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.
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:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
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.
Interested in refinancing student loans?Here are the top 5 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 6.65%1||Undergrad & Graduate|
|3.21% – 6.67%2||Undergrad & Graduate|
|1.99% – 7.10%3||Undergrad & Graduate|
|2.39% – 6.43%4||Undergrad & Graduate|
|3.21% – 6.69%5||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Laurel Road.
Laurel Road Disclosures
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. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
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.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of March 4, 2020 and is subject to change.
2 Important Disclosures for SoFi.
3 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
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 May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
4 Important Disclosures for Earnest.
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 3.20% APR (with Auto Pay) to 6.43% APR (with Auto Pay). Variable rate loan rates range from 2.39% APR (with Auto Pay) to 6.43% 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 June 3, 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 6/03/2020. 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 CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.8100000000000002% effective April 10, 2020.