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You may qualify for Public Service Loan Forgiveness, but you’ll still make payments for at least 10 years

  • Public Service Loan Forgiveness, or PSLF, is mostly for governmental and non-profit workers.
  • You’ll need to make 120 qualifying monthly payments to be eligible for forgiveness. 
  • The program’s track record has been shaky, so don’t rely on forgiveness as a cure-all.
  • Read more of Insider’s loan coverage here.

Federal student loan debt across the country is ballooning, leaving many borrowers unable to pursue other financial goals. The total amount owed to the government is $1.59 trillion, according to the latest figure from the US Department of Education. 

While the situation may seem bleak, if you work in an eligible public service job, you may be able to take advantage of Public Service Loan Forgiveness, a federal program designed to alleviate some of that financial burden. 

What is Public Service Loan Forgiveness (PSLF)?

Public Service Loan Forgiveness, or PSLF, was signed into law in 2007 and forgives the debts of graduates working in the public sector after at least 10 years of service and qualifying payments. Your specific job doesn’t matter, just that you work for a public service employer. There’s no cap to the amount of money that can be forgiven. 

You won’t be eligible for the program if you work for a labor union, partisan political organization, or for-profit company (which includes government contractors). 

Full-time employment is defined as working at least 30 hours per week or by meeting your employer’s definition of full-time, whichever is greater. All Direct Loans are eligible for the program, and if you have an ineligible federal loan from Federal Family Education Loan Program (FFEL) or the Perkins Loan Program, you can consolidate those debts into a direct consolidation loan to qualify. 

Income-Driven Repayment (IDR) plans base your monthly payments on your income — and you may pay less per month with an IDR than with a 10-year Standard Repayment Program.

While payments made on a 10-year Standard Repayment Programs are qualifying payments, you’ll already have paid off your entire loan balance after 120 months, and there won’t be anything left to forgive. To take advantage of PSLF, you’ll want to go with an IDR plan. 

However, your payments may increase with an IDR plan depending on the amount you owe and your income, so you might not benefit from the PSLF program, even if you qualify.  

How to qualify for PSLF

You can’t make a qualifying payment when you’re in school or when your loans are in deferment, forbearance, or their grace period.

You won’t qualify for PSLF sooner by making higher payments per month; you must make payments to cover 120 separate months. These payments do not need to be consecutive. 

You’ll need to submit this form each year or when you change employers. The government will use the information you put down to let you know if you’re making qualifying PSLF payments. 

Private student loans aren’t eligible for PSLF.

Is PSLF a reliable program?

During the coronavirus pandemic, the government has suspended payments on federal student loans through September 30, 2021. If you continue to work for a qualifying employer during this period, you will receive credit toward PSLF as if you’d continued to make on-time payments. 

However, you shouldn’t bank on student loan forgiveness through PSLF, as the program’s shaky track record has left many borrowers in the lurch. 

The program has come under fire by lawmakers and borrowers for its high denial rate; recent Education Department data found that 98% of borrowers are still being rejected from PSLF. Biden campaigned on fixing the program, but some experts and lawmakers say a confusing system is at fault.

In a letter sent to Education Secretary Miguel Cardona in May 2021, Democrats pushing to fix the program described it as “beset by numerous ‘donut holes’ that disqualify certain types of loans, repayment plans, and the payments themselves.” 

While the PSLF program may help you get student loan debt forgiven, its real-world implementation has been disappointing. Consider all of your repayment options before relying on PSLF.

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