The 5 “Qs” of Public Service Loan Forgiveness

#StudentLoanForgiveness. It’s a hashtag now, so you’ll all pay attention, right? Everyone wants their student loans forgiven. The perception is that very few qualify for any forgiveness programs. But did you know that there is one broad, employment-based forgiveness program for federal student loans? Most people don’t, or misunderstand how it works. Let me break down some key points of the Public Service Loan Forgiveness Program to help you figure out if you could qualify.

10.31 How to Determine if You Qualify for Public Service Loan Forgiveness

Can you check the all the boxes?

[ 1 ] Work in “Qualifying Employment”

First, you need to work in “qualifying” employment; that is, you must work in “public service.” But what does that mean? Everyone seems to have a different definition. Ours is based on who employs you, not what you do for your employer. The following types of employers qualify:

  • Governmental organizations – Federal, state, local, Tribal
  • Not-for-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code
  • A not-for-profit organization that provides some specific public services, such as public education, law enforcement, public health, or legal services

The following types of employers do not qualify:

  • Labor unions
  • Partisan political organizations
  • For-profit organizations

[ 2 ] “Qualifying Employment Status”

If you work at one of these types of organizations—great! That’s the most difficult criteria to meet. Next, you need to work there in a “qualifying” employment status, which means that you must be a full-time employee of the organization. Full time, for our purposes, generally means that you meet your employer’s definition of full time or work at least 30 hours per week, whichever is greater.

[ 3 ] Have a “Qualifying Loan”

A “qualifying” loan is a Direct Loan. It’s that simple. Of course, it’s the government, so nothing is actually that simple. You see, there are (or were) three big federal student loan programs:

  • The Direct Loan Program, which is now the biggest program,
  • The Federal Family Education Loan (FFEL) Program, which is what many students borrowed from until mid-2010, and
  • The Federal Perkins Loan Program, which is a relatively small program.

You may have loans from just one of these programs, or you may have borrowed from all three. If you’re not sure which loan program you borrowed from, I can’t blame you—I had 20 separate loans by the time that I finished graduate school! You can use the National Student Loan Data System to determine which program you borrowed from. Here’s a tip from me to you: basically, if you see “Direct” in the loan type name, it’s a Direct Loan. Otherwise, it’s not.

Don’t have a Direct Loan? Don’t despair! You can consolidate your other federal student loans into a Direct Consolidation Loan and qualify that way. Not having a Direct Loan is the biggest reason that borrowers who are seeking Public Service Loan Forgiveness aren’t on the right track, so be sure that all of your loans that you want forgiven are Direct Loans before you proceed to the next step. If you do need to consolidate, be sure to check the box in the application that says that you’re consolidating for the purposes of loan forgiveness. It will make your life easier, I promise.

[ 4 ] Have a “Qualifying Repayment Plan”

Next, you need a “qualifying” repayment plan. All of the “income-driven repayment plans” are qualifying plans for Public Service Loan Forgiveness. So is the 10-year Standard Repayment Plan, but if you’re on that repayment plan, you should switch to an income-driven repayment plan straight away, or you will have a drastically lower loan balance left to be forgiven after you meet all of the criteria.

If you’re consolidating your loans, you can apply for an income-driven repayment plan in the consolidation application, but if you don’t, you will be placed on the Standard Repayment Plan for Direct Consolidation Loans, which is almost never a qualifying repayment plan for Public Service Loan Forgiveness. If you already have Direct Loans, you can submit an income-driven repayment plan application on StudentLoans.gov.

[ 5 ] Make 120 “Qualifying Payments”

Lastly, you need to make “qualifying” payments—120 of them. A qualifying payment is exactly what you would expect it to be. You get a bill. It has an “amount due” and it has a “due date”. Make the payment in that amount by the due date (or up to 15 days after), and the payment is a “qualifying payment”. If you make a payment when you’re not required to—say, because, you’re in a deferment or you paid your student loan early—then that doesn’t count. But if you reliably make your payment every month for 10 years, you should be okay. The best way to ensure that your payments qualify is to sign up for automatic payments with your loan servicer.

Note that these payments do not need to be consecutive. So, if you had made 10 qualifying payments, and then stop for a period of time (say, you go on a deferment), then start making qualifying payments again, you don’t start over; instead, you pick up where you left off.

And, I’m sorry to have to mention a seemingly arbitrary date, but a payment only qualifies if it was made after October 1, 2007, so nobody can qualify for Public Service Loan Forgiveness until 2017 at the earliest.

Ok, so do I qualify?

Now that you have the details, let me explain how all of the criteria work together. For any payment to count toward Public Service Loan Forgiveness, you need to meet all of the criteria when you make each payment. Stated differently, you need to be working for a qualifying employer on a full-time basis when you make a qualifying payment under a qualifying repayment plan on a Direct Loan. When you break these criteria down separately, it seems simpler. It’s when you try to pack it into one sentence that it seems overwhelming.

As much as I’d like to think that all of you now have a perfect understanding of this program and how it works, I know all of you are thinking—“okay, but do I qualify?” Here’s how you find out. Download this form. Fill it out. Have your employer certify it. Send it to FedLoan Servicing (one of our federal student loan servicers), queue up How I Met Your Mother on Netflix, and wait for an answer. FedLoan Servicing will do the following:

  • Check whether you have any qualifying loans.
  • If you have qualifying loans, validate that your employment qualifies. If none of your loans qualify, they’ll tell you so.
  • If your employment qualifies, they will send you a letter confirming that your employment qualifies. Then, any of your federally held loans that are not serviced by FedLoan Servicing will be transferred to them so that we can keep better track of your loans and payments for Public Service Loan Forgiveness. If your employment doesn’t qualify, they’ll tell you so.
  • After your loans are transferred, they will match up the dates of employment on the form that you submitted to the payments you made during that time and determine how many qualifying payments you made. You’ll receive a letter with a count of qualifying payments and an anticipated forgiveness date (which assumes that all your future payments also qualify).

It’s after you get this payment count back that you’ll know whether you’re on the right track. So, it really is a good idea to submit this form early and often. We recommend that you submit the form once per year or when you change jobs. The beauty of submitting these forms early and on an ongoing basis is that it means that you won’t have to submit 10 years’ worth of them when you ultimately want to apply for forgiveness. It also means that when you apply for forgiveness, that you’ll be able to do so with confidence that you qualify for it.

One more piece of good news: Public Service Loan Forgiveness is not considered income by the IRS. That means that it’s tax-free.

Ian Foss has worked as a Program Specialist for the Department of Education since 2010. He’s scheduled to be eligible for Public Service Loan Forgiveness on October 6, 2021, if all goes according to plan.

40 Comments

  1. While this program has some merit, there should be some dollar limitation on the amount forgiven as well as the number of degrees one can borrow for, otherwise it provides a perverse incentive to remain perpetually enrolled in school while borrowing the maximum amount possible and using all the overage to pay for non-education related expenses/purchases. As a financial aid administrator I can attest that this does happen despite our best efforts to prevent it.

    If someone is on an income based plan and in line for public service forgiveness, why do we let them pursue more than one degree and borrow even more?

  2. What I find astounding is that the private public universities are not being held responsible for this debt. There was a time when college was affordable even for a working class kid attending an ivy league school. These so-called “institutions of higher learning” are nothing more than corporations with little to no interest in the student or professors. Their main goal is profit and they driven up tuition at both undergraduate and graduate schools tremendously over the past forty years. In this society, an American should be able to attend any institution and not graduate owing a mortgage.

  3. 1. The federal government spent billions rescuing the banks, car companies and other financial institutions.
    2. Millions of legal and illegal immigrants got a free ride from the system, college grants, not paying medical bills and income taxes.
    3. Most of the people who are paying (or not paying) student loans are paying income taxes.
    4, Given the above and probably a dozen other examples how is wiping out the student loans any different?

  4. If you make the loan, it is your responsibility to pay the taxpayers who provided the money for the loan back. It is called being responible and trustworthy. If you do not pay the loan back, it is called theft, stealing from the taxpayers. A high school graduate should be expected to make informed decisions.

    • Sad to see people making comments like this. Maybe you’d like to pay back the loans for all these people who are genuinely trying to work and pay them back? No? Go back to your privileged life and pray you don’t need someone in the social service field with your attitude.

      • Exactly. Some people don’t stop and think about how people become very ill. Too sick to work and on a fixed income, there is no way to paying on these loans. They are not in these people’s shoes, which is why they are acting that way. And they ought to be a shame of themselves because one day it will come to haunt them. They will one day need taxpayer’s help to survive.

    • Carol do you realize that college is the only way people can get a decent paying job and even with a Master’s DEgree + I will be in debt for the rest of my life just so I don’t have to live off of welfare. I teach America’s future, and I don’t get paid near enough for what is required of me day to day. So this is not about making informed decisions, I made informed decisions, but I shouldn’t have to pay for it until the day I die!

  5. It sucks to be in debt to your eyeballs! These foreign educated professionals don’t owe any college loans. Make really good money. Let’s ask them how they managed going to college, and NO student loans. I heard they have college insurance plan that takes care of college tuition. Is that not possible here?

  6. I have a Master’s degree, I manage a nonprofit, and I’ve got a $90k student loan bill. The Dept of Ed wants me to pay them over $650 a month. To qualify for this forgiveness, I must pay $650 for ten years without being late or missing a payment. But I work for a nonprofit. That’s the whole point. I can’t afford to pay this $650/month bill because public servants are laughably underpaid. Those of us who struggle the most will never hope to qualify for this forgiveness plan. I made a mistake in thinking that acquiring a high degree would earn me a high enough-paying job to repay my debt. I was wrong. I should have gone to trade school. Now I have to consider leaving a job I truly adore to enter the private sector just so I can hope to make enough money to pay this $650/month bill. But then… I’ll never qualify for this program. Eternal debt for me, either way, no matter what I do.

    When I was 18, I was taught you HAVE to go to college, and you have to go to the BEST college. I went to private school, UGH! So stupid! I wish people were having this conversation 12 years ago when I was still in high school. I wish someone had told me it’s okay to go to trade school, or skip college altogether. We weren’t having this discussion yet. I didn’t know what I was getting myself into. I was a teenager. I believed what adults told me. Now, adults should be telling kids to wait, slow down, choose carefully, and hey, it’s okay to not go to college at all. You’ll probably end up with more money at the end of your life by having no degree at all.

    • It works mine were forgiven contact Dept of Ed and ask questions they will help with paperwork. Be encouraged they can also tell about reducing payments.

    • It is my understanding that you can apply for a reduced payment or “income sensitive” payment plan. I have around $130K in student loans and now work as a high school science teacher, after realizing that I might be a great physician, but I am terrible at running a business and dealing with paperwork.

      Obviously I can’t afford my monthly payments, but I can sure benefit my students with the knowledge that I have gained over the years.

      I think this is the life blood of this program and there are ways to make it work for people, even if it isn’t there from first glance.

      • Hello,

        First off I am a student loan Advisor, I see the worst of the worst. I know some people are going to say that my opinion may be biased. First thing I want to point out there are many companies out there willing to help you out for a fee. I work for one of the companies but I won’t say which one to keep my post unbiased. In many people’s cases there student loan debt is about the size of their mortgage and have absolutely no clue what is going on with their loan. You all need to educate yourself fully since these decisions can affect your life for the next 20 years or so. First off, everyone needs to consolidate their loans into one of the federal programs to get lower payments. This is a similar process to getting your taxes done, you can do it yourself for free. If you have the proper knowledge and know all the in’s and outs of the programs then do it yourself. If you are like most people and have no idea what is going on then seek professional help. These programs are great but there are down sides as well that a professional will be able to break down for you like the responsibilities that you take on when signing up for one of the federal programs. When you do it yourself you get no help and no advice, remember your servicer is a debt collector and will not generally work in your favor. I see it all the time where people qualify for these federal programs and the servicers do nothing to help the student out. They put them into deferment/forbearance and let the interest accumulate. The bottom line is there are great programs available but get professional help just like you do for your taxes.

  7. I don’t believe anyone is standing over you a gun if you didn’t sign those student loan agreements; the same for signing a car loan or a house mortgage. If you don’t think you can pay it back in a timely manner after college, then don’t sign it. There is also no reason to expect taxpayers to bail out anyone who can’t pay back a student loan, just as they should not help pay bail out an overpriced home mortgage for which you foolishly took out a loan. You signed it; it’s your problem. The world needs computer technicians, IT people, carpenters, construction people, auto mechanics, locksmiths, chefs, nurses and medical technicians just as much (if not more) than it needs college grads with useless degrees … and most of those other trade/technical careers can be accomplished with a 6 to 12 month technical vocational education program, in many cases with enough free financial assistance cover the whole thing. Many people in those skilled trades end up making as much and sometimes more than useless college grads, while providing a valuable skilled service to the world at the same time. The greatest fallacy crammed down the throat of America’s youth since 1945 is that college is the only means to success and a comfortable lifestyle, it is not.

    • Lenders take advantage of naive and eager 18-year-olds who have no idea the impact signing those agreements will have on the rest of their lives. Dangle a carrot in front of a teenager’s face and they will believe whatever you say, and then they find themselves in their late 20’s with more debt than they can ever hope to pay off in their lives. Blaming teenagers is not the answer. The answer is to provide them with more information and with realism before asking them to make massive life decisions on their own.

    • However Joseph, the difference between a car loan and a mortgage is you know how much you are agreeing to pay. Student loans don’t work like that. They are low interest loans, but there is no re-payment fee schedule, so when student loans are taken out no one tells you what the repayment will be until it is time to repay. Further, if you ask for that information it is not available. Just saying!

  8. I am about to send three kids through college, we don’t qualify for federal grants, but we have got almost nothing saved up for retirement, and having read about the disadvantages facing college graduates with loans, (cannot qualify for home mortgage, living with their parents..) I am definitely taking advantage of the community college route with transfer to a local state school. Also, unless the kids plan on studying something that has high returns, like medicine, I am careful of just letting them attend any graduate school program for full price. The key is to pick a good major, if not then double major with something practical. Also, we need more apprenticeship programs in this country as a viable route to do just about anything, not just plumbing. It used to be you could be a judge without going to law school. For now, if your kids want to get into STEM, you are in luck, because graduate school in engineering can be free, if you find an adviser who wants you to work for him in the lab. Better yet, try to get a graduate fellowship: My husband has a Phd. from MIT, all of which was paid for with a fellowship, and a living stipend, while he worked for a professor and got this amazing education for nothing!

  9. I have a PLUS loan for my daughters education. She graduated in 2003 and I paid on the loan until two years ago. I’m retired and have no pension other than Social Security. I’ve had to get a deferment paying only the interest.
    Where’s the help for me?

    • If she graduated in 2003 then she should pay it not you! You did your part then now it’s her turn. And if you disable you can get out of paying

  10. It is sad that you are expected to work for the government or non-profit – neither of which contribute to the economy.
    What is the government and non-profits going to do when we all leave the private sector and no taxes are generated?

      • Why should they? If someone borrow money, they should repay it.

        If they knew they could not pay it back, then perhaps they should have taken a different path in their education – Say, serve in the military for 3 years; get the GI Bill benefits and go to a less expensive state college or community college

        • I have a friend that served in the military witnessed his friend get killed because the humbee (esp?) they were in blew up. He’s been trying to finish his Bachelor’s for years and hasn’t been able to because he went thru so much stuff in Iraq. So based on that, what you’re telling me is that poor people should send their children to get killed in senseless wars so that MAYBE they can come back to be treated like crap because they are disabled, forced to get medical treatment at probably the lowest rates hospitals and not be able to finish a degree due to their PTSD? But it’s okay for people like Donald Trump to declare bankruptcy over and over again and to have his business debts paid by the taxpayers? Are you kidding me?

    • You make a good point, however you must realize that the forgiven balances are a direct injection of money into the economy. The borrowers will have cash flows freed up to buy houses, cars, go on vacation, etc.
      These borrowers are not like welfare recipients. They are 1)w orking (at placesike hospitals in underserved areas)
      2) Paying on their student loans for at least 10 years. They’re not deadbeats, they are responsible debtors.

      Doesn’t mean you’re wrong, it’s just not as simplistic as you’re making it out to be.

      • Furthermore, the deadbeats with $1trillion worth of debt are the people society relies most upon, teachers, cops, firefighters, planners, doctors, accountants, health workers etc. where would all of the people on this list decrying the forgiveness of loans be without these people? For shame.

  11. I am disable. Rated as totally and 100% by the VA. I need to cleanup my credit rating. I am asking if, or not you can help me get my student Loans forgiven.

    • Hi I am also 100% rated disabled by the Va. You are entitled to have your student loans waved, as mine were. You need to contact the Va and asked them about this program that’s available the vets. Hope this helps, if you need more help email me at jerryf36@yahoo.com.
      Good luck

  12. I’m a contractor to the Bonneville Power Administration, which is part of the U.S. Dept. of Energy. My employer only contracts to BPA and I work only for them. Do I qualify as a federal worker?

  13. If student loans are to be forgiven it is not fair to the parents who struggled to pay for their kids college. We depleted our savings and use some of our retirement money to get our kids through college, this is disgusting and totally inappropriate to think loans will be forgiven. First we get screwed because we paid for college then we get screwed again because the government will not receive the loan payments and that trickles down to less money and higher taxes!

    • Bob, I totally agree. My kids paid “full price” for their tuition. They had legal immigrant friends who got full rides based on their status. I, as a teacher, wasn’t poor enough, or rich enough to get aid. We are the wrong color…..I am not racist. This system is broken. Now we’re going to forgive billions of dollars in loans for people who are likely not using what education they got. It’s like we’re paying and paying and paying. People need to be responsible for their debts and decisions.

      • Linda: whenever you feel the need to add “I am not a racist” to your comment, guess what? It usually means you ARE a racist, dearie.

        • I’m with Bob – regardless of if he is or isn’t racist doesn’t get away from the point that he is right the system is so beyond broken and wrong. Many of the people on there are 1st generations born in the USA. They had to see their parents struggle, work 2 jobs each, learn the ENGLISH language, and PAY their taxes. NO IFS ands or BUTS! To see people get free rides is disgusting. This is why the USA is losing its edge, people are fat and lazy here in the USA now and have an open hand instead of using their brains and working hard.

    • Well for an individual that paid for my education all on my own. Without any help from parents!!!!!!!!! I have been paying my student loan off for 20 years and the balance hasn’t decreased. So something has to give at this point I paid this loan off 10x over due to interest and fees. IS NOT FAIR!!!!!!

    • Well the debt should be taken up by your kids now if they benefitted from education. Sending kids to college is something planned and I am sure you got some of the “FREE” grants

  14. Folks I mis-read the payments in terms of the plan. My loans were on 30 year repayment plan from the beginning – long story. I thought all the payment I made would count towards the 120 but until did Income based repayment plan that wasn’t the case. Lost about 3 years of payments. Would be sure to file these other forms for one of those payment plans because I just added about 2+ years to the time I’m paying.

    Gary

  15. I was looking at the student loan forgive criteria on the website, I’m not sure if I qualify. I am a licensed veterinary technician and I work full-time (40 hrs/week), and I have a part time (15-20 hrs/week) at a nursing home. Are there any programs that would help me with student loan repayment or student loan forgiveness? I feel like I am drowning in debt. I make $12.50/hr at the vet clinic, it barely covers living expenses.
    If there is anything that can help my situation please let me know.
    Thank You.
    Carol Anderson
    806 Plecity Ave
    Valley City, ND 58072
    carola@csicable.net

    • Carol – you could get loan forgiveness by working for a Non-Profit, tax exempt veterinary clinic (or a animal shelter) or nursing home or hospital full-time; or you could work for the government – even a college I think. You have to sign up for the income contingent repayment plan -this plan may help you even if you don’t work for a non-profit, as it will lower your payments based on your income.

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