PUBLIC SERVICE LOAN FORGIVENESS
Get your student loans forgiven in 10 years?
What is Public Service Loan Forgiveness?
How to Forgive Student Loans in 10 Years
Did you know you can have your student loans forgiven in 10 years?
By the end of this post, you'll know exactly how to qualify for the public service loan forgiveness program. Scroll to the bottom if you'd rather watch the video.
We heavily researched the public service loan forgiveness program, so that you won't be one of the 99% of applicants who applied, but have not yet been approved.
What is the Public Service Loan Forgiveness Program?
The public loan forgiveness program is for people who work in public service and they're able to have their student loans forgiven after 10 years as opposed to the regular 20 to 25 years for people in the private sector who are on an income-based repayment.
We personally worked in the private sector and couldn't take advantage of this program, but it's a great benefit for those who can.
The public service loan forgiveness program was opened in 2007, so the first group of people who are eligible to receive forgiveness just came through in October 2017.
Check out our starter kit which includes the student loan flowchart to help guide you through the process of figuring out if you're eligible.
There are some details that you have to be aware of if you want to take advantage of public service loan forgiveness.
Are your loans qualifying?
The first thing to do is to make sure your loans are qualifying. Qualifying loans are direct loans only. You can consolidate into a direct consolidation loan from other loans like FFEL, Stafford Perkins, but you need to remember that the clock restarts whenever you consolidate. Parent loans can only be forgiven if the parent works in the public service sector and consolidates into a direct consolidation loan.
The second thing to be aware of is qualifying payments. With the public service loan forgiveness program, you have to make 120 qualifying payments. It's not necessarily ten consecutive years, it's the amount of payments that you make.
For example, if you made five years of payments and then had some payments that don't qualify for some of these reasons we'll talk about, you can pick up where you left off. You don't have to start over with another ten year period if that makes sense.
The third thing to be qualifying payment is that it has to be under a qualifying repayment plan. The qualifying repayment plans are all income driven. The pay-as-you-earn plan, the revised pay as you earn plan, the income-based repayment plan or income contingent repayment plan. The standard ten year plan counts, but any other extended payment plans, like a 20 or 25 year standard plan, do not count, so that's something to aware of.
The income contingent repayment plan is the only payment plan that allows parent loans to be on an income-based repayment, so if you do have a parent plus loan, it has to be in that repayment plan.
The fourth thing is the payments must be for the full amount shown due, so you can't do any partial payments and can't be later than 15 days after the due date.
You also have to be employed by a qualifying employer in the public service sector and you cannot have your loan in a grace period (which is the period right after you graduate), you can’t be in deferment, postponing payments or in forbearance.
What are qualifying employers?
- Government organization at any level
- Nonprofits 501-3C’s
- Other nonprofits like:
- Emergency management
- Military service
- Public safety
- Law enforcement
- Public health
But you have to make sure that you fill out the Employment Certification form at least every year but preferably every six months, just to make sure that your employer is qualifying and that you are on track to be approved for the public service loan forgiveness program.
You’ll also want to make sure you’re current on the Income Driven Repayment Plan Form, which is required to be submitted annually as well.
So, download our student loan flow chart within the starter kit now, it'll help you understand the best way to pay off your student loans the fastest.