Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.
* * *
One of the most popular student loan programs out there is Public Service Loan Forgiveness (PSLF), and it’s no wonder why. The program promises big rewards for student loan holders by completely wiping away the balance of their debt.
As with a lot of programs, though,the application requirements can be confusing. Additionally, there are lingering questions about how long the program will remain intact.
Before pursuing Public Service Loan Forgiveness, you need to ask yourself if PSLF makes sense for your financial situation. Don’t fear — we’ll help make it easy for you.
To find out what you need to know about qualifying for Public Service Loan Forgiveness and whether it’s the right choice, let’s answer the following questions:
- What is Public Service Loan Forgiveness?
- What are some Public Service Loan Forgiveness jobs?
- Public Service Loan Forgiveness qualifications: Which student loans are eligible?
- What are the requirements for eligible payments?
- How can you ensure you qualify for Public Service Loan Forgiveness?
- Should you pursue Public Service Loan Forgiveness?
Public Service Loan Forgiveness is a federal program designed to forgive student loan debt for employees of certain public and nonprofit jobs. It erases whatever remains of your federal student loans after you’ve made 120 qualifying payments while working for an eligible organization.
For most borrowers, this means you’ll need to work for 10 years before receiving loan forgiveness from PSLF. Of course, after 10 years of repayment, your loan balance might be a lot smaller than it was when you started. But if you owe a lot in student loans, the forgiveness that comes from PSLF could still be a huge financial relief.
To gain loan forgiveness, it’s crucial to meet all the program’s requirements year after year. Unfortunately, some borrowers have counted on PSLF only to discover — 10 years later — that they didn’t meet all the criteria. So if you’re going after this program, make sure you understand the ins and outs of the qualifications to ensure you’re on track for Public Service Loan Forgiveness.
|Who qualifies for Public Service Loan Forgiveness?|
|● Less than 3% of PSLF applicants are deemed eligible
● About 3 in 4 PSLF-eligible applicants work for the government
● Approximately 56% of ineligible applicants are denied because they haven’t made 120 qualifying payments
● The average balance forgiven via PSLF was $75,090
|Source: Department of Education data as of Sept. 30, 2020|
You’ll also want to pay attention to policy changes to ensure the program remains intact. In recent years, for example, the Trump administration has repeatedly proposed eliminating PSLF. Although current applicants might (hopefully) still be considered eligible even if the program were to disappear, there’s no guarantee it will be around forever.
If you’re interested in influencing policy, contact your elected representatives to let them know how you feel about PSLF.
Although people ask about Public Service Loan Forgiveness jobs, the more important question would be about Public Service Loan Forgiveness employers. The Public Service Loan Forgiveness program is available to employees of:
- Federal, state, local or tribal government organizations
- A 501(c)(3) nonprofit
- A not-for-profit that’s not 501(c)(3)-designated, but meets other requirements related to public service
- AmeriCorps (in a full-time capacity) or the Peace Corps
What your specific job is typically doesn’t matter, just so long as the organization or agency falls into one of the above categories. However, if you perform work of a religious nature as part of your job at a qualifying organization, that does not count toward the total hours. (For example, the Department of Education notes that “time spent on religious instruction, worship services or any form of proselytizing” may not be eligible.)
In addition, you won’t need to work for the same employer during the entire 120-month period. However, you must work the number of hours that your employer considers to be full-time work or an average of at least 30 hours per week each year, whichever is greater.
IMPORTANT UPDATE (Oct. 12, 2021):
As of October 2021, the government is allowing all federal loan repayments to count for PSLF, regardless of the payment plan, for those who apply (or have applied) to the program before Oct. 31, 2022.
This will be retroactive to include previously non-eligible payments. However, there is some fine print, so you’ll need to check with your servicer to be sure. Here are all the main details for these new, more lenient standards.
Below is the original text from this post, describing the previous standards in place prior to October 2021:
Loan eligibility is another area where you’ll have to be careful. Not all federal student loans qualify, so be sure that yours meet the requirements.
|Eligible for Public Service Loan Forgiveness||Ineligible for Public Service Loan Forgiveness|
|● Federal direct/Stafford loans (subsidized)
● Federal direct/Stafford loans (unsubsidized)
● Federal direct PLUS loans
● Federal direct consolidation loans
|● Federal Family Education Loans*
● Federal Perkins Loans*
● Alternative or private student loans
|*Note: Your loans could become eligible if you group them into a new direct consolidation loan. However, only payments made toward the new direct consolidation loan will count toward your 120 payments. As a result, you need to be careful not to “reset the clock” on your qualifying payments by consolidating loans that were already eligible for PSLF.|
Note that all of the above eligible loans originate from the direct loan program. Perkins loans and Federal Family Education Loans (FFEL) are not eligible for forgiveness.
However, keep in mind that although Perkins loans don’t qualify for PSLF, they can be eligible for other loan forgiveness programs, including Perkins loan cancellation.
Unfortunately, there’s another set of Public Service Loan Forgiveness qualifications to be aware of — having your loans on an eligible repayment plan.
The payment plans that qualify are:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
Note that the standard repayment plan technically qualifies as well, but since this plan spans only 10 years, you wouldn’t have any balance left to forgive after 120 qualifying monthly payments. As a result, you’ll need to switch to an income-driven plan to get forgiveness from PSLF.
But no matter which plan you choose, you’ll need to have made 120 monthly payments on time and in full to qualify. Additionally, only payments made after Oct. 1, 2007, count as qualifying payments.
|Public Service Loan Forgiveness in the news|
|On Oct. 28, 2020, the Department of Education announced changes that could help borrowers in repayment. Most notably, it said early and lump-sum payments could count toward the 120-payment criteria.|
Since this program began in 2007, the first cohort was evaluated for PSLF in 2017. Unfortunately, some borrowers learned too late that they weren’t actually eligible for forgiveness.
To make sure you don’t find yourself in this situation, here are some important steps to take:
The Employment Certification for Public Service Loan Forgiveness form should be filled out annually (or, at the very least, whenever you change jobs). This form verifies that your employment is eligible under the program, and parts of it will need to be filled out by your employer. While submitting it on an annual basis isn’t a requirement, it could be helpful for your servicer to track your eligibility.
If you or your employer is unsure about any aspect of the program, consult this Consumer Financial Protection Bureau guide for answers to your questions. You can also be guided through the Department of Education’s PSLF help tool to confirm your eligibility and timing.
Once you submit your application, keep in mind that at that time you’ll need to be working at a qualifying organization at that time. In addition, note that you’ll have to submit everything at once — your whole 10-year employment history. Having filled out the employment form and tracked your payments each year can help the Department of Education make a decision faster.
Make sure to keep copies of your form each year. You should also keep copies of pay stubs and W-2 tax forms in case you need them for verification later.
|Public Service Loan Forgiveness in the news|
|On May 23, 2018, the Department of Education announced it would reconsider previously denied PSLF applicants. The department pumped $350 million into Temporary Expanded PSLF (TEPSLF) to reevaluate borrower forms.|
Before you decide to go all in with this program, be sure to consider how much in student loans you might have left to be forgiven after 10 years of repayment.
This program is most valuable if you have high loan balances relative to your salary. If your loan balances are low, however, then it’s unlikely that you’ll have much of your debt remaining to be forgiven after a decade has passed. Likewise, if you earn a lot and don’t qualify for reduced payments, you might have already paid off most or all of your loans in 10 years.
You can figure out where you stand by comparing different student loan repayment plans and calculating what your remaining balance will be after 120 payments. Our Public Service Loan Forgiveness calculator helps you estimate how much you could save through the program. Keep in mind, though, this calculator serves only as an estimate, and doesn’t guarantee your eligibility or the amount of debt to be forgiven.
Along with crunching the numbers, don’t forget to take your career plans into account. If you’re drawn to a career in public service, this program could be the right move. On the other hand, it’s probably not worth committing a decade of your life to a career path that’s not the right fit just for the sake of loan forgiveness.
And if PSLF doesn’t seem like such a good idea on closer inspection, check out other options for student loan forgiveness, as well as strategies to make repayment easier or cheaper, such as student loan refinancing.
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|2.75% – 8.90%1||Undergrad & Graduate|
|2.50% – 6.80%2||Undergrad & Graduate|
|2.81% – 7.21%3||Undergrad & Graduate|
|2.49% – 7.99%4||Undergrad & Graduate|
|3.24% – 7.99%5||Undergrad & Graduate|
|3.24% – 8.24%6||Undergrad & Graduate|
|3.53% – 7.24%||Undergrad |
|1.74% – 7.99%7||Undergrad & Graduate|
|3.69% – 9.92%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. Fixed loans feature repayment terms of 5 to 20 years. For example, the monthly payment for a sample $10,000 with an APR of 5.47% for a 12-year term would be $94.86. Variable loans feature repayment terms of 5 to 25 years. For example, the monthly payment for a sample $10,000 with an APR of 5.90% for a 15-year term would be $83.85.
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 October 1, 2022.
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 $9 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 30-day Average Secured Overnight Financing Rate (“SOFR”) and changes in the SOFR 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%. There is no limit on the amount your interest rate can increase at one time. The Index is currently published by the Federal Reserve Bank of New York (“New York Fed”). If the Index is no longer available, it will be replaced by a replacement Index according to the terms of the promissory note.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of October 31, 2022. Information and rates are subject to change without notice.
3 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 10/26/2022 student loan refinancing rates range from 2.81% APR – 7.21%APR Variable APR with AutoPay and 3.99% APR – 10.68 APR% Fixed APR with AutoPay.
4 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
You can choose between fixed and variable rates. Fixed interest rates are 3.99% – 8.74% APR (3.74% – 8.49% APR with Auto Pay discount). Starting variable interest rates are 2.74% APR to 8.24% APR (2.49% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.
5 Important Disclosures for Navient.
6 Important Disclosures for SoFi.
Fixed rates range from 3.99% APR to 8.24% APR with a 0.25% autopay discount. Variable rates from 3.24% APR to 8.24% 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.
7 Important Disclosures for Purefy.
Purefy Student Loan Refinancing Rate and Terms Disclosure: Annual Percentage Rates (APR) ranges and examples are based on information provided to Purefy by lenders participating in Purefy’s rate comparison platform. For student loan refinancing, the participating lenders offer fixed rates ranging from 2.73% – 7.99% APR, and variable rates ranging from 1.74% – 7.99% APR. The maximum variable rate is 25.00%. Your interest rate will be based on the lender’s requirements. In most cases, lenders determine the interest rates based on your credit score, degree type and other credit and financial criteria. Only borrowers with excellent credit and meeting other lender criteria will qualify for the lowest rate available. Rates and terms are subject to change at any time without notice. Terms and conditions apply.
8 Important Disclosures for Citizens.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 3.69%-9.92% (3.69%-9.92% APR). Fixed interest rates range from 4.49%-10.11% (4.49%-10.11% APR).
Undergraduate Rate Disclosure: Variable interest rates range from 6.39%- 9.60% (6.39% – 9.60% APR). Fixed interest rates range from 6.58% – 9.79% (6.58% – 9.79% APR).
Graduate Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).
Education Refinance Loan for Parents Rate Disclosure: Variable interest rates range from 3.69%- 9.09% (3.69%- 9.09% APR). Fixed interest rates range from 4.49% – 9.28% (4.49% – 9.28% APR).
Medical Residency Refinance Loan Rate Disclosure: Variable interest rates range from 3.69% – 9.16% (3.69% – 9.16% APR). Fixed interest rates range from 4.49% – 9.35% (4.49% – 9.35% APR).