans for details on how they compare to each other, and to get an idea on which one might work best for you.
I was denied my recertification because one of my qualifying jobs is referred to as supplemental. I work 2 jobs at qualifying employment that total more than 30 hours a week. One is part time the other contractual to work at least 2 days per schedule plus PRN ( as needed). It was denied for the title of supplemental ( not part time).
I’d try working with your HR Department to see if they can alter the way they’re titling this role. There might be something they can do to help make sure that your work qualifies, just by giving it a different name on official documents.
Hi Tim. I have been in the PSLF program for a little while making over 40 payments so far. I started noticing that even though my payments are on time, the interest is being reported to the credit bureau’s. I am on the income driven plan but I’m not touching the principal at all. It’s all interest payments. This is starting to hurt my credit even though I make payments on time. Have you heard anything like this? Is there something I can do besides hurting my family by making larger payments?
That’s a really good question and surprisingly I haven’t run across it before! It’s normal that you’re only making interest payments if you don’t make much money and are enrolled in an Income-Driven Repayment Plan, but I would have thought your credit would remain unfazed since you’re actually following along with the repayment process, per the rules of your plan.
I think you need to contact your Student Loan Servicing Company to see if some sort of mistake has been made here, and to see if they’ve been accidentally counting you as not living up to your promises.
Next, if they can’t fix this for you, I’d get in touch with the Student Loan Ombudsman Group, which is a team of Government-backed attorneys who offer free legal advice on student loan-related issues. You can find their contact details by Googling their name. I’d try that if the Servicing Company can’t help.
I started the PSLF process in May 2018. It is January 2019 and I am still in limbo. Why is this so hard and takes so long? I want to leave my job but if I do and it is not a qualified employer I am automatically no longer eligible. If it is a qualified employer I have to start the application and certification process all over again. This is just crazy! I have been grossly underpaid in a public service position for 11 years and stayed mainly in the hope of student loan forgiveness.
It takes so long because Betsy DeVos and her cronies at the Department of Education are trying to prevent approvals from going through. They’re in cahoots with the for-profit schools (her staff is loaded with ex for-profit employees), and basically they don’t want to give up the golden goose. Hang tight though; this WILL work, it just takes forever for everything to get reviewed, approved, etc. As long as you’ve followed all the rules, you should be all set.
If you want to get a faster response and need help with verifying that things are being done correctly, try calling the Student Loan Ombudsman Group. This is a group of Government-backed attorneys who offer free advice to anyone dealing with Federal student loan-related legal problems. Google their name to find their phone number, and good luck!
Would putting my loans in forbearance cause a problem or be considered missed payments? I have 2 years in and my payment almost tripled this year. We had to put a 3 month forbearance on the loan. Just wondering if this will disqualify me. ??
No, forbearance will not caused “missed payments”, and for PSLF, you don’t have to make the 10 years worth of payments consecutively, so you can basically put the forbearance in place, take a three month break, then get back to making payments and racking up the 120 required to surpass the threshold.
Recently my income driven payment almost tripled and I am unable to afford it right now. I called to place the loan in forbearance for 3 months will this effect my 120 payments? I fear that my clock will start over or my 3 months of forbearance will disqualify me for the PSLF.
There’s no starting over – the three months your loan is on forbearance won’t count towards PSLF, but as soon as you move back into repayment, and start making full, on-time payments, you’ll start counting new qualifying payments towards the 120 required for forgiveness. It’s ok to have issues along the way – you don’t have to make 120 payments in a row.
I had filled out the PSLF app two years ago, prior to that I filled a borrowers defense on Devry (not on forbearance since my payment is based on income)… Like a couple months ago my loans RANDOMLY Switched from income-based to Forbearance. Called to change it back right away and the support guy did on fedloan… I have no clue why this was changed. It just now donged on me that it will cost me a month if not fixed???
What should I Do?? Have you heard of people payment plan changing. Was it an error from the borrowers defense kicking on the forbearance that I didn’t check. I know for fact I didn’t mark the forbearance…Any thoughts?
I’m not sure what could have caused this, but yeah, if you were on the wrong plan when the payment was issued then it definitely won’t count as a “full, on time payment” for your eventual forgiveness benefit. I’d ask for documentation from your servicer on why your plan was changed. Make them send it to you in writing. Consider also contacting the Student Loan Ombudsman Group, this is a free service of Government-backed attorneys who can help with student loan-related legal problems. They may be able to pursue this for you.
When I filled out the application for PSLF I think it asked if I want to continue making payments while my application is considered. Did you not check yes to this? Maybe it puts you into forbearance unless you mark yes.
Hello- thank you for the great information here. My daughter graduated one year ago and is qualified for PSLF and is currently paying under the PAYE plan. Her calculated payment is $0. She had her employer certified last year. she just got the recertification notice and she submitted that. We think we are doing everything right but what makes us nervous is her # of qualifying payments is 0 on her statement. Does a calculated payment amount of $0 count as a qualifying payment?
Thanks in advance
Yes, even a payment of $0 can qualify toward forgiveness. I would look into everything you’re doing, however, to make sure that it’s not something else causing the payments to NOT COUNT. Talk to your loan servicer directly, as they should be able to tell you exactly what’s going on here.
Hey, Tim, while listening to the Dave Ramsey show podcast, he stated, “30,000 people have applied for the PSLF and only 96 have been granted. The program is a scam.” I provided a link to the episode below. Just curious if you’ve heard anything like this? We’re 7 years in and obviously a bit nervous hearing something like this.
Yeah – the actual approvals process has been dragging on and on because of Betsy DeVos’s outright hostility to these programs. She’s in the pocket of the for-profit schools and doing everything she can to prevent forgiveness benefits from being awarded. They’ll come though. President Trump won’t be in charge forever.
I will be graduating from nursing school next week and I will be in approximately 100,000 in debt. About 30,000 of this is from another school when I wanted to pursue teaching. They are all federal loans including one parent plus loan.
If I consolidate all of the debt and begin a qualifying re payment plan for 10 years would I apply now or after I pay the 120 payments??
Will I be guaranteed forgiveness in 10 years??
And would only the debt from nursing school be included or would it also include my 30k from previous schooling?
Thanks for any info on these issues!!
The way it works is that you’re guaranteed forgiveness after making 120 qualifying payments. Qualifying payments is the key thing though – you have to be enrolled in the right repayment plan, you have to hold a qualifying job, etc. Read my entire post and your questions will all be answered.
Hi Tim, Thanks so much for this site. Having a current forum to discuss this challenging stuff is essential.
It is generally agreed that student loans are a crippling financial burden. Making the payments is hard yes, but what people don’t tell you about is the steep emotional price you pay: wasted time, tears, endless frustration navigating a deeply flawed system that seems geared towards cheating public service loan holders out of forgiveness at every turn. I am in public service and about 7.5 years into making payments under an IBR plan, working for the same employer. Every year my employer has submitted my employer certification form the same way: with a simple response that I have worked full time since starting in 2011. This year, for some reason they have decided to submit multiple forms, breaking out every month I didn’t work a full 40-hours, highlighting months where they have determined that I worked 37.5 hours weekly on average and designating those months as “part-time”. They do this casually, but the result is devastating because it has the potential to add 2-3 years (of much higher payments due to higher income) to my repayment time. Here is my question: Do I need to have my employer re-certify my entire employment history every time they fill out the form? Or can they just certify every year for the past year? If they do have to certify my entire work history every time, this is worrisome because interpretations of my work history seem to vary depending on who at my place of work is completing these ECF forms. Meaning, my qualifying payment count is left up to an individual’s interpretation of my work history and therefore subject to fluctuation every year. This all seems so wrong. What am I missing? I wonder if other people are having the same problem.
Wow, Sandra… I can’t believe your employer did it that way! What do they gain by making it look like you’re a part time employee???
You only need to certify each year as you go, not the entire employment history, so you don’t need to go back over previous years.
And yes, it’s annoying and SCARY that any of this stuff is open to interpretation, but unfortunately, that’s definitely how it works.
Good luck! I hope you get that PSLF Discharge as soon as possible!
I only did the form once- after I made 120 payments. Your employer is not doing this correctly. If you have full-time status I would not even bother until you have made 120 payments or if you are leaving the position. It makes no sense to keep doing this form.
I have an insane parent plus loan and my second kid hasn’t even started. I have consolidated the loans and have been making income based payments for around 2 years now. I am a retired municipal paramedic. I assume I don’t qualify for the loan forgiveness since I’m retired, or would the years I put in previously count?
If you’re retired, then no, you won’t count. The way eligibility is determined is AT THE TIME THE PAYMENT IS MADE. Meaning, you have to be CURRENTLY working full-time in a Public Service position.
This is a great resources we have been looking everywhere for information on the Federal Student Loan Forgiveness program. We married in 2017 and my wife is 5 years into her 10 year commitment but we are struggling with making a decision on how to file our taxes. We live in Wisconsin which is a community income tax filing state. My question is if you know how community income states affect the loan forgiveness. I worry that even if we file separately that with the community income her income based monthly payments will go up significantly as my income is approximately double hers. If you have any experience with this please share.
Thanks for the kind words, and I’ve got an easy answer for you: for FEDERAL tax purposes, you can no longer file separately to hide a spouse’s income and qualify for lower student loan payments. If you’re trying to keep the monthly payments low, there’s literally no way to do that anymore after the IRS changed the laws a year or two ago. Unfortunately, you guys are going to get hit with a significant monthly payment increase as soon as they find out you’re married. With that said… I would talk to a CPA or an Attorney with experience in this matter and see if they can find a loophole for you, because there may be something you can do. If you do find good news, please come back and share that with me as I would love to help people in your situation get out of a tight spot.
My situation is this: I have been paying on my student loans over 15 years. I started my non-profit job June 26, 2012, so I will have been here 6 years this June. Prior to June 2012, I did not work for a non-profit. Obviously, I have made over 120 on time total payments considering I have been paying the loans off for over 15 years, but do they only count the payments made since I began my employment at my non-profit job? If so, then I have only made 72 payments…short the 120, Just checking!
Only the payments that were made while you were at the non-profit will count, so you’ve only made 72 payments. There’s no provision for any sort of retroactive counting of payments made previously. Also, your payments will only count if they were made under one of the income-based repayment plans, so you need to make sure that you’re enrolled in one of those or you may run into trouble when it comes time to getting forgiveness. It’s vital that you pay attention to every little rule in detail, otherwise you’ll get turned down at the last second and won’t qualify for the benefit.
Your site is great! Lots of good info. Question that is a bit similar to Melissa’s. I have worked for public schooling since 2007 and was paying student loans at that time under a repayment program. Am I able to go back and add this to the PSLF? I have since changed public schools and am also consolidated under a different lender. What if anything can I do so these previous years can count towards my PSLF?
If you were enrolled in an Income-Based Repayment Plan at the time you also satisfied the employment eligibility guidelines, then yes, you can count those previous payments as part of the requirement for PSLF. It doesn’t matter if you change lenders, employment, etc., it’s all based on number of payments, and you need to have 120 eligible payments in order to qualify for forgiveness, so I think you’ll be good to go!
In a follow up question to the ones above. I worked for a government agency for approximately 3 years prior to finding out about the PSLF plan. I was just making the normal monthly payment during that time but I was working for the same employer I work for now and currently enrolled in the PSLF. Can I get credit for those prior payments? If so who do I need to contact? Thank you
Your payments will count toward the 120 threshold ONLY IF you were on an Income-Based Repayment Plan and working at an eligible position (for a Government Agency, a Non-Profit, in the Military, etc.). You don’t need to do anything to get credit for your prior payments, if you satisfied the eligibility conditions at the time they were made, they’ll be automatically credited toward you 120 payment requirement.
The one thing you’re going to need to look into is your annual certification process. Each year, you’re supposed to submit paperwork to the IRS that basically proves you’re eligible, and if you haven’t been doing that, then it’s time to start researching what exactly you need to do, and what forms will be required for years you missed the certification part of the process already.
My advice is to contact your HR department and ask for their assistance with this. They’re SUPPOSED to know exactly what needs to be done, and if they don’t, then they’re supposed to research it on your behalf and walk you through it. If they can’t help, try contacting the Department of Education directly, or even calling the Student Loan Ombudsman Group (this is a free service provided by Government-backed attorneys who offer advice about student loan-related legal issues).
Hey, Tim, any word of the first person or anyone who has successfully been given forgiveness for their loans(PSLF)? Thanks again for this site!
Unfortunately, I only seem to hear back from people when they’re having PROBLEMS. I wish people would come back and report success stories too, but nobody ever does (even though some people promise to do it!). I have been reading Media reports that loans are getting forgiven, and that the PSLF applications and Borrower’s Defense Applications are being processed, but I don’t have any first-hand reports of that occurring.
Well, hopefully I won’t be the first in 2021 to come back to share some good news 🙂
My wife has been “hedging her bets” by paying the interest lately(on the IBR) so the 6 figure loan doesn’t keep growing. However, we’re planning to stop doing so once we see the PSFL being payed out.
Thanks again for this great site!
I will be done with my 120 months in June 2021 and will share the good news! Just trying to find out how long the process is currently taking after applying for forgiveness.
Well, hopefully I won’t be the first in 2021 to come back to share some good news 🙂
My wife has been “hedging her bets” by paying the interest lately(on the IBR) so the 6 figure loan doesn’t keep growing. However, we’re planning to stop doing so once we see the PSFL being payed out.
Hi Drew, that’s actually a decent approach to handling this, but it’ll be a huge waste of money if your loan forgiveness does eventually come through, so I am with you on cutting off those interest payments. Everything SHOULD work. PSLF should not disappear, and everyone who’s already participating should end up getting their loans forgiven. I think that even if they do succeed in killing off PSLF entirely, it’ll only apply to future college students, because basically anyone who’s already taken out any loans should be able to use the program. There’s no way to be certain about it, but you should be good to go.
Thanks again, we decided to stop paying the interest and opened a separate savings account and are going to put the money there. We appreciate the feedback.
Hey I hope everything works out for you Drew!
My understanding is that the amount of loan forgiven is NOT taxable income. Have you read differently? Can you state the source? I have a very large amount of federal student debt which will only be much larger if I continue to make minimal payments in anticipation of loan forgiveness at 10 years. I’m currently in my fourth year of the program. It will be very interesting to see what happens in 2017 with this first round of students applying for debt forgiveness.
Yeah – the latest consensus thinking is that anything forgiven under PSLF will NOT be counted as taxable income. There was a ton of confusion about this until recently.
Also – you’d better hope that Betsy DeVos’s plan to kill off PSLF is stopped, because right now, NOBODY is going to get forgiveness since her Department of Education has effectively halted the program entirely.
I have been teaching for 8 years as a science teacher and have already had my federal loans forgiven but it did not reach the $17,500 I qualified for–I had approx. $12,500 forgiven. I am returning to school for a Master’s Degree and would like to know if the remaining amount can be used to forgive a portion of the loans I will accrue by completing this program since I did not previously reach the cap? Thank you for your help!
Yes, I believe the $17,500 is a lifetime limit, so you should still be able to go back and qualify for additional assistance.
You may want to verify this by contacting the Student Loan Ombudsman Group, which is a team of free lawyers backed by the Government, and authorized to provide legal advice on complicated student loan issues. They could tell you for sure whether or not you’d be able to go back to the well for more.
You can reach the Student Loan Ombudsman Group here.
Thanks for running this website. Currently I am making payments on the public service loan forgiveness program. However, in making only an income based payment which is allowed in the program my student loan debt continues to climb monthly because of the large amount of student loan debt that I have acquired. I keep reading this 57k cut off and it scares me. Am I doing the right thing. I feel like I could be setting myself up to get hosed in the end by not making enough in payments now. Since I’m in year 4 would I be grandfather in potentially to a cut off of more than 57k. Also, I think I ready somewhere that you are responsible for paying the taxes on any amount of student loan debt that is eventually forgiven. Thanks,
Don’t worry about the $57,000 cap – that’s been off the table for years. There’s no way in hell that it’ll ever get put in place.
What you SHOULD be worrying about is that Betsy DeVos is trying to kill the entire program. She is literally suggesting removing all support for Public Service Loan Forgiveness, meaning that people would get $0, not up to $57,000.
I think that even if her proposal is approved, you’ll still be protected by some kind of Grandfather clause, and be eligible to receive the benefit anyway, but please do your part to help protect PSLF by signing my petition to Protect the Public Service Loan Forgiveness Program, which you can find here:
Tim, Thank you for just an informative site. My daughter recently graduated from nursing school and in her last 4 years I have had to take out an estimated $54k in parent plus loans. I am wanting to consolidate, but this is what is leading to my question. I have been a firefighter for the last 11 years and will continue in this profession until retirement. I’ve read that some loans do not qualify under the loan forgiveness and want to be certain that I am consolidating under the correct loan. The options it is giving me are:
You will pay a total of $113,388 over 300 months
$378 – $378/month
You will pay a total of $122,764 over 300 months
$310 – $537/month
You will pay a total of $113,388 over 300 months
$378 – $378/month
You will pay a total of $122,764 over 300 months
$310 – $537/month
Revised Pay As You Earn (REPAYE)
You will pay a total of $66,751 over 72 months
$810 – $1,080/month
Pay As You Earn (PAYE)
You’re not eligible for this plan based on the information entered above.
Income-Based Repayment (IBR)
You’re not eligible for this plan based on the information entered above.
Income-Contingent Repayment (ICR)
You will pay a total of $69,906 over 92 months
$737 – $784/mo
The standard plan is certainly the best option for me since I have other kids in college. I thought I read the only option for loan forgiveness is if I pay back over the income contingency, however under the options given, I can’t afford that payment plan and it is paid off before the 10 years. Can you please advise? Your advice is very greatly appreciated.
The Standard Plan does NOT qualify for forgiveness at the 10-year mark, it’s only the Income-BASED plans that will, meaning you can use REPAYE, PAYE, IBR or ICR plans to get your 10 year forgiveness benefits.
As a Firefighter, you’re definitely eligible to receive the forgiveness at 10 years, and like you listed here, your choices are really betweeen REPAYE and ICR if you want the forgiveness option.
The Standard Plan is definitely the cheapest in the short-term, but look at that total amount you’d pay… nearly twice as much as REPAYE or ICR. I kind of think ICR is your best bet, since the payments are a little lower and the term is stretched out so much longer than REPAYE.
You’re really going to have the make the decision on your own though, based on what you think you can realistically afford. Before you do sign up for one of the Income-Based Plans, makes sure to contact your Loan Servicer and CONFIRM that your employment makes you eligible for Public Service Loan Forgiveness.
Get everything IN WRITING from the Servicer BEFORE you sign up for the plan, because you never know what could happen later, and you want to have documentation that they told you this would work in case the train goes off the rails at some point.
If you get this eligibility in writing, and they try to deny it later, then I think you’d have a good argument for qualifying for the Borrowers Defense Against Repayment discharge.
If I were you, I’d find a way to afford the REPAYE or ICR plan. Not that it’s easy, but there’s always a way. (One idea: make the kids get jobs and pitch in toward their college costs. There’s plenty of time to work while attending college… trust me!)
I am a police officer and enrolled in PSLF on an IBR plan in mid 2017. I was instructed to submit an Employment Certification Form certifying each of my law enforcement employers while I was paying on my loans. So from 2013 til 2017 when I enrolled in PSLF I was on a Standard Repayment Plan and employed by a certified employer. All of those payments were NOT counted towards my 120 payments…is that due to me being on a Standard Repayment Plan?
Yes, those payments won’t count if you were on the Standard Repayment Plan, because ONLY Income-Based Repayment Plans are eligible for PSLF.
I filed a Chapter 7 Bankruptcy in December 2015. I included all my Federal Student Loans and for a year they showed a balance of zero (included in bankruptcy remark) on my credit report. Then one day that changed and they showed in deferment. I’m 80% disabled by the VA, a war veteran, work for a state agency, and have a permanent disabled 5 year old and I’m a single mom. I believe I meet the hardship requirement. What can I do at this point? I have 56k in loans!
Contact the Student Loam Ombudsman Group and ask them if they can help you untangle what happened here. You are just under the threshold of qualifying for a Total Permanent Disability Discharge, but perhaps they can help you get some percentage of the loan discharged, or they can figure out whether or not it was all supposed to have been wiped out via bankruptcy resolution.
These guys work for the Federal Government are a not-for-profit service, so you don’t have to pay them anything and you can trust what they tell you. You can find their contact information here.
Tim, Do we know yet if Trump’s proposed student loan forgiveness plan will include the previously unlucky FFEL federal loan holders? To summarize a long story, I borrowed in 2003-2005, graduated in 2005 and immediately consolidated my FFEL loans into one loan. There was no Direct loan program then so that was never an option for me or it was not clearly presented. Your article mentions that Trump’s plan would include “ALL BORROWERS” so while it does make us wait 5 years longer than the SLFP, it might be more encompassing for those who borrowed from FFEL, right? Maybe? Thanks
We still don’t know ANYTHING about President Trump’s plan, and I’m really hoping that he’ll get this sorted out soon because it’s making me nervous that he hasn’t announced anything yet.
Unfortunately, since he’s getting pounded on every issue and hasn’t even handled Healthcare of Taxes yet, it could be a while before we get any news on student loans.
You’re assessment is probably right. He’s got to much other stuff on his plate to be thinking about student loans. I could see him not doing anything for a few years to be honest.
Thank you for that great reference. I will pass it on to my daughter right away.
Can you let me know if you have heard of this situation before? My daughter works at an extremely demanding, low paying job at a public hospital which is a qualified institution for PSLF. She’s been making her monthly re-payments, looking forward to the 10-year mark when her loans (still over $100,000) will be forgiven. However, she recently found out that her first 3 years at the institution won’t count because technincally her employer for the first 3 years was a “temp agency” who helped her get the job while someone was on maternity leave. After 3 years of employment and student loan repayment, my daughter was hired permenently by the institution. She continued to do the exact same job, at the same place, the same hours per week etc. – everything was 100% the same – she never set foot in the offices of the temp agency, yet as they were her “employer”, and not an eligible institution, now she is told those 3 years won’t count towards her ten. Doesn’t that go against the purpose of the program? Is there any recourse that you know of? Thank you.
Yes, it goes against the spirit of the program, but the way these things are structured, she may be screwed. It’s not fair, but unfortunately it happens to all sorts of people. What I would recommend doing is contacting the Student Loan Ombudsman Group, a free, Government-backed group of attorneys that offer advice on legal issues related to Federal student loan debt. Ask them if there’s any recourse, and you’ll get a good answer.
Im currently enrolled in PSLF have been since 2014. My question is how would be going back to get my Masters effect my current situation?
Going back to school won’t hurt your eligibility for PSLF, as long as you keep up the requirements (working at an eligible institution full-time, and making your payments in full and on time). The new debt you take out for your Masters will need to be paid off like your previous loan, and the payments you made on the earlier loans won’t count toward forgiveness on your new loans, but they too will be eligible for forgiveness once you’ve made 10 years worth of payments toward them.
So once I’ve completed my masters, Will by debt of both my bachelors and my master be consolidated?
Or will I be making two seperate payments on two different set of loans?
This question is so confusing trying to explain, and I cannot get anyone at FedLoans to understand at all..
I would love for you to email me, as you seem to be the best insight I have to this question.
Student Loans are only consolidated if you choose to consolidate them. You’ll be making two separate payments.
PSLF through Fed Loan Servicing is not a reality. They send invoices with the amount in bold print. I pay the invoices, for 70 months, and now find out they miscalculated the monthly amount due, and the payments don’t count towards the 120 needed. After demanding an audit they send a service history that gives me a qualifying payment. Another service history comes 3 days later and takes the payment away as it was short ONE PENNY off! The cascading effect throws off future payments. Then another payment was off by .24 Cents. I asked them to tally up the “missing” money and I will gladly pay it to make things even and they say it can’t be done.
I have complaints in to CFPB, Ombudsman, my local Senator’s office, and have been assigned a Fed Loan Borrower Experience Advocate to see if I can get it straightened out.
Run away from Fed Loan Servicing and tell everyone you know that PSLF is a sham. Google Fed Loan Servicing Complaints if you think I am making this up.
Sounds like you ran into some trouble, but that doesn’t make PSLF a scam. You need to contact the Student Loan Ombudsman Group to get them to advocate on your behalf.
This is a team of attorneys that work for free for the Federal Government, and who help people like you deal with complicated legal problems related to Federal student loans. If you took this case to court, any sane judge or jury would approve your PSLF application, so get the Ombudsman working for you and get this resolved.
Don’t tell everyone that PSLF is a scam just because you hit a snag. It’s going to work eventually if you stick with it. Don’t quit now when you’re this close!
My potential issue is bait and switch. I’m a physician. I get that taxpayers don’t want to subsidize my medical education.
Problem is, whatever they do, they need to have a grandfather clause. The reason? My credit has long been good enough and my job decent enough to qualify for refinancing my considerable student loan debt at majorly lowered interest rates. One of the reasons my current balance is so high is because my grad plus loans were locked in at 6.5 percent in one case, and the bulk at 7.9 percent. (hooray 2007!) That’s significantly more than my car note or my mortgage interests. That rivals my points credit cards.
So for the four years of my residency and one of my fellowship that I’ve been paying into the program, my loan burden has been *increasing*, nearly doubling due to these interest rates. I have stayed into the program because of the PSLF and though I make a good salary, I don’t make anything nearly what I could make in private practice. Staying in the public sector has been motivated both by the fact I really like my job, but again PSLF.
If they decide to revoke PSLF, they have essentially added over 100K to my loan balance that I could have refinanced and not given the excess interest to the government, and then swapped out the entire reason for higher level professionals to stay in the public service industry and continue paying reprehensible interest rates. Why teach residents for lower pay when I could be raking in wealth in PP? Why should attorneys continue on as public defenders (something desperately needed and already understaffed)?
They want to cap new borrowing because they didn’t think this through, fine. But don’t bend over all of us who have played by the rules for five years paying hideous interest rates. My loan payments per month for the next five years will be 2800-4000 dollars a month. To then say “Ha! Just kidding, but thanks for all that free money!” is extremely disingenuous and borders on breach of contract for the initial enrollment. If they pull that level of garbage and I at least want the extra 4-5% interest they’ve been gouging me over market applied to my balance for the last five years. I don’t want “free money”; I want the arrangement available when I applied for my loans. If it hadn’t been available, I would have worked out the subsequent financing differently and financed with deferment with a private company.
The government has even ensured residents and fellows can no longer defer their debts so interest doesn’t accumulate. Some private companies do. To dismiss this for the people in it would be absolutely gouging us and running. Double our loan debt while we’re in training and when we’re *finally* able to make headway and get out of training and start working (for me at age 35), rip us off and run.
I hope if they do repeal this without grandfathering, we have a mass doctor walkout. This is what a *lot* of young doctors from poor families (like mine; no parental help) depend on. Suddenly having half leave the public sector would send a message.
I don’t think you’ll have anything to worry about. IF the Federal Government (Trump Administration) does end up nerfing PSLF, then I am fairly certain there will be a grandfather clause that protects the 10 year forgiveness benefit for anyone who’s already working on paying back their loans, and, in fact, probably for anyone who’s taken out any form of federal student loan debt at all.
I would even think that there’d be something of a window, allowing people who are still in high school to still qualify for PSLF, for something like 2-3 years, to allow people additional time for planning purposes and deciding what the best possible option would be for them.
Like you mentioned, if they pulled the PSLF benefit from people like yourself, there’d be far too many lawsuits against the Federal Government, because people like you (who have money, connections, etc.), would definitely not just allow this to happen. Can you imagine how many lawyers, doctors, dentists are all relying on the PSLF benefit to get out of their $300,000+ student loan debt?
There’s just very little change that they would pull the benefit without allowing grandfathering, or some kind of replacement benefit that applies to people like you. I don’t think you have anything to worry about.
I recently got hired into a fed job with the treasury. I knew from the minute I stepped foot on campus during my first year that I had to have a federal government job in order to pay for loans, being that my single mother’s I come did not qualify us for financial aid in grants. I got mostly loans! But my mom has worked so hard and sacrificed so much. My option to go to school was to make her proud.
Anywho, it is Just about 2017 now. I haven’t started working yet due to security clearance and checks, but I should be set to start in a few months at most. My question is: if any changes were to take place to PSLF before I enroll, do you think it would affect me? I’ve read around that possible future changes would only affect people who borrow qualifying loans AFTER the date in which changes go into place. Some people are saying this because for current borrowers after 2007, in our loan counseling and agreement, PSLF was highlighted as a possible route of repayment and forgiveness. It would actually be disheartening for me to have taken out my student loans (with intention to utilize PSLF benefits as it stood at the time I borrowed) and finding out that there would be either a cap or total elimination of the program.
I do not think that any changes to PSLF will impact you. My thinking on any decrease in benefits is that they’ll only apply to FUTURE college students. I don’t think you’ll need to be enrolled in PSLF at the time of the changes to be “grandfathered” into the eligibility window. My thinking is that as long as you’re a college student when the changes go live, you’ll still be safe.
The reason I think this way is that people are making decisions about where to go to college, and how much to borrow, based on the availability of forgiveness benefits, and many people who took out huge loans to attend school would not have agreed to do so if the excellent forgiveness benefits weren’t available to help them get out of debt after graduating.
For this reason, I think the Federal Government will ensure that anyone who took out student loan debt will continue to qualify for the better, earlier benefits. I think you will be just fine.
I am an occupational therapist who treats children with autism and other disabilities. I started working toward qualifying for PLSF by working for an agency with 501(c)(3) status in 2009. While at this agency, all ancillary health care jobs were eliminated and the staff laid off. I immediately became employed by a contractual, for-profit agency (where I am still employed.) providing the exact same services to the exact same Medicaid and Medicare clientele. The 501(c)(3) agency, (my former employer which laid off its staff, and which continues to case-manage my clients), referred the majority of their clients to my new, for-profit contractual employer–so I am literally providing the same service to the very same children, just in a different facility with a different employer paying my fee-for-service wages.
This is a growing trend–non-profit health care agencies (and schools too, for that matter) eliminating “direct” staff in favor of contracting out services as a money-saving step (no more paying full-time staff benefits). My question: are those of us who started down the public-service path with a 501(c)(3) now disqualified from PLSF because our positions have been “restructured” into contractual positions with agencies that do not meet the 501(c)(3) status?
I think I know the answer…but am hopeful that there might be some loophole in the law that allows for those of us in this position to still qualify.
Rules are rules… if you’re not working at a 501(c)(3), for the Government, or some other qualifying agency, then it doesn’t matter what actual service you’re providing (even if it’s identical to those at a qualifying institution). You won’t qualify.
I read on a couple different sites that the amount forgiven (principal and interest) is NOT taxable. Just wanted to share that.
Now, the question is if I am currently enrolled in PSLF and IBR would any future changed to the program (or even cancelation) affect me? It’s been 3 years of making minimum payments (due to IBR) so not even covering interests which are capitalizing monthly.
I plan on stay with the company I work for (eligible) for the remainder of the program so that’s not an issue.
Thanks for the help.
In many situations, the amount forgiven will not be taxable, but it depends…
I don’t think future changes (like for example, if Donald Trump’s Loan Forgiveness Program overrides everything that Obama’s did), would impact you. I would imagine that the Federal Government will say that any changes only apply to people who have not even yet taken out student loans.
There may even be a grace period of a couple years where people just about to borrow will still qualify for the older, better benefits, if anything is reduced. I don’t think you should have to worry at all about losing your benefits, or having them made worse.
So what if my HR department does not understand what this is and if the company is even eligible? My job function is different as an athletic trainer, wherein, I am employed by a physical therapy group and I work at a non-profit private high school providing health services. (The school carries all of the correct 501 (c)(3) designation)
Since I work at the school, but am employed by the clinic, I feel that I am ineligible for this, and so too are many other athletic trainers who provide medical services to schools in this same employment model.
Contact whoever services your loans and ask them whether or not you qualify. At the end of the day, it’s the loan servicer who has to fill out the paperwork and actually get you on the program, so don’t worry about it if your company’s HR people don’t know how to react. That won’t be an obstacle to getting on the right plan and getting payments counted toward eventual forgiveness.
I have been reading the many question and replies and Im not really seeing anything that I can use to apply to my situation. I really feel I will take my student loan debt to my grave. Im just turned 54, and retired from being a State Probation Officer and now working in Parking Enforcement at the city level. I have been graduated from college since 1994, and I still have this debt following me. I am completely devastated as I learn this debt forgiveness program has been around for years and I was never told about. I have never been able to make my monthly payments and qualified for a deferment each year for the past 20 years (oh, that number sounds familiar) Anyway, out of ignorance or lack of guidance from the Direct Loan folks, I have accumulated 50k in interest as my loans totalled around 25k, when I graduated. It was my assumption (foolish I know) that I was never going to be able to satisfy this debt so why try. Take the advise of the Direct Loan folks and deal with what happens down the road.
My question and hopes for some loop whole or miracle by the grace of God, I think I’ve been able to make three payments to my continuously deferred loan. I spent 17.5 years in the pubic sector and plan on at least 10 to 15 additional at the local government level so Im pretty sure I qualify for this program. My question is even though I was in deferment and only made three payments, but I am at the 20 year mark, is there anything that can be done to credit me for that which I have already worked?
If you’re working full-time for the city, then you should qualify for the PSLF benefit, and your loan should be discharged after 10 years of payments have been made. You will definitely qualify if you spend 10-15 more years at the local Government level.
You’ll probably need to switch to one of the eligible plans (one of the Income-Based Repayment Plans, like the REPAYE Plan), and then any payments you make will count towards your 120 payments threshold.
You need to contact whoever services your loans to find out what they’ll require of you, and whether or not they will give you credit for previous payments (that typically isn’t offered – if you weren’t satisfying the eligibility conditions, then the payments likely won’t count).
But the good news is that you’re on the path to get your loans forgiven in 10 years, at the worst case scenario, which is awesome!
Hello: The PSLF is not taxable. This is an unique program, so any loans forgiven will NOT be taxable. Thanks!
1) Does anyone know if you can make extra payments once you are in an income based repayment plan with PSLF? Idea would be to make some payments to at least keep any more interest from accruing and being added to principal. Yes if you go 120 payments while having qualifying service It would be all forgiven. But what if after residency/fellowship you are working for an org that switches from non profit to for-profit, or if a hospital decides to have its docs actually employed by a for-profit they contract with? By making some extra payments, if the employer no longer qualified, or if the Govt changed the rules retroactively and excluded docs, you would at least still possibly have a manageable amount of debt after residency.
2) What is trend re non for profit say university affiliated teaching hospitals moving their attending docs over to for profit private doctor companies that would not qualify then as a PSLF qualifying employer?
1) No, you cannot make extra payments. The rule is that you have to make “full, on time, scheduled monthly payments” to be counted toward you 120 payments.
2) I’m not sure on that one. PSLF eligibility is entirely dependent on work function/position/etc. I would speak to your company’s HR department, and whoever services your loan, to see if you can make an argument that you should be covered.
I am a recent graduate and am a Registered Nurse. I know I may be a little premature looking into loan forgiveness. Your site states that Stafford Loans do not qualify but the William D Ford Federal program does. I looked on the loans page of my college and am confused….It says that Stafford is from the Ford Federal program? Am I seeing this correctly? Can you clarify if I would qualify for the program after my 120 payments? Below I have enclosed direct copied and pasted information from my college loans page.
“Federal Direct Stafford Loans, from the William D. Ford Federal Direct Loan Program, are low-interest loans for eligible students to help cover the cost of higher education.
Federal Direct Subsidized Stafford Loans are offered to students with financial need.
Federal Direct Unsubsidized Stafford Loans are NOT based on financial need.”
It’s never too early! People like you are the ones who end up paying off their debt and moving on with their lives, rather than coming back to my site 10 years later and desperately pleading for help. Good on you!
And… it looks like I may have screwed that part up… could be a remnant typo, or an error made while updating the page. Federal DIRECT Stafford loans are eligible for PSLF, so you should be all good.
If you want to verify with CERTAINTY, then contact whoever services your loan and ask them to make sure that you’re doing everything properly to qualify for PSLF.
My daughter is attending an expensive private college. She is persuing a degree is Social Work and wants to work in a hospital. She still has 3 years left of college then an extra year for masters degree.
Does a Social Worker position in a hopsital qualify for loan forgivness?
What is the likelyhood of this program going away or capped by the time she qualifies for this program? Im guessing it is a gamble to have her take out extra student loans to stay at this school thinking her loans will be forgiven eventually.
How do we request her loans to be direct only?
Thanks for your help.
That MAY qualify for the Public Service Loan Forgiveness Program, but it depends on her specific job duties, etc. You have to read through the entire article to determine what is required for eligibility purposes. I would look into the PSLF Program, Non-Profit Loan Forgiveness Program, and the Government Employee Forgiveness Program, as those are probably her best opportunities to earn loan forgiveness.
It’s always a gamble when you’re borrowing against future potential earnings, especially if you’re planning on counting for loan forgiveness benefits to get rid of the debt. I would follow the rule of borrowing no more than your expected annual income for your first year after graduation, but that’s not an easy thing to do, especially for people attending expensive private colleges.
Let me ask you something really important… does your daughter actually need to attend that fancy school? Are their Social Work programs so much better than a more affordable public institution would offer? The best piece of advice I could offer anyone attending college right now is to think twice about paying through the nose for a diploma with a more exclusive name on that slip of paper.
When it comes to getting a job, and doing a good job, how much does the name of the school really matter? Don’t waste money chasing after ego!
I’m currently a year and a half post grad mental health worker. I work two jobs. One full-time job at a non profit agency which meets PSLF rewuirement. However, I also work part time for a private mental health practice as a health practitioner (supervised mental professional). Does my employment at the private practice, even on a part time basis, exclude me from the PSLF benefit?
Not at all! Congratulations on qualifying for the program! PSLF is the best benefit program available to people with Federal student loan debt.
I’m trying to get myself some more information on the PSLF program as my wife is currently enrolled in it. I hear about all these changes set to take place in the future and it scares me about our financial future. In her and now our case she has a large student load debt of 150k plus and is on a income based repayment plan. At the current rate of repayment we would never pay these loans off after ten years. Therefore, these laws capping repayment at 57k would completely cripple us financially. I read what the lawyer says above about the grandfather clause and that gives me hope that the current system we are enrolled in is possible to ride out to the end. Do you foresee any possible changes to the program for people already enrolled that could drastically change things. Also, should I be checking any other place for information regarding PSLF program. Thank you
As far as anyone knows (yet), none of the proposed changes are going to be put in place. There’s been no recent discussion of any of the reductions in benefits.
Plus, even if these reductions were to go into effect, virtually everyone in the industry agrees that they would not be applied retroactively (against anyone who’s already borrowed student loan money).
IF anything changes for the negative, then the restrictions are likely to apply ONLY to future borrowers. There will probably even be a couple year grace period before the restrictions are applied to the new borrowers, to provide time for everyone considering school and student loans to make themselves aware of the new changes.
I would not worry about this. I think you’ll be completely fine.
There needs to be many changes and there is no forgiveness for the Parents Plus borrowers and our kids couldn’t have had even money to attend college without us taking out loans for them. There are also so many restrictions to loan forgiveness for students that I find it hard to believe that many people would receive any benefits.
The only people who would probably get the benefits are people who borrowed more like doctors and lawyers. I also notice seasonal/full time wildland firefighters do not qualify to any forgiveness due to the definition of full time. They definitely need changes to help middle class students and parents with loan forgiveness.
I agree wholeheartedly. I’m honestly hoping that student loan debt becomes a big issue in the upcoming Presidential Election. If Donald Trump would just ONCE say the phrase “student loan debt”, I think we’d see some serious media coverage of this important issue.
Keep your fingers crossed!
Hi, thank you for all the great information and updates! I just wanted to make sure of one thing. What makes one “grandfathered in”? I consolidated my loans and got on the IBR plan as soon as I started teaching. I asked if I needed to fill out any form and the loan service company said no. I read where you agreed that we do not HAVE to fill out the form but it would be helpful because we would need each employers information when the 10 years are up. Well I have worked with the same district for five years and have no intention of changing in the next five so I never submitted any form. It will be very simple to get one district’s word that I have worked there for X number of years. I only made sure I had followed all steps of eligibility. My question is…Am I still considered grandfathered in? Or do I need to submit the form to be grandfathered in? Thank you!
When I’m talking about being “grandfathered in”, I’m talking about the idea that if this program’s benefits are cut, those cuts likely won’t apply to anyone who’s already taken out Federal student loans.
My opinion is that you don’t need to have any application submitted, and I believe that your loan serciver is correct. I don’t think you have anything to worry about here.
What do you think about the Student Loan Project agency? They offered me a low monthly payment and said I qualified for the Public Forgiveness program because I’m a public school teacher. The fee was 500.00. Navient is servicing my loan now and the payments will be double. Is the Student Loan Project agency legit? Is this a scam?
I can’t comment on any particular company or offer, but I will tell you that you can qualify for and enroll in the Public Service Loan Forgiveness Program entirely on your own, without having to pay anyone anything. All you need to do is contact your loan servicer (Navient) and ask them about getting onto the program.
If I took out federal loans eligible for PSLF forgiveness for undergrad and have been making payments. 5 years later, I decide to go to graduate school and take out additional loans, will the 120 payment requirement begin all over? Thanks
I believe that your loans will be treated separately, unless you consolidate them. If you keep them separate, then the 5 years of payments you’ve made toward your undergrad loan will count toward PSLF for it, while you’re going to be starting from scratch with the graduate loan.
If you consolidate your loans, then I think you’ll start at zero with both of them. Be careful! Contact whoever services your loan and ask them how they interpret the guidelines here, because at the end of the day, they’re the ones who get to make the call.
Thanks for sharing all of this helpful information. I just want to make a point that the public employee loan forgiveness program seems very unfair to anyone who is forced or required to retire (health reasons, injury, unemployment, to care for a family member, etc) before the 120 monthly payments can be made (and more unfair if you worked in public service for many years prior to starting payments). Most of us do not retire rich. The current rules also seem to not benefit those of us taking parent loans for our children when we are in our mid 50’s because we are going to have to be able to work into our 60s for any possible loan forgiveness and the payment plans can really put a burden on saving for retirement. Just want to point this out and hope for changes ahead. Thanks for reading my rant.
So I take issue with the part of the article that reads, “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.”
A couple of things. Unless you take the lowest paying jobs in the public sector, in my experience the loans are designed to have you paying off the majority of the loan in ten years. I happen to be a principal and was told that now I have to pay $2,000 a month, based on my income (NOTE: My income isn’t low but 2000 is not even an option)?
At that rate, they will forgive four payments. This program only benefits individuals with the lowest paying jobs in the sectors but is not suited for those well-meaning people who intend to lead in the field. In my case, I earn $40.00 interest daily at 6.99% and all I know is that I went to a top 25 school based upon what I was told about PSLF.
I could have gone a far cheaper route had the true “payoff” been abundantly clear.
Thanks for weighing in Dr. Bradley.
The good news for you is that PSLF is unlikely to get capped any time soon. I haven’t heard any further discussion about the proposed $57,000 limit getting put in place, and I highly doubt that it’s going to happen any time soon, or be applied to people with outstanding student loans.
Personally, I’m still for the cap, because I think the existing unlimited forgiveness benefit is a threat to the system’s future financial integrity, and could lead to a complete loss of Federal student loan forgiveness benefits for everyone. I’m just an observer here though, and I don’t have access to the program’s financials or a crystal ball, so this is merely speculation.
I do have one question for you though – which part of the PSLF “payoff” wasn’t “abundantly clear” to you going into this whole thing? As far as I can tell, all the information about how this program works is publicly available, so I’m curious to know which element came to your as a surprise?
I have a question about Navient servicing loans. A few years ago I had consolidated my student loans with Direct Loans so that I could participate in the PSFL (one of these days) and I made 2 years worth of payments on time but then I filed for bankruptcy and, by the advice of my attorney, I applied (and was granted) a financial hardship forbearance. During that time I was sent a notice that my loans would be serviced by Navient and when I asked about my payments still being credited toward my 120 PSFL payments, I was told (by Navient) that those would be credited. I keep reading that the payments have to be made to Direct Loans – is this correct? Any maybe Navient works on behalf of Direct. Maybe?
Hopefully this will help someone answer my question; this is what my current loan summary looks like:
Lender: US Dept. of Education Program: DL Consolidation Subsidized Loan ($68K Balance)
Lender: US Dept. of Education Program: DL Consolidation Unsubsidized Loan ($48K Balance)
I’m working for my local government and have had the PSFL employment certification approved, I just want to make sure that I am making payments that will be properly credited.
Thanks for any information that you can share.
Contact whoever is servicing your loans and ask them how it works. It’s the loan servicer who can answer these questions authoritatively. If you don’t like the answer you get from them (and feel like they’re interpreting your situation incorrectly), then contact the Student Loan Ombudsman Group and ask that they investigate for you, and determine what’s possible here.
I don’t know the current status of the decision to try to cap loan forgiveness at $57k (although I’m certainly going to look into it) but, as an attorney, I think it’d likely be difficult for the feds to make such a change WITHOUT a grandfather clause for existing PSLF enrollees. The reason is because the purpose of the PSLF program was to encourage professionals to pursue a career in lower-paying civil service jobs and, for those of us who made career decisions based upon the representation that our loans would be forgiven after 10 years, there’s a serious liability/detrimental reliance issue for the feds in unilaterally changing the deal. The average student loan debt for attorneys is now well-above $150k and there are more than enough attorneys out there right now (myself included) who would be willing to bring legal action to protect what the law would regard as a vested property right. For those not already enrolled in PSLF, it would obviously be a very different story.
That’s totally my understanding as well – anyone in the system (carrying any debt whatsoever) is likely to be grandfathered through and exempt from a new rule limiting PSLF forgiveness.
I think it’d be impossible for them to reduce the benefit without excluding everybody with existing debt from that reduction.
My understanding is that forgiveness under pslf is NOT considered income for tax purposes. Is that wrong? I am working towards pslf but because I’m in a low paying job and my one payments are correspondingly low, my loans have ballooned. It accumulates faster than I’m paying at this point. Thank you!
I really appreciate all of this information and this website! My wife is a Physical Therapist with 160k debt. She is on Income based Repayment and working for a non profit in her 4th year of the Public Service Loan Forgiveness. We’re really confused on what to do moving forward. If this is capped at 56k, what happens to all the interest that keeps accruing? Will her debt even go down? Also, with all the interest that she can’t write off, is it still worth it since she owes so much money? Finally, is there a way to pay down some of the 160k to bring down the interest accruing each year? I really appreciate any thoughts and insight- this process is overwhelming to say the least. Thanks again for such a useful website!
I’ve got good news for you – don’t worry about the $57k cap. That was a topic that got brought up a while back, but has not received any lip service ever since.
It’s highly unlikely that it’ll ever be implemented, and even more unlikely that it would be applied to people with existing student loans anyway.
IF the cap were instituted, your wife would almost certainly be protected from facing it by some sort of grandfather clause. So… don’t worry about that one.
You’ll need to do the math to determine whether or not PSLF will be worth it for you guys – that depends on a lot of different factors, like total debt getting forgiven, whether or not adding that to your income jumps your tax bracket, etc. You may want to speak with a tax professional to determine which option is better for you.
You can definitely pay down some of that total $160,000 to reduce interest accumulation, but only by sending in bigger payments. There’s no easy way to stop the accumulating interest, and unfortunately, compounding interest works against you in this situation.
I wish I had some better, more useful answers for you, but I think you guys are on the right track and that you’ll end up ok. Just make sure that you’re putting aside a bit of money each year for that eventually loan forgiveness tax increase and you should be fine!
Thanks so much, Tim! While we still have some questions, you are providing great feedback and a resource full of good information for an issue that is very hard to find accurate information. We have set up an appointment to meet with someone to go over some of the other questions, but are appreciative of your work- thanks again!
Just found this site. Very insightful. Thanks for monitoring this. I’ve been a federal employee (law enforcement) for almost ten years now.
I’ve been watching this issue for a long time and am not at all surprised of all the changes that have made it difficult to get this benefit. For instance, I am not on an ICR or IBR or any kind of income sensitive plan they list. I’m on a level payment plan. Why on earth would they penalize someone who tried to make bigger payments by not allowing the standard/level repayment plan to be eligible? When I started paying my loans (circa 2006), I believe I was put into a “graduated” repayment plan. I don’t see that mentioned anywhere in the pre-reqs. How does someone who was in the graduated repayment plan get looked at for PSLF?
It may not matter anyway because it appears I’m “double ineligible” for having consolidated Stafford loans (FFEL) and not a Federal Direct Loan. Am I correct on that? It’s possible my consolidated loans are Direct loans but it’s hard to make heads or tails. I don’t recall even being given a choice between FFEL and Federal Direct loans when I applied back in 2003. It was just “government loan”, please apply.
What a scam this whole thing is. Anyway, I appreciate your research on this Tim. I’ll continue to watch this site.
I think the explanation for the requirement of “income-based” repayment is to ensure that everyone pays their “fair share” of their student loan debt. It “levels the playing field” so that a guy making lots of money and a guy making only a little bit of money each pay the same percentage of their income before being able to write off their debt.
In a nutshell, it’s pretty similar to the rest of the Socialist-leading programs that have been implemented in the past few years. There’s pros and cons to the way that PSLF have been configured, but the sad part of the situation is that it’s really only useful for a small, select group of people who deliberately work the system to their advantage (since many people won’t qualify for PSLF no matter what they do).
FFEL loans are NOT eligible for PSLF, you’re right. If your loans were made under that program, then you’ll need to consolidate them under the Direct Loan Program in order to start taking advantage of Public Service Loan Forgiveness. You can find out what type of loan you have here: http://www.nslds.ed.gov/.
I hear you on the complaint – believe me, you’re not the first to be let down by the system, and you certainly won’t be the last. The best thing for you to do is get yourself onto the proper payment plan as soon as possible, and start taking advantage of the benefits that you deserve.
Thanks for the response Tim. My FFEL loans were consolidated shortly after graduation and I’ve been paying one payment ever since. In order to consolidate my loan into a Direct Loan Program I would have to have another loan to consolidate it with, correct? That’s another “catch” that will keep people like me out of receiving this.
Do you know why FFEL loans were deemed ineligible? I looked but could not find an explanation. What a kick in the ‘you know what.’
That’s a good question about consolidation a previously consolidated single loan – I am not sure if it’s possible to consolidate without having two separate loans. I would contact the Department of Education to ask that one. It doesn’t SEEM like it would be possible, but sometimes weird stuff like that is allowed.
I have no idea why FFEL wasn’t included. There’s probably a political answer to that, but I haven’t seen it explained anywhere, ever. The good news is that if Congress really does open up the Pay As You Earn plan to everyone (as Obama told them to do by December of 2015), you should be able to qualify for all the same benefits even with your FFEL loans.
I am kind of in the same boat as Kathleen.while I did not receive the 17500 forgiveness I just recently consolidated my loans to save 100 dollars per month . I thought this would be a good financial decision however I couldn’t have been more wrong! I have worked as an educator for the last 5 years and was told that you had to work at least that long in order to qualify for loan forgiveness? Well after speaking with the servers of my new loan that is untrue! My loan payments for the last 5 years should have counted! However since the consolidation process I have to start over! I am sick to my stomach! I have Been religious at calling my previous servers to see if I qualified for any kind of forgiveness and have paid my debt on time and in full. How could somebody fail to tell me I was eligible all along? Please……is there anything that can be done to count the past 5 years??
I’m sorry to hear that this happened to you. Loan servicers often can’t be trusted – firstly, because it’s in their best interest to lie to the borrower, and secondly, because many of them simply aren’t trained up and aware of all the benefit programs that are out there.
I do not know if you’ll be able to get anywhere with this, but I would speak to a lawyer if I were you. You may want to try contacting the Student Loan Ombudsman Group first (they are free, but offer legal advice for those dealing with tricky Federal student loan situations), to find out if you would even have a chance by filing a lawsuit.
You can contact the Ombudsman Group here.
I was making income-based repayment (IBR) payments while working at a 501(c)(3), and continued to do so while on active duty with the Army. But then . . . I enrolled in a masters degree (using Army tuition assistance).
Somehow, my loan servicer caught wind of my activities, and put me in academic deferment against my will. I tried to get back into repayment, but found it wasn’t so easy. So, I kept my mouth shut and went with the deferment.
So, anyway, I’ve got something like 30 payments toward my 120. But now I am off active duty and re-entering the workforce as a teacher. What I would like to know is this:
Given that I have to eat, and am not assured immediate eligible employment, if I take work with a non-eligible employer now (ie, for-profit or foreign school, etc), can I resume making IBR repayments toward my 120 when I later find a job with an eligible employer?
That is, does the present taint of private sector filthy lucre preclude me from later pursuing PSLF?
The short answer is no. You can bounce back and forth between the public and private sector, then still leverage PSLF at some point down the line. PSLF is not an all-or-nothing benefit.
Forgiveness is based on satisfying the eligibility conditions of making enough payments (120 or 240), and qualifying for forgiveness once you’ve hit that magic number.
Just be aware that any payments you make while working in the private sector won’t count.
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.
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.
It’s not clear if there’s any loan forgiveness available for military reservists. What’s available for reservists?
You can find the details about forgiveness benefits for Reservists on my page about Military Student Loan Forgiveness Programs.
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.
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.
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.
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!
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.
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.
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?
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?
As it stands now, any balance forgiven under PSLF is not considered tax-deductible income, which means that any remaining interest will not have to paid at the time of forgiveness. Can you confirm this?
I think you’ve got the right reading on that rule, but one thing to keep in mind is that everything gets worked out almost exclusively based on what your lender decides to do. I can’t confirm anything. For a real confirmation, you need to speak with whoever is servicing your loan.
Also, don’t forget that even though you’ll have the balance and interest forgiven, you will have to add the amount forgiven as taxable income on your IRS tax filing, so it’s not like it all just evaporates into thin air. Bottom line: tread cautiously.
Following up on this person’s original question…. Way down the road, once my loans are forgiven and my debt has been cancelled, what happens with the interest? Do I pay this off on my own or is this forgiven too? Do you have any more information or suggestions on this? Thanks!
Everything gets forgiven, debt and interest. However, you will end up having to add the total amount of all the money forgiven to your tax return that year as if it it were income, so you will be responsible for paying taxes on whatever gets written off. Keep that in mind when you’re planning to leverage loan forgiveness benefits, because it could end up costing quite a bit of money.
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.
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 🙁
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 =(
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!!
Are you sure you had all your paperwork in order? What is your qualifying job?
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.
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.
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.
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!
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?
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.
Yes, exactly my situation, I have been in the PSLF plan for five years now. I am 60 this month and will work till I’m 65 to get in my full 10 years of credit toward my satisfaction date. Went back to school to get my MSA so I could advance and haven’t been able to here. I have been working as an Accountant for 10 years for my city in a public service low paying job. Haven’t had a raise in 7 years, oh except for the 1 1/2 % two years ago. Accountants are being paid 60-90K where I earn $40k have 4 kids in college, single mom, and the thought of me owing on my balance on top of that after I work here another 5 years at low pay infuriates me. Please somebody make sure the Grandfathering of my 10 years till paid off will be in effect. When I retire I would still owe for a school loan. Where would that leave me?
If you’re enrolled in PSLF and you’ve already paid 5 years into it, then you just have another 5 to go. There’s been no talk about changing the rules for years… that appears to all have been political maneuvering, so you should be all set.
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.
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!
I understand the concern about the benefit of the program to those with larger loans. However, as you mentioned the doctor with 200k loan. This student has put in 4 years of medical school, 3-6 years or residency and 2-4 years of fellowship – a total of 10-15 years additional education after college – before they earn a significant income.
Lets take your example of 200k+ income. With practice expenses about 50% – their income is not much more than an engineer, pharmacist, nurse 10-15 years after their education and has been earning for those 10-15 years – and maybe raising a family. The years of sacrifice for further education and accumulation of expertise your doctor spend learning is what we want when we are sick and need a physician to get diagnosed and treated correctly. What is that worth?
And this statement “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).” is socially divisive (esp if you substitute a ” certain Race” instead of Doctors, Dentists, etc).
Just my thoughts.
I hear you and I agree that your points are valid, but I’m not that concerned about being “socially divisive”. I want to make sure that the Forgiveness programs remain funded over the long-haul. When there are big loopholes that allow certain people (especially high-income individuals) to exploit the program and end up having hundreds of thousands of dollars of debt forgiven, that’s a concern for me.
These programs were created to help people who got way over their heads into debt and have no way to ever get back out from under it. I do not believe that the intent of the programs was to help give more money to people earning 6-figure incomes. Yes, Doctors, Lawyers, Dentists, etc., accumulate a great deal of debt, and yes, their services are important and highly-valued by society, but I feel like they’re already compensated well enough.
I’m more concerned that Forgiveness is available to the single-mother of multiple children who is barely scraping by, but now facing a several hundred (or even thousand) dollar monthly student loan debt bill. SHE is the person who needs assistance from the Federal Government, and I want my tax dollars being funneled to people like HER.
I do not want to subsidize Doctors, Lawyers and Dentists. They already live in nicer houses than me, drive nicer cars than me, take more exotic locations than me, send their kids to nicer colleges than I’ll be able to afford, and make significantly more money than I ever will. Why should I pay for their education costs?
I can see helping people who needs help, avail themselves of subsidy for education to get themselves started toward a productive life. I can agree about helping people who faced undue or hardships not of their making.
However, any government help/subsidy should be applied fairly and evenly across everyone related to the cost of their education and income not just because they live in a nicer house.
Should the nurse, engineer, pharmacist, sales person, or technical worker be treated differently than HER or the doctors, Dentists and Lawyers or one of your readers that is looking to subsidize a $100k grad school education.
Maybe the student should learn the risk vs rewards for the loans – before they take on the loans – rather than spending the loans on a program that may not yield the income to repay the loan or to depend on subsidies.
Opinions aside – I appreciate the time and effort you do. Thanks.
Socially, I tend to agree with Roberto. Financially, I agree with Tim. I don’t think the program should be dictating that certain Public Servants don’t count. That is social engineering. That can be done by putting a lid on the forgiveness and or changing the IBR/PAYE so that high earners gain little forgiveness. (As a point in fact, that is what usually happens with docs. In my experience, most docs don’t enter the program at all but if they do, it’s usually after residency and being on the job for a few years. As such, by the time the 10-year window is over, the doc will have made an IBR/PAYE rate against some heavy earning years, leaving a much lower balance for forgiveness.)
Financially, I’d hope that this program can remain funded to help those at the lower incomes. We could quibble if that means that I care more (from a social standpoint) about teachers and social workers. Aside from that, this program makes great impact in K-12 and social work. I see it everyday. Applied properly, it is life changing for many.
Tim, keep up the great work.
Thank you for weighing in JZ and thank you for the kind words as well! Much appreciated!
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!!
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!!
Omg Stacy, that is terrible! Others have shared similar stories, where Direct Loans figures out ways to cheat them of forgiveness for their loans. Its just disgusting! I hope you write your congresspeople and raise hell!
Stacy, did you ever get your payment issued resolved. It seems to me that you would be able to prove that the payments you made within those two years qualify.
This has also happened to me! They better make an exception when the time comes around for forgiveness!