The Facts on Public Service Loan Forgiveness (PSLF)

We recently hosted a webinar on Public Service Loan Forgiveness (PSLF), a program that forgives loan debt for those working in public service after 10 years of repayment. The webinar reviewed the types of employment and loans that qualify for PSLF, the process of applying, and some additional news on the program. We summarized the main points from the webinar below, but we encourage you to watch it in full, which you can do on our website here anytime.

The concept behind Public Service Loan Forgiveness (PSLF) is fairly simple: make 120 eligible payments on eligible loans while working for an eligible employer. Here's exactly what that means.

To be eligible for PSLF, the loan must be a Federal Direct Loan. The Federal Direct Loan can be a Subsidized or Unsubsidized Federal Direct Student Loan, a Federal Direct Grad PLUS Loan, or a Federal Direct Parent PLUS Loan. If you have other types of federal loans such as Perkins Loans, FFELP Loans, Nurse Faculty Loans, Loans for Disadvantage Students (LDS), or Federal Health Professions Student Loans, you will have to consolidate those loans into a Federal Direct Consolidation Loan to make them eligible for PSLF. Read more about consolidation here.

In addition to having qualifying loans, you must be working at a qualifying employer to be eligible for PSLF. This means you must be working full time at a government agency, a 501(c)(3), or a non-profit organization. To determine if your employer qualifies, you can use this tool. You must be considered a regular employee and not a contractor. The 10 years of work does not have to be consecutive, so you can take a break from eligible repayment and then restart the clock when you return to eligible employment.

You must send in documentation of your eligible employment to verify your service. Although, technically, you are not required to submit the proof of service until you've completed all 10 years of repayment, it is recommended that you report your service annually to your loan servicer. This way you don't have to try to go back and recreate your work history and documentation, which may be difficult for some employers to provide after a long period of time has passed.

There is a PSLF help tool that will walk you through the process of reporting your employment and determining your eligibility for forgiveness.

While you are completing the service at an eligible employer and have eligible loans, you must also be enrolled in an eligible federal repayment program. This means you must be enrolled in an income-based repayment program (IBR) or standard repayment. Since standard repayment is 10 years, there will be no balance to forgive through PSLF if you are enrolled in standard repayment for the entire time you are repaying your loan.

Payments no longer have to be considered "on-time" to count toward eligible repayment for PSLF. Lump sum payments can count for no more than 12 payments, but the eligible months of work must be completed before the lump sum payment will be credited toward forgiveness.

Periods of administrative forbearance count toward PSLF as long as you are completing eligible service during that time, but other deferment and forbearance periods do not count toward PSLF.

There will be a pause in processing PSLF paperwork from May 1, 2024 through July 2024 in order for the servicing of PSLF borrowers to be transitioned to studentaid.gov from MOHELA. If you are currently working on completing PSLF and have a loan serviced by MOHELA, it is recommended that you take a screenshot of your progress now to compare it to after the transition is completed.

You can always catch the latest guidance on PSLF on the Federal Student Aid website here.