Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness (PSLF) is a United States federal loan forgiveness program administered by the U.S. Department of Education. It is designed to forgive the remaining balance on Direct Loans for borrowers who have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Key Components of PSLF:
- Qualifying Loans: Generally, Direct Loans are eligible for PSLF. Parent PLUS loans, Federal Family Education Loan (FFEL) Program loans, and Perkins Loans are not directly eligible but may become eligible if consolidated into a Direct Consolidation Loan.
- Qualifying Employment: Employment with U.S. federal, state, local, or tribal government organizations, or not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or other not-for-profit organizations that provide certain types of qualifying public services, is considered qualifying employment.
- Qualifying Payments: Payments made under a qualifying repayment plan (such as income-driven repayment plans) while employed full-time by a qualifying employer count towards the 120 payments required for forgiveness.
- The PSLF Waiver: In October 2021, the U.S. Department of Education announced a limited-time PSLF Waiver, which temporarily allowed more borrowers to receive credit for past payments that previously did not qualify for PSLF. This waiver significantly expanded eligibility for forgiveness.
How to Apply for PSLF:
To apply for PSLF, borrowers typically need to complete and submit the PSLF Certification Form (also known as the PSLF Form). This form certifies your employment history with qualifying employers. Once you have made 120 qualifying payments, you can submit the final PSLF forgiveness application.
Importance of PSLF:
For many public servants, such as teachers, government employees, and non-profit workers, PSLF offers a significant opportunity to reduce or eliminate their student loan debt, making higher education more accessible and sustainable for those in vital public service roles.
Sources:
- U.S. Department of Education Federal Student Aid website.