Public Service Loan Forgiveness
If you aspire to work in the public service sector, you'll find that the reward is not only emotional—but possibly monetary, as well. That's because the College Cost Reduction and Access Act of 2007 established a program that forgives some federal student loans under certain circumstances.
This government program provides forgiveness for the remaining balance (principal and interest) on eligible Direct Loans after the borrower makes 120 qualifying monthly payments while working in a qualifying public service position.
Only qualifying payments made after October 1, 2007 count towards PSLF; therefore, the first forgiveness of loan balances will not occur until October 2017 (at the earliest).
Eligible Loans: Any non-defaulted loan made under the Direct Loan program may be eligible. These include:
- Direct Stafford Loans (Subsidized and Unsubsidized)
- Direct PLUS Loans
- Direct Consolidation Loans
Other Federal Loans:
The following federal student loan programs may also be eligible for PSLF if they are consolidated into the Direct Loan Program*:
- Federal Family Education Loans - (Stafford, PLUS, and Consolidation Loans)
- Federal Perkins Loans
- Certain Health Professions and Nursing Loans
*Only payments made on the Direct Consolidation Loan will count toward the required 120 monthly payments needed for forgiveness.
1. Repayment Plans: Borrowers must not be in default on the loan(s) and must make 120 required monthly payments while in an eligible repayment plan. Eligible repayment plans include:
- Standard Repayment
- Income Contingent Repayment
- Income-Based Repayment
- Pay As You Earn Repayment
- Other Direct Loan repayment plans, if certain conditions are met. For more information review: PSLF Program Q&As for Borrowers
2. Public Service Employment: Borrowers must be employed full-time (at least 30 hours per week) in a qualifying public service position (a) during the period in which he or she made each of the 120 monthly payments, (b) at the time of application for loan forgiveness, and (c) at the time the remaining principal and interest are forgiven.
Qualifying Public Service Jobs
“Qualifying public service jobs” include work in 501(c)(3) non-profit organizations, and most medical schools and teaching hospitals. Sample fields include:
- Emergency management
- Military service (active duty)
- Public safety
- Public health
- and more*
*More details about Public Service Loan Forgiveness and Employer Certification forms can be obtained at Federal Student Aid .
Medical Students Evaluating Residency Programs
Does your potential residency location qualify as a “non-profit organization”?
Will it meet the criteria for this loan forgiveness program?
The best way to find out is to ask a direct question during your interview. The answer may help you decide where you want to do your residency.
Use the Employment Certification Form for PSLF to keep track of eligible employment.
Disclaimer: This fact sheet provides a summary of the Public Service Loan Forgiveness Program and is intended as general information only. See the Steps to Follow for PSLF Fact Sheet for more details. The information in this document is based on federal regulations and is subject to change.
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