What is Public Service Loan Forgiveness?
There are a number of programs designed to help you manage your student loan debt while pursuing a career in public service. We estimate that 25 percent of the U.S. workforce is employed by a public service employer and many may be eligible for existing student loan repayment benefits, including Public Service Loan Forgiveness. We’re asking public service organizations to take a pledge to help tackle student debt.
Public Service Loan Forgiveness (PSLF) is available to many employees working in public service and at all levels of government—states and municipalities, school districts, public hospitals, non-profit organizations, and more. Understanding the various programs and how they best work together will help you get the largest possible benefit
Step 1: Understand your options
For most public service employees, enrolling in the Income-Based Repayment (IBR) plan will ensure maximum savings. If you have federal student loans and can show partial economic hardship, you can cap your monthly payment at a percentage of your discretionary income through IBR. IBR is a great way to keep your monthly payments low while continuing to make progress toward the 120 on-time qualifying payments needed for Public Service Loan Forgiveness (PSLF).
Only federal Direct Loans are eligible for PSLF. However, if you have other federal loans originated under the Federal Family Educational Loan (FFEL) program or the Perkins loan program, you may be able to consolidate those loans into a new Direct Loan to qualify. You can learn out more about what type of loan you have through the National Student Loan Data System (NSLDS), available at www.nslds.ed.gov.
Tip: If you have a Perkins loan you may have access to other benefits and consolidating your loans may jeopardize your eligibility.
Step 2: Enroll and certify
Once you know which programs are best for you, early enrollment is critical to achieve maximum savings. In order to benefit from the Public Service Loan Forgiveness (PSLF) program you must:
Enroll in a qualifying payment plan. Generally, payments at or above the 10-year standard repayment plan qualify for PSLF, but you will likely pay off your entire loan before you are eligible for forgiveness under the standard plan. Reduced monthly payments made under IBR qualify for PSLF and will maximize savings. To get started on IBR, contact your servicer or enroll online.
Certify that you work for a qualified public service employer. Use the Employment Certification for Public Service Loan Forgiveness form to keep track of your eligible employment and qualifying loan payments.
You will need your employer’s help to complete the certification form. Complete sections one and two on your own, then ask your employer to complete and sign section three before you submit the form. Some employers may already have an established process for submitting this form. You should check with your employer for more information.
Step 3: Follow up with your servicer
After the form is complete, submit it to your servicer and be sure to follow up. It is likely that the organization servicing your loan will change. Each year, you should resubmit the Employment Certification for Public Service Loan Forgiveness form so that you can keep track of your qualifying payments and make sure you stay on the road toward loan forgiveness.