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What Is Public Service Loan Forgiveness?

The Public Service Loan Forgiveness (PSLF) Program is part of the College Cost Reduction and Access Act, which was passed in 2007. The Act was created to help alleviate the large student loan debts many accumulate while attending college.

The effect of the PSLF program is two-fold: it helps to relieve people of federal student loan debts, while encouraging them to work in the public sector. Read on to find out more about how public service loan forgiveness works and how to qualify for the program.

How Public Service Loan Forgiveness Works

The Public Service Loan Forgiveness Program allows people who have student loans to have their loans forgiven if they work in public service jobs for at least 10 years. While some may assume that "public service jobs" only includes government jobs, the definition actually encompasses a much broader range of positions and organizations, including:

  • Emergency management
  • Public interest law services
  • Early childhood education
  • Public services for people with disabilities and the elderly

After a person makes 120 monthly payments on the eligible federal loan while working in the public sector, he or she can apply for public service loan forgiveness. If the person qualifies and is approved, the remaining balance on the loan is forgiven, which means that he or she doesn't need to make any further payments on that particular loan.

Qualifying for Public Service Loan Forgiveness

There are various types of federal loans, but only direct loans are eligible for public service loan forgiveness. However, it's possible to receive public service loan forgiveness for other federal loans if they are consolidated into the direct loan program. Loans that can be consolidated into such a program include Perkins Loans, Federal Family Education Loans, and certain nursing and health profession loans. Students can check what type of loan they have by visiting the National Student Loan Data System.

In addition to having a direct loan, the borrower must also meet other qualifications in order to be eligible for the PSLF Program. The borrower must:

  • Be employed in a public service job while making the qualifying loan payments, at the time of applying for the loan forgiveness, and at the time that the remaining balance of the loan is forgiven.
  • Follow specific loan repayment requirements, including making 120 monthly payments after October 1, 2007.
  • Make each payment for the full scheduled amount and not later than 15 days of each due date.
  • Not default on the loans for which forgiveness is being requested.

It's very important to keep track of one's eligibility for public service loan forgiveness. The Department of Education has an Employment Certification for Public Service Loan Forgiveness form and a process that helps monitor the necessary steps to apply for PSLF. Generally, the form should be submitted annually, but it's not required and can be submitted less frequently.

Getting Legal Help

If you have questions about the Public Service Loan Forgiveness Program, you may want to consult with an education attorney in your area.

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