Refinancing with Earnest
Refinancing rates from 2.46% 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 federal student loan balances after 10 years, it’s hard to find a better deal out there than PSLF. For workers who are saddled with federal student loan debt and who also work in lower-paying public service or nonprofit sector jobs, PSLF can be worth thousands of dollars.
It’s no wonder Public Service Loan Forgiveness is one of the most talked about student loan programs. But it’s often misunderstood. Trying to figure out if you qualify and when to apply feels about as difficult as getting your diploma.
In an effort to help answer some questions and clarify misconceptions, here are four surprising facts about the Public Service Loan Forgiveness Program.
Fact #1: It’s your employer, not you, who has to qualify.
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 you do it for.
Qualifying employers whose employees may apply for PSLF are:
- 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 with qualifying public services
- 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 parties, for-profit groups, or nonprofit groups that don’t fall under Section 501(c)(3) of the Internal Revenue Code do not qualify as public service employers.
If you aren’t sure if your employer qualifies as a valid PSLF employer, follow the qualifying public services link above or talk to your company’s human resources department.
Fact #2: You have to be a full-time employee.
Part-time employees will not qualify for Public Service Loan Forgiveness, even if they are employed by a valid PSLF 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 your previous payments 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 Federal Student Aid website to find out what types of loans you have.
Fact #4: You have to make 120 qualifying loan payments.
First off, only payments made after October 1, 2007 will potentially qualify as one of the 120 required payments necessary for loan forgiveness.
Second, the repayment plan you used to make those payments matters.
Luckily, payments you make under an income-driven repayment plan count toward PSLF. Your payments are eligible if you’re making payments on a Direct Consolidation Loan using the following plans:
- Income-Based Repayment Plan (IBR)
- Pay as You Earn Plan (PAYE)
- Income-Contingent Repayment Plan (ICR)
Another factor to consider: Will you 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.
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 check if you qualify, it’s recommended you 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.
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. Best of luck!
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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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 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% 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 Month/Day/Year, 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 08/21/18. 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@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 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
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). 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 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|