Refinancing with Laurel Road
Refinancing rates from 1.89% APR. Checking your rates won’t affect your credit score.
Public Service Loan Forgiveness (PSLF) is the holy grail for paying off federal student loans. Offering complete and tax-free forgiveness of remaining federal student loan balances after 10 years, it’s hard to find a better deal out there than PSLF.
For workers saddled with federal student loan debt while working in lower-paying public service or nonprofit sector jobs, PSLF can be worth thousands of dollars. Planning to work for employers who would qualify someone for Public Service Loan Forgiveness can be a smart move for people who know they want a career in public service.
With the benefits, it’s no wonder Public Service Loan Forgiveness is one of the most talked about student loan programs. However, the program is often misunderstood. Here’s what you need to know about Public Service Loan Forgiveness.
Fact #1: You need to work for one of the eligible Public Service Loan Forgiveness employers.
In order to qualify for the PSLF program, your employer has to be a very specific type of organization. The focus isn’t primarily on the work that you do — it’s on the organization for which you do it.
Qualifying Public Service Loan Forgiveness employers include:
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
- Any local, state, federal or tribal government organization
- Certain not-for-profit organizations that aren’t 501(c)(3) with qualifying public service as their primary purpose
- Certain volunteer organizations, like the Peace Corps and AmeriCorps
There are certain groups that may seem like they would fall under the public service category, but don’t. For example, labor unions, political groups and some lobbying groups don’t qualify.
Talk to your human resources department to see if you qualify if you aren’t sure if your employer meets the requirements for PSLF.
Fact #2: You have to be employed full-time by a qualified employer.
Part-time employees don’t qualify for Public Service Loan Forgiveness, even if they are employed by a valid Public Service Loan Forgiveness employer. You have to work at least 30 hours per week, or however long your employer considers to be full-time.
Also, a noteworthy caveat to the 30-plus hours rule is that none of that time can be spent in any sort of religious capacity, such as instruction, worship or proselytizing.
Fact #3: You must have qualifying loans.
Only loans received through the Direct Loan Program qualify for Public Service Loan Forgiveness. These loans include both subsidized and unsubsidized Direct or Stafford loans.
The only way to have Federal Perkins Loans, Federal Family Education Loans or any other type of federal loan qualify for PSLF is to combine them into a Direct Consolidation Loan. Unfortunately, none of the payments made prior to consolidating with Direct Consolidation Loan will count as one of the 120 required qualifying payments.
If you don’t know whether your federal student loans qualify for the PSLF program, log in to the National Student Loan Data System to find out what types of loans you have. You can quickly see whether you’re eligible for the program, including Stafford Loan forgiveness.
Fact #4: You have to make 120 qualifying loan payments.
First off, only payments made after Oct. 1, 2007 will potentially qualify as one of the 120 required payments necessary for loan forgiveness. And, of course, you must be working for one of the Public Service Loan Forgiveness employers while making those payments.
Second, the repayment plan you used to make those payments matters. You must enter an income-driven repayment plan to receive best results for PSLF. Your payments are eligible if you’re making payments on a Direct Loan (including a Direct Consolidation loan) using one of the following plans:
- Revised Pay As You Earn Repayment Plan (REPAYE)
- Income-Based Repayment Plan (IBR)
- Pay as You Earn Plan Repayment Plan (PAYE)
- Income-Contingent Repayment Plan (ICR)
It’s worth noting that your payments don’t have to be consecutive. However, if you work for a few years for a PSLF-qualified employer, then work a couple years for an employer that doesn’t qualify before returning to the nonprofit sector, it could take longer than 10 years to get your forgiveness. This is why the 120 number is so important.
Another factor to consider: Will you even have any debt left to be forgiven after 120 payments? It takes a long time to make 120 qualifying loan payments (a minimum of 10 years), and many borrowers won’t have much remaining on their federal student loan debt balance.
However, your payments could be as low as $0 a month, especially if you are in the IBR program. It depends on your income and the repayment plan you’re enrolled in.
Finally, consider that consolidation restarts the PSLF clock. You have to make 120 payments after the consolidation, regardless of how many you made before. If you decide to consolidate your loans, doing so early on can help you avoid lengthening the amount of time over which you make your payments.
Public Service Loan Forgiveness: the bottom line
The PSLF program typically caters to borrowers who have difficulty paying their loans because of a low salary and/or a high student loan balance. If you qualify for the Public Service Loan Forgiveness Program, the remaining balance after your 120 qualifying payments will be forgiven.
To increase the likelihood of receiving forgiveness, submit an Employment Certification Form to your student loan servicer each year. That way you can find out sooner rather than later if your current employment qualifies. Plus, the records make it easier for the Department of Education to verify your Public Service Loan Forgiveness employers and payments, potentially helping you receive a decision sooner when you apply.
Not everyone who thinks they qualify actually will, so definitely do your research, keep a good paper trail and log in to the Federal Student Aid website to keep track of your loans.
Miranda Marquit contributed to this report.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 5.64%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.89% – 6.77%4||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 5.41%5||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews! |
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 10, 2020.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.16% effective August 10, 2020.