Public Service Loan Forgiveness: Do You Qualify and Is It Right For You?

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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One of the most popular student loan programs out there is Public Service Loan Forgiveness (PSLF) — and it’s no wonder why. The program promises big rewards for student loan holders in the form of completely wiping away your debt balance.

But, as with a lot of programs, the application requirements can be confusing. Additionally, there are questions about how long the program will remain intact.

Before pursuing Public Service Loan Forgiveness, you need to ask yourself if PSLF makes sense for your financial situation. Don’t fear — we’ve made it easy for you.

Here’s what you need to know about who qualifies for Public Service Loan Forgiveness and whether it’s the right choice for you. 

EXCLUSIVE: Get our PSLF Checklist to see if you qualify.

What is Public Service Loan Forgiveness?

The Public Service Loan Forgiveness Program is a federal program designed to forgive student loan debt for employees of certain public and nonprofit jobs. It erases whatever remains of your federal student loans after you’ve made 120 qualifying payments while working for an eligible organization.

For most borrowers, this means you’ll need to work for 10 years before receiving loan forgiveness from PSLF. Of course, after 10 years of repayment, your loan balance might be a lot smaller than it was when you started. But if you owe a lot in student loans, the forgiveness that comes from PSLF could still be a huge financial relief.

To gain loan forgiveness, it’s crucial to meet all the program’s requirements year after year. Unfortunately, some borrowers have counted on PSLF only to discover — 10 years later — that they didn’t meet all the criteria. So if you’re going after this program, make sure you understand the ins and outs of the Public Service Loan Forgiveness qualifications.

You’ll also want to pay attention to policy changes to ensure the program remains intact. In recent years, for example, the Trump administration has repeatedly proposed eliminating PSLF. Although current applicants might (hopefully) be grandfathered in if the program were to disappear, there’s no guarantee it will be around forever.

If you’re interested in influencing policy, contact your elected representatives to let them know how you feel about PSLF. You can even follow legislation related to student loans by using our bill tracker.

What are some Public Service Loan Forgiveness jobs?

Although people ask about Public Service Loan Forgiveness jobs, the more important question would be about Public Service Loan Forgiveness employers. The Public Service Loan Forgiveness program is available to employees of:

  • Federal, state, local, or tribal government organizations
  • A 501(c)3 nonprofit
  • A not-for-profit that’s not 501(c)3 designated but meets other requirements related to public service
  • AmeriCorps, in a full-time capacity, or the Peace Corps

What your specific job is typically doesn’t matter, just so long as the organization or agency falls into one of the above categories. However, if you perform work of a religious nature as part of your job at a qualifying organization, that does not count toward the total hours.

You also don’t need to work for the same employer during the entire 120-month period. However, you must work an average of at least 30 hours per week each year, or at least the number of hours that your employer considers to be full-time work.

Public Service Loan Forgiveness qualifications: Which student loans are eligible?

Loan eligibility is another area in which you have to be careful. Not all federal student loans qualify, so be sure that yours meet the requirements.

Public Service Loan Forgiveness eligible loans are:

  • Federal direct subsidized Stafford/Direct loans
  • Federal direct unsubsidized Stafford/Direct loans
  • Federal direct PLUS loans
  • Federal direct consolidation loans

Note that all of the above loans originate from the direct loan program. Perkins loans and Federal Family Education Loans (FFEL) are not eligible for forgiveness.

Yet, there is one exception to loan qualification: If ineligible loans have been consolidated into a direct consolidation loan, then they will become eligible. However, only payments made toward the new direct consolidation loan will count toward your 120 payments. As a result, you need to be careful not to “reset the clock” on your qualifying payments by consolidating loans that were already eligible for PSLF.

Also keep in mind that although Perkins loans don’t qualify for PSLF, they can be eligible for other loan forgiveness programs, including Perkins loan cancellation.

What are the requirements for eligible payments?

Unfortunately, there’s another set of Public Service Loan Forgiveness qualifications to be aware of: having your loans on an eligible repayment plan.

The payment plans that qualify are:

Note that the Standard repayment plan technically qualifies as well, but since this plan spans only 10 years, you wouldn’t have any balance left to forgive after 120 qualifying monthly payments. As a result, you’ll need to switch to an income-driven plan to get forgiveness from PSLF.

No matter which plan you choose, you’ll need to have made 120 monthly payments on time and in full to qualify. Additionally, only payments made after October 1, 2007, count as qualifying payments.

How to stay on track for PSLF

Since this program began in 2007, the first cohort was evaluated for PSLF in 2017. Unfortunately, some borrowers learned too late that they weren’t actually eligible for forgiveness. To make sure you don’t find yourself in this situation, here are some important steps to take.

First, complete the Employment Certification for Public Service Loan Forgiveness form each year. This form verifies that your employment is eligible under the program, and parts of it will need to be filled out by your employer. While submitting it on an annual basis isn’t a requirement, it is helpful for your servicer to track your eligibility.

If you or your employer is unsure about any aspect of the program, consult the guide compiled by the Consumer Financial Protection Bureau for answers to your questions.

Once you submit your application, keep in mind that at that time you’ll need to be working at one of the qualifying organizations above. Also note that you’ll have to submit everything at once — your whole 10-year employment history. Having filled out the employment form and tracked your payments each year can help the Department of Education make a decision faster.

Make sure to keep copies of your form each year. You should also keep copies of pay stubs and W-2 tax forms in case you need them for verification later.

Is Public Service Loan Forgiveness right for you?

Before you decide to go all in with this program, be sure to consider how much in student loans you might have left to be forgiven after 10 years of repayment.

This program is most valuable if you have high loan balances relative to your salary. If your loan balances are low, however, then it’s unlikely that you’ll have much of your debt remaining to be forgiven after a decade has passed. Likewise, if you earn a lot and don’t qualify for reduced payments, you might have already paid off most or all of your loans in 10 years.

You can figure out where you stand by comparing different student loan repayment plans and calculating what your remaining balance will be after 120 payments. Our Public Service Loan Forgiveness calculator helps you estimate how much you could save through the program. Keep in mind, this calculator serves only as an estimate and doesn’t guarantee your eligibility or the amount of debt to be forgiven.

Along with crunching the numbers, don’t forget to take your career plans into account. If you’re drawn to a career in public service, this program could be the right move. On the other hand, it’s probably not worth committing a decade of your life to a career path that’s not the right fit just for the sake of loan forgiveness.

And if PSLF doesn’t seem like such a good idea on closer inspection, then check out other options for student loan forgiveness, as well as strategies to may repayment easier or cheaper, such as refinancing.

17Rebecca Safier and Jeffrey Trull contributed to this article.

Interested in refinancing student loans?

Here are the top 6 lenders of 2020!
LenderVariable APREligible Degrees 
1.89% – 6.66%1Undergrad
& Graduate

Visit Splash

1.89% – 5.90%2Undergrad
& Graduate

Visit Laurel Road

2.25% – 6.09%3Undergrad
& Graduate

Visit SoFi

1.99% – 5.64%4Undergrad
& Graduate

Visit Earnest

1.98% – 8.55%5Undergrad
& Graduate

Visit Lendkey

2.39% – 6.01%Undergrad
& Graduate

Visit Elfi

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.

The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.

To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of October 1, 2020.


2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.

KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

This information is current as of September 9, 2020. Information and rates are subject to change without notice.
 


3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 2.99% APR to 6.09% APR (with AutoPay). Variable rates from 2.25% APR to 6.09% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.25% APR assumes current 1 month LIBOR rate of 0.18% plus 2.32% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 

4 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.

© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


5 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 10/15/2020 student loan refinancing rates range from 1.98% APR to 8.55% Variable APR with AutoPay and 2.99% APR to 8.77% Fixed APR with AutoPay.

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.