Public Service Loan Forgiveness Calculator FAQs
1. Does this calculator verify that I’m eligible for PSLF?
No. While we’d love to be able to do that with 100% certainty, there are a LOT of requirements for PSLF. Receiving a result from this calculator does not mean that you’re eligible to receive forgiveness from PSLF. Generally, you must meet some main requirements for PSLF, including:
- Be employed full-time in an eligible job (nonprofit and government jobs generally qualify)
- Make payments towards a loan or loans in the Direct Loan program
- Make 120 qualifying payments after October 1, 2007
Again, there are a TON of requirements for PSLF, so be sure to read them over carefully.
If you believe you are eligible for PSLF, it’s recommended that you submit the Employment Certification for Public Service Loan Forgiveness form. When you do this, the Dept. of Education will let you know if, in fact, you do qualify and are making qualifying payments towards PSLF.
2. What assumptions does this calculator make?
For the PSLF Calculator to provide a forgiveness estimate, we have to make some assumptions which may or may not hold true in every situation. The calculator assumes the following:
- Your family size will remain the same during the life of the loan and poverty guidelines will increase based on the Congressional Budget Office’s estimate of inflation.
- The current interest rate won’t change during the life of the loan (even for loans with variable interest rates).
- All loans are unsubsidized loans for the purposes of interest accumulation.
- You have not already made any qualifying Public Service Loan Forgiveness payments.
- You are beginning the 10-year Standard Repayment Plan today (for purposes of the “Standard Plan” calculations).
Obviously, these assumptions will not be 100% accurate for all borrowers in all cases. That said, keep in mind that this tool is meant to estimate forgiveness through PSLF and not provide an exact number.
3. What is considered a “qualifying payment” for PSLF?
Typically, a qualifying payment is:
- Made after October 1, 2007
- Received within 15 days of the due date
- Made during qualifying employment
- For the full amount under your repayment plan
4. Do my 120 payments need to be consecutive?
No. Payments do not need to be consecutive. You must simply make 120 total qualifying payments that meet all other qualifying employment and payment criteria.
5. Which payment plans are eligible for PSLF?
The payment plans that qualify are:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
- 10-Year Standard Repayment
- Any other federal payment plan with monthly payments that equal or exceed Standard Repayment monthly payments
However, an important note: You must make the majority of your 120 payments under an income-driven plan to be eligible for PSLF. The reason you cannot stay on the 10-Year Standard Repayment Plan is because this plan will result in paying off your entire balance in 10 years, leaving nothing left to forgive.
6. How do I know which repayment plan to choose?
Choosing the right repayment plan depends on several different factors. To maximize the benefits of PSLF, it’s often recommended that borrowers choose the repayment option that minimizes monthly payments and/or maximizes the total amount of debt forgiven. The PSLF Calculator calculates both of these.
However, keep in mind that not all borrowers are eligible with all repayment plans displayed. With this in mind, be sure to verify your eligibility before attempting to enroll in a repayment plan.
7. Can I use this calculator if I have Parent PLUS loans?
Unfortunately, no, not at this time. While Parent PLUS loans are technically eligible for PSLF under certain circumstances, our calculator does not support the required Income-Contingent Repayment plan that Parent PLUS borrowers must use to be eligible for PSLF.
8. Which loans are eligible for PSLF?
The following types of loans are eligible for PSLF:
- Federal Direct Subsidized Stafford/Direct Loans
- Federal Direct Unsubsidized Stafford/Direct Loans
- Federal Direct PLUS Loans
- Federal Direct Consolidation Loans
It’s important to note that Federal Family Education Loans (FFEL) are not eligible for forgiveness. However, they can become eligible if consolidated into a Federal Direct Consolidation Loan.
The bad news is that only payments made after this consolidation takes place count toward the 120 qualifying payments needed.
9. How do I apply to receive forgiveness under PSLF?
Currently, there’s no way to apply for or enroll in forgiveness through PSLF. This is because the program did not begin until October 2007, so the first borrowers will not become eligible for forgiveness until 10 years from this date (October 2017).
Instead, for now it’s recommended that you submit the Employment Certification for Public Service Loan Forgiveness form to confirm you’re on the right track for PSLF. Other than that, all you need to do right now is make sure you’re meeting all requirements and keep making qualifying payments for PSLF.
10. Is forgiveness through PSLF taxable?
No. Unlike forgiveness through income-driven repayment options, debt forgiven through PSLF is not subject to income tax.
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