You’ve worked hard as a public servant since you finished school.
You’ve dutifully paid your student loans each month with the hope that the government would take care of the remainder.
And finally, after 10 long years, you’re ready to apply for loan forgiveness.
Here’s how to complete the Public Service Loan Forgiveness form — and tips to make sure you qualify.
What is the Public Service Loan Forgiveness Program?
The Public Service Loan Forgiveness (PSLF) Program launched in 2007. Its promise: If you pay your loans each month while working at a government or nonprofit agency, the remainder will be forgiven after 10 years.
Unfortunately, the execution has been far from smooth. In July, the Consumer Financial Protection Bureau (CFPB) reported that many loan servicers have been mishandling PSLF for their borrowers. Others have been critical of the cost of PSLF, and there’s been speculation the PSLF Program might be discontinued in 2018.
Regardless of future changes to the program, people already pursuing PSLF should remain eligible — and September 2017 was the first time any borrowers were eligible to apply for PSLF.
How to complete the Public Service Loan Forgiveness form
If you’re one of those borrowers, then it’s time to apply for PSLF.
The first step is completing this form. You’ll need to fill out the Public Service Loan Forgiveness application for each employer you had while making your 120 qualifying payments.
Unless you indicate otherwise, the Department of Education will put your loan in forbearance while it processes your application. During this period, you won’t have to make payments. Your loan will accrue interest, however, which you’ll have to pay if your application is denied.
After you complete the PSLF application, you can submit it via mail — or upload it directly to FedLoan’s site if FedLoan is your servicer. Addresses and instructions are on Page 4 of the application, where you’ll also find numbers to call for further assistance.
Once the Department of Education has received all your documentation, it will notify you. According to its PSLF FAQ page, processing times can vary based on factors such as:
- Whether you submitted Employment Certification forms over the years (if you did, it said your application “will likely be processed more quickly”)
- The number of employers you had
- Gaps in your employment or payment history
If your application is approved, the Department of Education will forgive all outstanding interest and principal on your eligible Direct Loans. If you made more than 120 qualifying payments, the extra amount will be refunded to you.
And you won’t have to pay taxes on the amount that’s forgiven, unlike some other forgiveness programs.
If, however, your application is denied, the Department of Education will notify you with the reason.
At that point, you’ll have to start paying your loans again. You’ll be responsible for any interest accrued during forbearance, and, as the Department of Education warned, that interest “may be capitalized.” That means the interest could be added to your principal, forcing you to make payments on a higher amount than you started with.
If you believe the Department of Education is mistaken, you can submit additional information that supports your case, and FedLoan Servicing will re-evaluate its decision.
Make sure you qualify for Public Service Loan Forgiveness
It’s important that you don’t apply for PSLF until you’re sure you qualify.
Putting your loans into forbearance could be an expensive mistake if your Public Service Loan Forgiveness application is denied. During the processing period, you’d also miss out on many months of making qualifying loan payments.
So, before you fill out the PSLF form, make sure you can check each of the four boxes below.
1. You have Direct Loans
Although there are many types of federal student loans, only Direct Loans are eligible for PSLF.
To check which types of loans you have, you can sign up for our student loan dashboard. If it says “Direct” below your loan, then it’s eligible for PSLF.
If you have several types of federal loans, you can consolidate them into a Direct Consolidation Loan so they’ll qualify — but your prior loan payments won’t count. In other words, the clock on your 120 payments will start over. So, think carefully before you do it.
Are your loans Direct Loans? If yes, keep going. If no, learn more about Direct Loan Consolidation.
2. You’re on an income-driven repayment plan
When you graduate from school, you’re automatically put on a standard 10-year repayment plan. But that wouldn’t work for PSLF; at the end of 10 years, there’d be nothing left to forgive.
So, you must be enrolled in an income-driven repayment (IDR) plan that sets your payments to a percentage of your income. If your payments drop as low as $0, that’s fine — but you must be on one of these plans.
Are you enrolled in an IDR plan? If yes, keep going. If no, learn more about income-driven repayment plans.
3. You work full time at a qualifying employer
Your job is what qualifies you for PSLF. You must work your employer’s definition of “full time,” or at least 30 hours per week, for a nonprofit or government agency.
To track your employers, you should send an Employment Certification form each time you switch jobs. And to prove your employment, the Department of Education suggested retaining W2s and pay stubs.
It’s important to note you must be working for a qualifying employer at the time of your application and at the time of forgiveness, according to the Department of Education. So, don’t join the private sector until your loans have been forgiven.
Did you work full time at a qualifying employer at the time of your 120 payments, and are you still working at one now? If yes, keep going. If no, learn more about qualifying public service careers.
4. You’ve made 120 qualifying payments
Lastly, you must’ve made 120 qualifying monthly payments. They must’ve been made after Oct. 1, 2007, in full and within 15 days of the due date and while you were on an IDR plan and working for an eligible employer.
The payments don’t have to be consecutive, though. If you, for example, were employed in the private sector between nonprofit jobs, you can count the payments you made on either end.
If you’re not sure how many qualifying payments you’ve made, you can log on to the FedLoan Servicing site to check. If your loans haven’t been moved over yet, you can submit the Employment Certification form — after which the DOE will send a letter revealing how many payments you have left.
Did you make 120 qualifying payments? And did you answer “yes” to all the questions above? Then you’re ready to apply for PSLF!
Take your time when you complete the Public Service Loan Forgiveness form, keep copies of everything, and make sure you remain at your qualifying job until your loans have been forgiven.
And whatever the outcome of your PSLF application, please contact us — we’d love to hear about your experience.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% 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 April 17, 2019, 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 04/17/2019. 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 firstname.lastname@example.org, or call 888-601-2801 for more information on our student 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.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
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.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.53% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|