Are you currently employed with or planning a career with a Public Service organization?  If so, you should acquaint yourself with the Public Service Loan Forgiveness program (PSLF).  In 2007, Congress established the PSLF program with the purpose of encouraging individuals to pursue full-time work in public service jobs.  Under the PSLF program, borrowers may qualify for forgiveness of the remaining balance due on their federal loans providing they meet certain qualifying criteria. 

Eligibility requirements include:

  • You must have eligible loan types
  • You must make 120 payments in a qualifying repayment plan (and they don’t have to be consecutive)
  • Maintain full-time employment status
  • Work for a qualifying public service organization

Besides the obvious (the forgiveness of student loan debt), another sought after feature of PSLF is the income driven repayment options.  The two most common include – Income Based Repayment (IBR) and the new Pay As You Earn (PAYE).  Both plans help borrowers to keep their monthly student loan payments affordable while working in Public Service.  To qualify for either plan, you must have a “Partial Financial Hardship”.  So what’s a financial hardship?  Uncle Sam defines it this way – You have a partial financial hardship if the monthly amount you would be required to pay on your eligible federal student loans under a 10-year Standard Repayment Plan is higher than the monthly amount you would be required to repay under IBR or Pay As You Earn.  For more information on income driven repayment plans, visit the Federal Student Loan Repayment Plans website. 

There are many career choices available that would qualify a borrower for loan forgiveness under the PSLF program.  For a comprehensive list of public service jobs, check out the PSLF Fact Sheet.       

One other piece of good news about the PSLF program is – the IRS does not consider the forgiven amounts as income for tax purposes.  Hey, now that is good news!  To sum it up, make sure you educate yourself on the PSLF program.  You can find out more by checking out the PSLF website or visiting the Student Financial Aid Office.