Public Service Loan Forgiveness (PSLF)
Qualifying Employment: To be eligible for PSLF, you must work full-time for a qualifying employer, which includes government organizations at any level (federal, state, local, or tribal), non-profit organizations with 501(c)(3) tax-exempt status, and certain other non-profit organizations that provide public services.
Qualifying Loans: Only federal Direct Loans are eligible for PSLF. If you have other types of federal loans, you may need to consolidate them into a Direct Consolidation Loan to qualify.
120 Qualifying Payments: You must make 120 qualifying monthly payments, which typically means 10 years of payments while working for a qualifying employer.
Income-Driven Repayment Plans: Many PSLF applicants use income-driven repayment plans, which cap your monthly payments at a percentage of your discretionary income. This can make it more manageable to make 120 payments.
Application Process: After making 120 qualifying payments, you can submit the PSLF application to have your remaining loan balance forgiven. It’s essential to ensure that your employer and loan servicer have accurate records of your employment and payments.
Tax Implications: As of my last knowledge update in September 2021, loan forgiveness under PSLF is not considered taxable income. However, tax laws can change, so it’s advisable to check for the latest tax information if you’re planning for PSLF.
Certification Forms: It’s recommended to submit an Employment Certification Form annually or when you change employers to track your progress toward PSLF. This form helps ensure you’re on the right track and have the necessary documentation.
Temporary Expanded PSLF: In response to concerns about some borrowers not qualifying for PSLF due to technicalities, a Temporary Expanded PSLF (TEPSLF) opportunity was available. It provided a second chance for borrowers who may have been denied PSLF.
Please note that program details can change over time, and it’s crucial to stay updated with the latest information from the U.S. Department of Education or your loan servicer regarding the Public Service Loan Forgiveness program.
