Public Service Loan Forgiveness: Eligibility And Application Process

Public Service Loan Forgiveness: Eligibility And Application Process – Emergency COVID-19 assistance includes a payment freeze and 0% interest on federal student loans. Check /coronavirus for the latest updates on when this help will end.

Read on for a quick summary of what you need to know about how a payment freeze affects Public Service Loan Forgiveness (PSLF) and Temporary Extended Public Service Loan Forgiveness (TEPSLF).

Public Service Loan Forgiveness: Eligibility And Application Process

You can earn credit toward PSLF and TEPSLF as if you continued to make regular monthly payments. You can think of these as $0 payments. All you have to do is submit the PSLF form to get the down payment loan.

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You can get a refund for any payments you make during the payment pause. Even if you receive compensation, that month still counts toward PSLF as long as all other qualifications are met. Just call your service provider to request a refund.

You can still apply for and receive forgiveness if you reach your 120 qualifying payments during the payment freeze. If you qualify for forgiveness, the amount forgiven will be the principal and interest paid after you make your 120th qualifying payment. Learn about eligibility requirements for PSLF and TEPSLF.

You must continue to work full-time in order for suspended payments to an eligible employer to count toward PSLF. Full-time means either 30 hours per week or whatever your employer considers full-time, whichever is greater. You can meet the full-time requirement by working part-time for multiple employers, but they must all be qualifying employers.

If you no longer work full-time for a qualified employer or have lost your job, your suspended payments will not count toward PSLF. But you don’t completely lose your eligibility for PSLF. If you later meet the requirements for qualified employer and full-time status, the payments you make at that time will count toward PSLF. Those new qualifying payments can be added to the number of qualifying payments you had before you lost your job or full-time status.

Changes To The Public Service Loan Forgiveness Program

In most cases, it is a good financial strategy to make additional payments while the interest is set at 0%. If you are seeking PSLF, however, additional payments may not be in your best interest.

If you make payments during the payment pause, they will not make you eligible for PSLF sooner. The $0 payments withheld already qualify for your required 120 PSLF payments. So not making extra payments maximizes the amount you can get in forgiveness.

If electronic submission is not possible, you can also manually submit the PSLF form. After going through the PSLF Help tool, you can

You can sign and submit your PSLF form online and your employer can digitally sign to verify your employment.

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It’s important to recertify on time to stay in your IDR plan. If you’re not in an IDR plan, payments you make after the stoppage ends will not count toward PSLF.

But you don’t have to re-verify your income until the pay freeze is over. As part of the payment suspension, your revalidation date has been delayed. Your service provider will contact you to let you know when you need to reconfirm. Keep an eye out for the email or letter to make sure you don’t miss your revalidation deadline.

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Consider how you will be when repayment resumes. You can re-apply early. If you reconfirm, your new payment amount will start after the payment suspension ends. If you want to re-approve during the payment moratorium, contact your loan servicer.

Do I Qualify For Federal Student Loan Forgiveness?

If your address, phone number or other contact information has changed, be sure to update your loan servicer.

There is no fee for payment termination and other federal student loan benefits, either from the federal government or from your loan servicer. If someone asks for money to stop paying your loans or to help you apply for PSLF (for example), it’s a scam. Learn how to avoid student aid scams. You are here: Home / US Student Loan Center / Student Loan Forgiveness / Public Service Loan Forgiveness Program

If you’re looking for a way to have some of your federal student loan debt forgiven, you may want to look into Public Service Loan Forgiveness (PSLF).

To qualify, you must have worked for a U.S. federal, state, local, or tribal government or a nonprofit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code.

Navigating The Public Service Loan Forgiveness Program

The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 eligible monthly payments under a qualifying repayment plan while working full-time for a qualified employer.

Your specific job with a qualifying employer does not matter, just that you work for any level of government or non-profit organization. Employers such as unions, partisan political organizations, and for-profit organizations are NOT eligible for PSLF.

The full-time requirement can be met by working 30 hours per week in one qualifying job or by working more than one qualifying part-time job, averaging at least 30 hours per week. Any religious instruction, worship service, or conversion may not count toward your 30 hour requirement.

Loans that qualify for PSLF are direct loans. This does not include FFEL or Perkins loans. If you consolidate all of your federal student loans into one direct consolidation loan, they may qualify for PSLF. Private loans do not qualify for PSLF.

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If you choose to consolidate your loans, only the payments made on your new Direct Consolidation Loan count toward the payments required for PSLF.

In order for your 120 payments to qualify for PSLF, you must be on a qualified repayment plan and pay each payment in full and on time. There is no requirement that these qualifying payments be consecutive. If you change employers, your previous payments will still count towards PSLF.

Qualifying repayment plans are all income-based repayment plans that base your payment on your current income. Standard Repayment Plan, Gradual Repayment Plan, Extended Repayment Plan, or Alternative Repayment Plan are not included.

One important detail about PSLF is that you must complete and submit Public Service Loan Forgiveness each year; Employment Certification Form (ECF). You must also submit an ECF form if you change employers.

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Another great benefit of the PSLF program is that the amount forgiven is not considered taxable income. So after 10 years of making payments, your debt is forgiven free and clear.

PSLF forgives the remaining balance on your loan after 120 payments or at least 10 years, and the amount forgiven is tax-free.

Student loan forgiveness can be obtained by making your payments on a conditional income plan for 20 or 25 years. The amount forgiven is considered taxable income in the year it is forgiven, and you will pay tax on it.

You must make 120 on-time, full, scheduled, monthly payments on your Direct Loans. Only payments made after October 1, 2007 qualify.

Are You Eligible For Public Service Loan Forgiveness?

Only loans you received under the William D. Ford Federal Direct Loan (Direct Loan) program will be eligible.

If you have FFEL program or Perkins loans, roll them into a direct consolidation loan to take advantage of PSLF.

Payments on a Direct Loan do not count when it is combined into a Direct Consolidation Loan. After joining, you need to make another 120 payments.

If you don’t know what type of federal student loans you have, check out the National Student Loan Data System.

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Moreover, payments less than the required amount are not complete. Thus, these late, incomplete payments do not count toward the required 120 qualifying payments.

Advance payments are not considered qualifying payments. Lump sum payments also do not qualify. If you are with AmeriCorps or Peace Corps, there are special rules for lump sum payments.

A standard 10-year payment plan also qualifies. PSLF also considers any plan with repayment amounts similar to the above plans.

If you make the required 120 payments of the standard 10-year repayment plan, there will be no balance left.

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Under the IBR, Pay As You Earn, and ICR plans, your monthly payment amount will likely be lower. It will also result in a longer repayment period.

As a result, additional interest will be charged on your loan. So you’ll be left with a higher loan balance that can be forgiven.

If you end up not eligible for PSLF, you may run into trouble. You must pay off the entire balance of your loan, including accrued interest.

Qualifying employment is any employment with a federal, state, or local government agency, organization, or organization, or with a nonprofit organization. The Internal Revenue Service (IRS) must designate it as tax-exempt.

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A tax-exempt, private, non-profit organization may still qualify. It should simply provide certain public services, such as the following:

However, for PSLF purposes it must be at least 30 hours per week. This does not include time spent attending religious instruction or religious services.

If you work on a contract for at least eight of the 12 months, you still have to work 30 hours a week. You must also receive credit from your employer for a full year’s work. You can work in several qualifying part-time jobs that are available to you

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