Dear Student Loan Hero: Am I on Track for Public Service Loan Forgiveness?

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

public service loan forgiveness
Logo

We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

Student Loan Hero is coming to the rescue to answer your toughest questions. If you have a question that hasn’t been addressed on our Student Loan FAQ page, contact our customer support team. We’ll keep you anonymous while answering your concern with superhuman effort.

If you made a word cloud of 2017’s most-searched student loan topics, Public Service Loan Forgiveness (PSLF) would have to be prominent.

In fact, during the week this column was being prepared, about 40 percent of the 195 reader questions we received contained the phrases “Public Service Loan Forgiveness” or “PSLF.”

That popularity is partly because PSLF promises so much. It could wipe out the student loan debt of many public and nonprofit employees.

5 common questions about Public Service Loan Forgiveness

There’s a second reason for the flood of questions about PSLF. The program — although pretty black and white in its requirements — leaves some gray area for borrowers. For example, you must work in public service to qualify for PSLF, but only the loan payments you make while working full time help you achieve it.

The first PSLF applications just became available in September. It’s still a relatively new program, leaving many potential applicants wondering if it’s a fit for them.

Due to the heightened interest, we’re focusing our latest Dear Student Loan Hero column on not one question but five of them. They’re more common than they might sound.

1. Am I on track for PSLF?

The majority of PSLF questions are from readers who don’t yet qualify. That’s because PSLF was created in 2007 and requires 10 years (or 120 months) of timely loan payments.

Some borrowers are just learning about it now. One wrote to us, “I have worked as a school nurse in a public school system for chronic children for the last two years. I was wondering if this setting would qualify for loan forgiveness.”

Provided you meet other requirements, government employees of all sorts are eligible for PSLF. After all, public schools are government entities.

But don’t take my word for it. No matter how far along you are in repayment, fill out the PSLF Employment Certification form. Only then will you know whether your employer could eventually earn you loan forgiveness.

2. Do older payments count toward PSLF?

Relatively new student loan borrowers aren’t alone in wondering if they’ll one day receive forgiveness. There are also borrowers in their 50s and 60s with the same sorts of questions.

One woman wrote to us about her situation: “I work at a nonprofit school. I have for 17 years. My loan [has] doubled over 25 years even though I’ve paid off the $29,000 principal because I put the loan in [forbearance] when I worked part time. I need help finding out how to get info on loan forgiveness given the nonprofit status of my workplace. Please help.”

Unfortunately, only payments made after Oct. 1, 2007, are eligible for PSLF. Also, you must work full time for your eligible employer during repayment.

To this reader, I’d say to complete the PSLF Employment Certification form. In fact, fill it out for each year that you were both employed full time by your nonprofit school and made timely payments on your loan. That will give you the best sense of how much further you’d have to go to achieve PSLF.

It’s also possible that PSLF isn’t the best route to forgiveness. You mentioned that you have been in repayment for over 25 years but were interrupted by a forbearance. If you’re on an Income-Based Repayment plan, you could qualify for forgiveness after 25 years of payments.

3. Is my repayment plan eligible for PSLF?

When you took out your federal student loans, you received a 10-year Standard Repayment Plan. You could have switched to an income-driven repayment (IDR) plan to lower your monthly payments to a percentage of your discretionary income.

Fortunately, IDR plans are PSLF eligible. But that hasn’t stopped confusion.

One mother of a borrower messaged us about her son. He has worked for a nonprofit for five years, she said, but he’s been told he wasn’t eligible for PSLF because he was under the Standard Repayment Plan. The mother asked about receiving “credit” for his half-decade of payments and switching to an eligible plan.

A Standard Repayment Plan is eligible for PSLF. But if it’s the 10-year plan you were assigned as a student, you might not have a balance left to forgive. After all, PSLF requires making 10 years of timely payments.

That means our concerned mother is likely referring to the Standard Repayment Plan associated with Direct Consolidation Loans. Unfortunately, payments made via that Standard Repayment Plan don’t qualify for PSLF.

To echo the Department of Education (DOE), you should switch to an IDR plan as soon as possible if you’re seeking PSLF. You can learn more about applying at StudentLoans.gov.

4. Is my career eligible for PSLF?

One of the surprising requirements of PSLF is that it’s your employer (not your job) that has to gain eligibility.

The school nurse who asked if her workplace qualified for forgiveness isn’t unique. Our customer support team often receives questions about workplace eligibility. Recent graduates message us wondering if they should switch employers. Older readers think about leveraging their past work experience.

Less frequently, something like this happens: A woman read our post about unusual careers that qualify for PSLF, saw call center representative listed, and asked if she too was eligible for PSLF.

“I work in customer service for an utility company and do emergency calls, electric and gas leaks, etc.,” she wrote. “Can I qualify for student loan forgiveness?”

For this reader, the employee-employer distinction is worth pointing out. For her to receive forgiveness, her utility company would have to be a government or nonprofit organization.

The DOE also clarifies that volunteering full time (as a call center rep or in another role) for Americorps or Peace Corps qualifies. But working full time for for-profit organizations, including for-profit government contractors, doesn’t qualify.

5. Is PSLF going away?

For readers who learn they could be eligible for PSLF, the next natural question is whether the program will be around long enough to benefit them.

One reader put it best: “Is PSLF still in effect? I’m hearing conflicting information that’s it’s being cut out.”

There were over half a million borrowers on track to receive forgiveness when the Trump administration first proposed ending PSLF in May, according to The Washington Post. That sounded alarm bells initially.

Fortunately, it became clear the PSLF program’s potential closure would only affect new borrowers. Simply put: If you borrowed a federal loan before July 1, 2018, you’ll remain eligible to apply for PSLF.

Keep seeking clarity on Public Service Loan Forgiveness

PSLF could do a whole lot of good for your student loan situation. But it’s not the right path for every borrower. As you consider how the program fits your situation, assume nothing.

The PSLF requirements are clear, but they don’t always apply seamlessly to borrowers’ situations. Hopefully, these answers helped you figure out what’s best in your case.

If you have a student loan question you’ve been waiting for an answer to, contact our customer support team. Your question might end up in this column.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
Get real rates from up to 4 Lenders at once

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. 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.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.