10 Important Things to Know Before Taking a Public Service Job

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Public Service Jobs

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Public service jobs are a great chance for you to not only help people but also receive help paying back your student loans through the Public Service Loan Forgiveness program (PSLF). This federal program is designed to forgive student loan debt for employees of certain public and nonprofit jobs.

Before you jump headfirst into this specialized line of work, there are a few things to consider. Here are 10 questions you should ask yourself before pursuing public service jobs.

1. What’s considered a public service job?

If you are looking into public service jobs for the student loan forgiveness benefit, then it’s important to know exactly what constitutes such a career. There are a lot of roles and companies that fall into the category. Here are some examples:

  • Federal, state, local, and tribal government positions
  • Americorps (full-time), Peace Corps, and Teach for America
  • Positions in 501(c)(3) not-for-profit organizations
  • Military and public health services jobs
  • Law enforcement positions or public service law
  • Public school jobs, including administrative and teaching roles

The easiest way to determine if the role and company is eligible for PSLF is to ask the employer before accepting the position. The Consumer Financial Protection Bureau created an Employer’s Guide to Assisting Employees with Student Loan Repayment for employers to help them understand if the role would fall into the category.

Labor unions and partisan political organizations, for example, don’t fall into this category even if they are nonprofits. The same goes religious organizations where you could be teaching religion, leading worship services or proselytizing.

2. What are the workload eligibility requirements of a public service job?

To qualify for the PSLF, you need to be a full-time employee of an eligible company. This means you work more than 30 hours per week. But, if your company defines full-time as less than that, you will still have to work the 30 hours.

Luckily, you could still qualify if you work a couple of part-time jobs that add up to meet the minimum requirement for hours.

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 10 years.

3. How much will I earn and what effect does that have on my student loans?

Your salary depends on your employer and line of work. What’s important to consider is your salary/student loan debt ratio. If you have high loan balances compared to your salary, applying to public service jobs would be valuable because you would be able to pay less and have more forgiven with PSLF.

To figure out whether your salary/student loan debt ratio is worth it, find out what that possible salary would be for the public service job you are considering and check out Student Loan Hero’s Debt-to-Income (DTI) Calculator to make the math easy.

4. Does my salary affect my eligibility for PSLF?

Your income level has no bearing on whether or not you qualify for PSLF, but it is an income-driven repayment plan. Since you are required to make 120 monthly payments over 10 years, your income level could be a determining factor of whether you have a remaining loan balance to be forgiven at the end of the decade.

5. Does my loan qualify for PSLF?

The only type of loan that qualifies under PSLF is a Direct Loan. To determine if accepting a public service job will help reduce your student loan balance, it’s important to know about other loan qualifications. Here are the stipulations.

  • No loan you received from the William D. Ford Federal Direct Loan (Direct Loan) Program can be in default.
  • Loans borrowed before July 1, 2010, may fall under the Federal Family Education Loan (FFEL) or the Federal Perkins Loan (Perkins Loan) Program, which are not eligible for PSLF.
  • FFEL and Perkins Loans that were consolidated into a Direct Consolidation Loan, however, are eligible for PSLF.

6. Do I have to stay in a public service job until the loan is paid off?

The short answer is yes. But, the 120 payments do not 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.

You also must apply for PSLF before leaving your public service job at the end of your 120 payments. You can only receive forgiveness if you are currently working at an eligible employer. According to the Department of Education, however, “you could regain eligibility if you later find full-time employment at another qualifying employer and then apply for loan forgiveness.”

7. Can I consolidate my loans after accepting a public service job?

Consolidating loans may sound appealing and can certainly be helpful with organizing debt payments, but it could affect your PSLF status.

Perkins loans and Federal Family Education Loans (FFEL) might be eligible if you consolidate them into a Direct Consolidation Loan. This allows you take multiple federal education loans and combine them into one loan for a single monthly payment.

But, only payments made toward the new consolidated loan will count towards the 120 payments. Any previous payments you made on the non-eligible loans will not qualify — you will start back at square one of your 120 payment schedule. So, if you’ve made 24 payments (put in two years of service) already, they wouldn’t count.

Also, if you consolidate your Direct Loans with other types of federal student loans, you will lose any payments you made on the original Direct Loan and start all over with the new consolidated loan. So, you might want to think about consolidating your additional federal student loans separately.

8. Does my consolidated loan with my spouse affect my loan forgiveness eligibility?

While being married doesn’t affect accepting a public service job, it can change your eligibility for PSLF. “The law no longer permits joint consolidation loans to be made, so joint FFEL Consolidation Loan borrowers can’t jointly reconsolidate their FFEL Consolidation Loan into a Direct Consolidation Loan,” according to the Department of Education.

If you have a joint Direct Consolidation Loan, then you still could qualify for PSLF with some caveats.

  • For have the remaining balance of the loan to be forgiven, both you and your spouse have to be working full-time with an employer that qualifies under PSLF while making payments.
  • Combined payments of a joint Direct Consolidation Loans cannot be forgiven when only one spouse was working in a public service job.

9. Will the PSLF program still be available after I’ve made the 120 qualifying payments?

Unfortunately, this is another tough question. Since the Congress created the PSLF Program, they could change or end it at any point.

Changes also occur with little notice. For example, in 2016, the Department of Education (ED) disqualified some lawyers working for the American Bar Association (ABA) from receiving PSLF. The ED 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.

This is something graduates who haven’t yet entered the workforce might want to consider. There are other income-based repayment options, such as Pay-As-You-Earn Repayment Plan (PAYE Plan) and Income-Contingent Repayment Plan (ICR Plan), available if you’re hesitant.

10. Could the new administration affect my public service job benefit?

In August, The Brookings Institution, a research group based in Washington, D.C., released a study revealing what could happen under President Donald Trump’s new budget and student loan plan. The proposal would end the PSLF program for new borrowers taking out loans after July 1, 2018, but current borrowers would still be eligible for forgiveness.

Now that some burning questions about public service jobs have been answered, you might want to know how to go about finding a gig. Luckily, no matter your degree or interest, you can find a public service job for a variety of career paths.

Interested in refinancing student loans?

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1 Important Disclosures for Earnest.

Earnest Disclosures

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 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% 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 hello@earnest.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

  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.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.899% APR to 8.179% APR (with AutoPay). Variable rates from 2.570% APR to 6.980% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. SoFi rate ranges are current as of September 14, 2018 and are subject to change without notice. See APR examples and terms. Lowest variable rate of 2.570% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.740% margin minus 0.25% AutoPay 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)

4 Important Disclosures for LendKey.

LendKey Disclosures

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.

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.

6 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 2.57%-8.17% (2.57%-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 3.75%-8.69% (3.75%-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. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.57% – 6.98%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.80% – 6.22%2Undergrad
& Graduate
Visit Laurel Road
2.51% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.57% – 8.17%6Undergrad
& 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.