What is the Public Service Loan Forgiveness (PSLF) Program?
The Public Service Loan Forgiveness (PSLF) is a federal program designed to provide relief to borrowers who work in qualifying public service jobs and help them manage their student loan debt. The program was established under the College Cost Reduction and Access Act of 2007 to encourage borrowers to pursue careers in public service.
The PSLF Program offers forgiveness of the remaining balance on your Direct Loans after you make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer. This usually takes around 10 years to achieve.
Why Should I use Chipper to Apply?
The Chipper app helps borrowers enroll with confidence with a step-by-step process.
Borrowers are often rejected for a multitude of reasons including missing or incomplete information on the Employment Certification Form, not being on a qualifying repayment plan, making non-qualifying payments (e.g., while in deferment or forbearance), failing to maintain full-time employment, and submitting the forgiveness application before making 120 qualifying payments.
Chipper helps borrowers check all of the required boxes without the headache. We’ll help you:
Ensure you’re on a qualifying repayment plan
Track qualifying payments
Confirm employment eligibility
Gather signatures from your past and present employers
Complete all ECF forms to the standards of the Department of Education
Securely submit your application
Providing guidance along the way
Keep you update on any changes to the program that affect your qualifying payments and eligibility
Who qualifies for PSLF?
To qualify for PSLF, you must be an employee of a federal, state, local, or tribal government or a not-for-profit organization, make 120 qualifying payments on your direct loans, and work full time for that employer. Additionally, you must be on a qualifying repayment plan.
What loans are eligible for PSLF?
Only Direct Loans are eligible for PSLF. However, loans from the Federal Family Education Loan (FFEL) Program and the Federal Perkins Loan Program may become eligible if they are consolidated into a Direct Consolidation Loan.
What is a qualifying payment for PSLF?
A qualifying payment is a payment that you make after Oct. 1, 2007, under a qualifying repayment plan for the full amount due as shown on your bill, no later than 15 days after your due date, and while you are employed full-time by a qualifying employer.
You must be on an approved repayment plan and pay the full amount due on your bill. Alternatively, it can be when you're on certain approved deferments or forbearances.
Thanks to the CARES Act, periods when loan repayment was paused but you continued working still count towards your 120 payments. You just need to certify your employment for those periods.
Your 120 payments don't have to be made in a row. If you work for a non-eligible employer for a while, you won't lose credit for past payments.
Does the 120 qualifying payments have to be consecutive for PSLF?
No, the 120 qualifying payments do not have to be consecutive.
Why must I be on an Income-Driven Repayment (IDR) Plan to be eligible for Public Service Loan Forgiveness (PSLF)?
Being on an Income-Driven Repayment (IDR) plan is a requirement for Public Service Loan Forgiveness (PSLF) for several reasons:
Affordable Payments: IDR plans base your monthly payments on your income and family size, making them more affordable. This is crucial for those in public service careers, which often have lower salaries compared to the private sector.
Alignment with PSLF Goals: PSLF aims to encourage individuals to enter and continue in public service careers. IDR plans support this goal by making loan repayment manageable alongside the typically lower salaries in public service.
Ensuring Consistent Payments: IDR plans often result in lower monthly payments, increasing the likelihood of consistent, on-time payments. This consistency is essential for meeting the 120 qualifying payments required for PSLF.
Long-term Relief: Since IDR plans extend the repayment period, they align well with the PSLF’s 10-year (120 payments) forgiveness timeline, offering a clear path to loan forgiveness for public servants.
What happens if I switch jobs?
If you switch to a job that is not with a qualifying employer, you will not lose credit for payments you have made previously, but you won't make any qualifying payments until you're working for another qualifying employer.
Is the amount forgiven under PSLF considered taxable income?
No, according to current law, the loan amounts forgiven under PSLF are not considered income for tax purposes.
Can I make larger payments to qualify for PSLF sooner?
No, making larger payments does not advance your eligibility for PSLF. Only one payment per month counts toward the required 120 payments.
How long does the forgiveness process take for PSLF?
The process time can vary. After you submit your application, it's highly recommended to continue making payments until you're notified that your loans have been forgiven. In order to be forgiven there must be 120 eligible payments (equal to 10 years) made towards your loans
Does a deferment or forbearance period count toward my PSLF payments?
No, periods of deferment or forbearance do not count toward the 120 qualifying payments.
Can I apply for PSLF if I'm in default on my loans?
Defaulted loans are not eligible for PSLF. You can take advantage of Fresh Start to get out of default status. Then you'll regain the ability to enroll in an Income-Driven Repayment plan and apply for PSLF.
Does part-time work for a qualifying employer count towards PSLF?
It may, if you worked multiple part time positions concurrently for eligible employers and the combined number of hours you work for each employer equals at least 30 hours per week you could be eligible
For example, if you worked for one qualifying employer for 15 hours per week and you concurrently worked for a second qualifying employer for 20 hours per week, this would meet the 30 hours per week minimum requirement.
I am a teacher who does not teach over the summer break. If I make payments during the summer, do those payments count toward PSLF?
Summer payments will count towards Public Service Loan Forgiveness (PSLF) if:
You have an employment contract lasting at least eight months.
You average 30 work hours per week during this contract.
Your employer recognizes you as a full-time employee even during summer break.
The payments meet all other PSLF conditions.
If you meet the above requirements then when filling the PSLF, include the summer break dates in your employment period, even if you don't teach then.
If I’m employed by a 501(c)(3) organization, but I work outside the United States, would the employment qualify under the PSLF Program?
Yes. Full-time employees of 501(c)(3) organizations may perform their work anywhere.
After I submitted the PSLF form, I was notified that I now have a new servicer for my federal student loans. Why did my servicer change?
Mohela administers PSLF for all Direct Loan borrowers. As a result, if you submit a PSLF form and it is determined that your employment qualifies, all of your Direct Loans as well as any of your FFEL Program loans that are held by the U.S. Department of Education will be transferred to the Mohela.