Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government, student loan lenders and others. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.
* * *
If you’re wondering what a public service job is, you may have federal student loan debt hanging around your neck.
Yes, this type of employment could help you receive relief from the Public Service Loan Forgiveness program (PSLF). It’s a program designed to forgive government-held education debt for workers at certain public and nonprofit employers.
If you’re asking this question because you’re looking to vanquish student loan debt, you’re asking the right question. Working in public service is one surefire way to qualify for federal loan forgiveness, as well as repayment assistance programs proffered by states and employers.
A public service job is a position at a government or nonprofit employer,and there are a lot of roles and organizations that fall into this category. Here are some examples:
- Federal, state, local and tribal government agencies
- Americorps (full-time) and Peace Corps
- Military and public health services jobs
- Law enforcement positions or public service law
- Public school, college and university jobs, including administrative and teaching roles
- Private schools, colleges and universities that operates as not-for-profit organization
- Other positions in 501(c)(3) not-for-profit organizations
The easiest way to determine if the employer is eligible for PSLF is to ask its human resources department before accepting the position. To double-check its eligibility, you could also complete a PSLF Employment Certification Form via the Department of Education.
Not all nonprofits are eligible employers. Labor unions and partisan political organizations, for example, don’t fall into this category. Working for a company holding a government contract with a PSLF-eligible employer also wouldn’t allow you to qualify.
|What is a public service job at a nonprofit employer? It must provide one of the following…|
|● Emergency management
● Military service
● Public safety
● Law enforcement
● Public interest law service
● Early childhood education
● Service for individuals with disabilities, the elderly
● Public health
● Public or school library services
1. What is a public service job’s eligibility requirements for PSLF?
2. How much will I earn, and what effect does that have on my student loans?
3. Does my salary affect my eligibility for PSLF?
4. Does my loan qualify for PSLF?
5. Do I have to stay in a public service job until the loan is paid off?
6. Can I consolidate my loans after accepting a public service job?
7. Does my consolidated loan with my spouse affect my loan forgiveness eligibility?
8. Will the PSLF program still be available after I’ve made the 120 qualifying payments?
9. Is it worth pursuing Public Service Loan Forgiveness?
To qualify for PSLF, you need to be a full-time employee of an eligible employer. This means you work at least 30 hours per week — if your company defines full-time as working fewer hours, you will still have to work the 30 hours to qualify.
Luckily, you could still meet the threshold if you work multiple part-time public service jobs that add up to 30 hours.
As of 2020, if you work for a religious employer, you could meet this requirement by including time spent on:
- Religious instruction
- Worship services
Regardless of how you meet the required number of hours, you will also have to put in 10 years of service to be eligible for PSLF. This decade requirement was determined by the number of payments you’d need to make to qualify. You must make 120 payments, which breaks down to one payment per month for a decade.
Your salary depends on your employer and line of work. What’s important to consider is your salary-to-student loan debt ratio. If you have high loan balances compared to your salary, applying to public service jobs would be valuable because you could pay less under income-driven repayment (IDR) — and have more forgiven via PSLF.
To figure out if the math works, estimate the possible salary for public service jobs you are considering. You might employ tools like PayScale or the Bureau of Labor Statistics’ data.
Once you know what level of salary you could expect to earn, input the figure into our debt-to-income calculator.
Debt-to-Income (DTI) Calculator
Your income level has no bearing on whether or not you qualify for PSLF.
Still, you are required to make 120 monthly payments over 10 years on an IDR plan, so your income level could be a determining factor of whether you have a remaining loan balance to be forgiven at the end of a decade.
Even if your potential public service job is eligible for PSLF, your student loan might not be.
|● Direct Loans||● Federal Family Education Loans (FFEL)
● Perkins Loans (borrowed from your school)
● Private or alternative loans (borrowed from a non-federal lender)
The short answer is yes. Still, the 120 payments don’t have to be consecutive — they just have to be made while you are working full-time under a qualified employer.
For example, if you decide to leave a qualifying public service job, you won’t lose credit for the payments you’ve already made. So, if you leave and come back to a public service job to fulfill the 10-year, 120-payment requirement, you could still be eligible for PSLF. However, in this situation, the paperwork trail can become just that much more difficult.
Notably, though, if you’re at the 120-payment mark, you must apply for PSLF before leaving your public service job. You can only receive forgiveness if you are currently working at an eligible employer.
Consolidating loans may sound appealing and can certainly be helpful with organizing debt payments, but it could affect your PSLF status.
FFEL and Perkins loans might be eligible if you consolidate them into a Direct Consolidation Loan. This allows you to take multiple federal loans and combine them into one new loan (of the same balance and average interest rate) for a single monthly payment.
With that said, only payments made toward the new consolidated loan will count towards the 120-payment requirement for PSLF. Any previous payments you made on the non-eligible loans will not qualify — you’ll be at square one of your 120-payment schedule.
The clock would also reset on payments previously made on Direct Loans that could be included in consolidation. So if you’ve already made 24 qualifying payments on eligible Direct Loans (and put in two years of employment service), for example, you should think twice about consolidating those loans.
One possible solution is consolidating your additional federal student loans separately. The Education Department’s PSLF Help Tool can help you evaluate whether to consolidate some or all of your government-held debt.
While being married doesn’t affect accepting a public service job, it can change your eligibility for PSLF.
Unfortunately, joint FFEL Consolidation Loan borrowers can’t reconsolidate their shared debt into a Direct Consolidation Loan, according to the Department of Education.
If you have a joint Direct Consolidation Loan, on the other hand, you still could qualify for PSLF with some caveats:
- You and your spouse must work full-time with a PSLF-eligible employer while the 120 required payments are submitted.
- If you work an appropriate public service job (but your spouse doesn’t), only the original debt you borrowed (before consolidation) in your name may be forgiven.
Since the Congress created the PSLF program (and then-President George W. Bush signed it into law in 2007), they could change or end it at any point.
Changes also occur with little notice. For example, in 2016, the Department of Education disqualified some lawyers working for the American Bar Association (ABA) from receiving PSLF. The Department said that even if you received approval that your employer meets the requirements for PSLF, that doesn’t mean it’s an official approval for PSLF.
|Federal government action on PSLF…|
|● May 2017: The current administration’s budget proposal called to end PSLF for federal loan borrowers taking out loans after June 2018.
● December 2017: House Republicans pitched the PROSPER Act, which would eliminate PSLF (and IDR-related forgiveness).
● March 2018: Congress financed a $350 million expansion of PSLF that allowed the Education Department to reconsider program applicants who were denied for using the wrong repayment plan.
● April 2019: Senate Democrats proposed a “PSLF 2.0” that would expand eligibility, simplify the application process and award partial forgiveness at the five-year mark.
This tenuous status of PSLF is something graduates who haven’t yet entered the workforce might want to consider before pinning their hopes on relief awarded a decade away.
Only you can answer this question, as every individual is different. If you’re naturally drawn to government or nonprofit work, PSLF could simply be a bonus to pursuing the career you’ve already desired.
If you’re weighed down by federal student loans and are open to all sorts of employment, on the other hand, PSLF might not be reason enough to start a career in public service.
As you weigh your options, consider this parting advice:
- If you can’t imagine yourself in a PSLF-approved position, however, review other jobs that offer student loan forgiveness.
- There are potential downsides to student loan forgiveness, PSLF or otherwise, including the 10-year wait and lack of career maneuverability.
- If you still think federal loan forgiveness could be the right route, consider the stories of borrowers who are pursuing PSLF.
- Also consider the math: Free student loan forgiveness calculators can help you figure whether pursuing PSLF will be worth the time and effort.
Andrew Pentis contributed to this report.
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|1.74% – 8.70%1||Undergrad & Graduate|
|1.74% – 7.99%2||Undergrad & Graduate|
|1.74% – 7.99%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.74% – 7.99%5||Undergrad & Graduate|
|2.05% – 5.25%6||Undergrad & Graduate|
|1.86% – 6.01%||Undergrad |
|N/A7||Undergrad & Graduate|
|1.99% – 8.38%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 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 May 4, 2022.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.
3 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR 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. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
4 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 April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for Navient.
6 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
7 Important Disclosures for PenFed.
Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are 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.
8 Important Disclosures for CitizensBank.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR).
IS Variable Rate Disclosure: Variable Rates advertised are 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 December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
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. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, 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. 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 on our website 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.