The Public Service Loan Forgiveness Program, also known as PSLF, provides a way for some borrowers to obtain federal student loan forgiveness. Those with a qualifying full time public service job have the ability to gain forgiveness from the government. Unfortunately, the application process is difficult and time-consuming, and for those who apply, there is no guarantee of approval.
Those who are approved for the PSLF are able to If you’re going to apply for the PSLF, you’ll want to know the ins and outs of qualifying. Use this guide to learn how to apply for this federal student loan forgiveness program with the highest possibility of qualification.
The PSLF
In order to qualify for the PSLF, you must have federal student loans, as well as an income level that qualifies you for a hardship-based repayment plan. These hardship-based plans include income-based repayment, income-contingent repayment, pay-as-you-earn, and the revised pay-as-you-earn.
If you fit that requirement, you also need to make 120 qualifying payments, which would be paying on the plan for 10 years. During the course of the time you are paying on your loan, you need to be employed in public service. After 10 years of eligibility, paying your monthly payments and public service employment, you can send in your application for the PSLF.
If your application is approved, the remaining balances of your qualifying federal student loans will be forgiven.
Important Information About the PSLF
While qualifying for the PSLF is a long and arduous process, it is well worth it for those who meet the requirements. As student loan debt can be a burden that lasts well into the borrowers’ future, causing numerous setbacks in their life, the ability to have that debt forgiven should come as great relief.
Many borrowers opt for a federal repayment plan that bases monthly payments off of their income, providing relief from high monthly payments. However, these loans last for 20-30 years, taking decades for total relief to come.
With the PSLF, borrowers are able to have their debt forgiven in as little as 10 years, which ends up providing much greater relief much sooner.
It’s essential to keep in mind that if you want to qualify for the PSLF down the line, borrowers will want to focus on their income. This is a huge portion of qualification, and needs to allow them to enroll in a hardship-based repayment plan, such as the income-based repayment, income-contingent repayment, pay-as-you-earn, and the revised pay-as-you-earn. Enrollment in one of these plans is necessary for those who will want to get the PSLF.
When you enroll in a hardship-based repayment plan, you will need to have your income re-certified for the program every year. Without the proper certification, you will no longer qualify for the PSLF, as your loan will be switched to a non-hardship-based repayment plan.
Another thing that is useful for meeting requirements is obtaining employment certification, which can be obtained through studentaid.gov. While the certificate is not a requirement for the PSLF, it can help the borrower show their required 10 years of employment in the public service sector. Keeping an updated record of this employment is beneficial for proving that they meet the employment requirements.
The PSLF History
George W. Bush began the PSLF program in 2007, and Barack Obama’s Department of Education changed the requirements three times over the course of his Presidency. The current program is estimated that it will cost $12 billion over ten years, making it controversial. Many think that Donald Trump’s Department of Education will make further changes to the program, and fear what those changes could be.
Professionals who are close to hitting their 120th payment mark worry that changes to requirements could deem them ineligible for the forgiveness they have worked and planned for over 10 years.
Not only could requirements change, but forgiveness could as well. Some believe that the Department of Education will place a cap on the amount of debt that can be forgiven, leaving some borrowers with a remaining debt.
Groups Eligible for PSLF
In order to be approved for the PSLF plan, borrowers will need to work in the public service sector for 10 years. There are a number of eligible jobs in the public service sector, including types of nursing, teaching, firefighting, and first responders.
PSLF Update for 2020
In 2020, President Donald Trump announced that he wanted the Public Service Loan Forgiveness program to end, as it cost the federal government an exorbitant amount of money. However, ending this program does not end all modes of student loan forgiveness.
President Trump has proposed a modified income-based repayment plan instead. With this plan, the remaining balance of a borrower’s student loan would be forgiven after 15 years instead of the typical 20-30 years. These changes would apply to new and future loans.