Borrowers can qualify for the Public Service Loan Forgiveness (PSLF) Program by working in public service while making qualifying payments for a period of 10 years. This program can help offset the costs of schooling and the burden of student debt for professionals who choose to work at nonprofit or government organizations.
Qualifying for PSLF requires understanding the requirements and taking the right steps.
How Public Service Loan Forgiveness Works
You must be employed in government or in a 501(c)(3) nonprofit job to qualify for PSLF. Your loans must be in a qualifying income-driven repayment plan. Each full, on-time payment you make while satisfying these requirements will count toward the required 120 payments for forgiveness.
Borrowers are required to submit the PSLF forgiveness form to apply for loan forgiveness after making 120 monthly payments and while still working for a qualifying employer. The remaining loan balance is forgiven when the servicer verifies payments.
Military service members and federal employees are exempt from submitting an application, however, due to changes made to the PSLF program by the U.S. Department of Education (DOE) in October 2021. The government will automatically provide credit using federal data matches for these individuals beginning in 2022.
How to Qualify for PSLF
Borrowers must meet several requirements to qualify for PSLF.
The Employer Rule
You must work at a qualifying government or nonprofit organization. This includes government organizations at the federal, state, local, or tribal levels. A nonprofit organization qualifies if it’s tax-exempt under Section 501(c)(3) of the tax code, or if it provides a qualifying public service.
A nonprofit organization without 501(c)(3) status can be a qualified PSLF employer if it offers certain services, according to the Department of Education. These include law enforcement, emergency management, military service, public library services, or nursing.
You must meet your employer’s definition of working full-time, or work at least 30 hours per week, whichever is greater. Working part-time at two or more qualifying employers at least 30 hours a week will also qualify you.
Only loans made through the William D. Ford General Direct Loan Program (direct loans) qualified for PSLF prior to October 2021. The DOE has changed this provision as well. Loans from the Federal Family Education Loan (FFEL) Program or Perkins Loan Program are eligible.
The Repayment Plan
Borrowers must enroll in a qualifying repayment plan, which includes all income-driven repayment (IDR) plans. You must remain enrolled in your repayment plan and certify your income each year.
The standard repayment plan qualifies for PSLF, but this plan sets monthly payments to repay student loans in 10 years—the same amount of time it takes to become eligible for PSLF. This will leave no remaining balance to forgive.
You must make 120 qualifying monthly payments to complete the PSLF program. You must pay the full amount due no later than 15 days after the due date while working for a qualifying employer.
Navigating the PSLF program isn’t always straightforward or easy. As a result, some borrowers might think they’re making progress toward PSLF when their payments don’t actually meet the requirements.
Some common issues can derail borrowers’ progress toward PSLF:
- Ineligible loans: Private student loans don't qualify. Perkins loans and Federal Family Education Loans (FFEL) do qualify, however, subsequent to the DOE's October 2021 changes.
- Ineligible repayment plan: Payments must be made while enrolled in an IDR plan. Your payments may not qualify for PSLF if you don’t enroll in an IDR plan, or if you fail to recertify your income,
- Paying early or late: You can only make one qualifying payment per month toward PSLF. Early or extra payments won’t get you to 120 payments faster. Payments that are missed or that are more than 15 days late won’t qualify, either.
- Deferment or forbearance: Payments are suspended and you don’t get credit toward your 120 payments during deferment or forbearance periods unless you're on active duty military service. This is also DOE change from previous rules. Otherwise, you can contact your loan servicer to waive your deferment period so your payments will count if you’re able to make payments during a time of deferment.
The forbearance of student loan payments in response to the COVID-19 pandemic is treated differently for PSLF than other forbearances. You'll receive credit toward PSLF during the COVID forbearance as if you were making monthly payments as long as you meet other requirements.
Using the PSLF Help Tool
The Department of Education’s PSLF Help Tool helps borrowers understand the requirements for forgiveness. You must log in with your FSA ID to access the PSLF tool. Using it is relatively simple:
- Review the PSLF requirements and information on eligibility.
- Enter your employer information and the tool will tell you if it's a qualifying employer for PSLF.
- View each of your student loan’s eligibility or ineligibility for PSLF, along with an estimate of qualifying payments made.
- Receive recommended actions you can take to improve your eligibility for PSLF forgiveness.
The PSLF Application
There's only one PSLF form. It serves as both the PSLF application and the PSLF Employer Certification Form (ECF). You must submit this form to certify your employer and to find out if you’re on track for forgiveness, unless you're a military service member or a federal employee who's exempt. Take this step when you start your first qualifying job, and recertify once per year after that or when you change employers.
Submit the PSLF application for forgiveness after you've made 120 qualifying payments. You must be working for a qualifying employer when you apply. Take these steps to submit the PSLF form:
- Fill out the form. Check for any errors. You’ll be asked to indicate whether you’re checking your payments or employer, or if you’re applying for forgiveness.
- Portions of your PSLF application must be completed and certified by your employer.
- Submit this form to FedLoan, the student loan servicer that handles PSLF loans, by online upload, mail, or fax.
- The servicer will verify your eligibility and notify you of any adjustments you should make to qualify for PSLF.
- The servicer also determines how many qualifying payments you’ve made, and how many you have to go.
In September 2021, FedLoan announced that it would stop servicing federal student loans once its current contract ends. Loans serviced by FedLoan would be transferred to MOHELA between 2021 and 2022. The change should not impact student loan forgiveness or any other programs. If you've been working with FedLoan, keep an eye out for more info from FedLoan and MOHELA about this transfer.
You’ll be notified and the remaining principal and interest is forgiven, tax-free when the servicer determines you’ve made 120 qualifying payments.
The DOE's 2021 changes also implement a process to review PSLF applications that are denied due to errors, and to allow borrowers to have their determinations reconsidered. You can also look into the Temporary Expanded PSLF (TEPSLF) program if you're denied. It offers limited expanded forgiveness for borrowers whose payments were made through an ineligible repayment plan.