The Public Service Loan Forgiveness program (PSLF) was started on October 1st, 2007. This program allows those who qualify to make 120 monthly payments (commonly said as 10 years) with the added time for application submission and approval. In this program, payments are cumulative, rather than consecutive, meaning it will take at least 10 years to make the required 120 monthly payments based on your employment status. Once these payments are made in conjunction with work in a qualifying public service field, all remaining debt will be forgiven tax-free.

To qualify for PSLF, you must:

work for a government agency, 501c3 nonprofits, or certain types of nonprofit organizations

work full-time for that agency or organization (defined as 30+ hours per week)

have Direct Loans

be enrolled into an income-driven repayment plan.

have made 120 qualifying payments towards your direct loans*

Once all of these conditions are met, the Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your qualifying loan(s).

*All information related to Public Service Loan Forgiveness eligibility originates from the Department of Education.

For more information, visit https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation

You need to submit an Employment Certification Form for each qualifying employer you worked for. Your employment can be certified by an official who has access to your employment or service records and is authorized to certify your employment. While often Human Resources will certify employment, check with your organization to see who can certify your PSLF Form. In the event that you are the only able to certify your qualifying employment, you are able to do so. However, the Department of Ed will ask for additional information regarding employment verification (W-2s, earning statements, etc).

The Limited PSLF Waiver provided temporary flexibilities that relaxed some of the strict requirements of the program. Some of these flexibilities ended on October 31, 2022. However, the following flexibilities are now permanent:

Help borrowers earn progress toward PSLF

• Allow borrowers to receive credit toward PSLF on payments that are made late, in installments, or in a lump sum. Prior rules only counted a payment as eligible if it was made in full within 15 days of its due date.

• Count certain periods in deferment or forbearance toward PSLF to avoid instances where a borrower may have faced confusing choices about pausing payments or getting credit toward PSLF. These periods include:

o Cancer treatment deferment

o Military service deferment

o Post-active-duty student deferment

o Economic hardship deferment, which includes service in the Peace Corps

o AmeriCorps and National Guard service forbearances

o U.S. Department of Defense Student Loan Repayment Program forbearance

o Administrative or mandatory administrative forbearances

• Borrowers will receive a weighted average of existing qualifying payments toward PSLF when they consolidate their Direct Loans after the end of 2023 (when the ability to get full consolidation credits expires). Under the new regulations, for example, a borrower with 60 qualifying payments on Direct Loan with a balance of $30,000 who consolidates their loan with another Direct Loan with a balance of $30,000 with 0 qualifying payments will have a new payment count of 30 payments.

Simplify criteria to help borrowers certify employment

• Adopt a single standard of full-time employment at 30 hours a week. Prior rules required borrowers to either work 30 hours per week at multiple jobs or whatever their employer defined as full-time. This created confusing and varying standards. A single 30-hour-a-week requirement will make it easier for borrowers and employers to establish what it means to be full-time.

• Require employers, for purposes of PSLF, to give adjunct and contingent faculty credit of at least 3.35 hours of work for every credit hour taught. Historically, employers have struggled to determine the work hours of adjunct instructors. This minimum conversion factor will help employers figure out the number of hours to certify.

• Allow a qualifying employer to certify employment for a contractor if that individual is providing services that by State law cannot be filled or provided by an employee of that organization. The Department is aware of specific circumstances where existing state laws generally prevent doctors at nonprofit hospitals in California and Texas from working for the hospital directly. This change would cover those individuals as well as any other contractor whose employment is similarly barred by state law.

Provide opportunities to correct problems

• Borrowers will be able to access a hold harmless option to have other periods of deferment and forbearance potentially counted toward PSLF if they make payments equivalent to what they would have owed at the time. This includes getting credit for periods during which the borrower would have had a $0 payment.

• FSA formalized the reconsideration process for borrowers to have their applications reviewed again if there are errors made in review.

FFEL loans may be eligible for PSLF by consolidating them into a Direct Consolidation Loan. However, FFEL loans which are not consolidated into a Direct Consolidation Loan are not eligible for PSLF.

Any forgiveness that is granted through December 31, 2025 will not be taxed on the federal-level. This is a temporary policy that advocates--including SDCC--will push to have made permanent. As for state income taxes, it depends on where you live. If your state does not have a state income tax, you won't have to pay taxes on student loan forgiveness. Most states with an income tax do not tax student loan forgiveness. The following states tax some forms of student loan forgiveness: Mississippi (all kinds), Arkansas, Indiana, North Carolina, & Wisconsin (just IDR and potential broad-based), and Minnesota (just broad-based). In this context, broad-based refers to the sweeping student debt cancellation that the Biden Administration continues to pursue.

No. Private education loans are not eligible for PSLF and cannot be consolidated into a Direct Consolidation Loan.

No. Direct Loans that are in default are not eligible for PSLF unless the default is resolved. Learn more about getting our loan out of default here.

Yes. Direct PLUS Loans are made to graduate or professional students and to parents of dependent undergraduate students. Like other Direct Loans, Direct PLUS Loans are eligible for PSLF. However, there are additional factors to consider if you are a parent who has taken out a PLUS loan.

First, your PSLF eligibility is based on your qualifying employment, not on the employment of the dependent student on whose behalf you borrowed.

Second, PLUS loans made to parents may not be repaid under any of the income-driven repayment plans, the repayment plans that are best for borrowers seeking PSLF. However, if you consolidate a PLUS loan that you took out on behalf of your child, you may then repay the new Direct Consolidation Loan under an income-driven repayment plan called the Income-Contingent Repayment Plan. You can’t repay under the Revised Pay As You Earn, Pay As You Earn, or Income-Based Repayment plans.

Note: PLUS loans made to graduate and professional students (as well as Direct Consolidation Loans that repaid PLUS loans made to graduate and professional students) may be repaid under any of the income-driven repayment plans. (ED)

This information originates from the Department of Education.

Normally the answer would be no, but under the one-time account adjustment, ED will count those previous credits before consolidation. After the end of 2023, borrowers will receive a weighted average of existing qualifying payments toward PSLF when they consolidate their Direct Loans.

Any U.S. federal, state, local, or tribal government agency is considered a government employer for the PSLF Program. This includes employers such as the U.S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts (including entities such as public transportation, water, bridge district, or housing authorities).

This information originates from the Department of Education.

Those organizations that are tax-exempt under section 501(c)(3) or not tax-exempt but still provides a qualifying service according to the IRS Code. This includes most private elementary and secondary schools, private colleges, and universities. Partisan political organizations and labor unions do not count.

A not-for-profit organization that is not exempt under section 501(c)(3) of the Internal Revenue Code must provide one of the following public services:

- Emergency management

- Military service: service on behalf of the U.S. armed forces or the National Guard

- Public safety

- Law enforcement: crime prevention, control or reduction of crime, or the enforcement of criminal law

- Public interest law services: legal services provided by an organization that is funded in whole or in part by a U.S. federal, state, local, or tribal government

- Early childhood education: includes licensed or regulated childcare, Head Start, and state-funded prekindergarten

- Public service for individuals with disabilities and the elderly

- Public health: includes nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health support occupations

- Public education

- Public library services

- School library or other school-based services

This information originates from the Department of Education.

If your qualifying organization hired you, pays you, and sends you a W-2 Form each year, you are an employee. This is true only if your organization is a qualifying organization.

The specific job that you perform doesn’t matter, as long as you’re employed by a qualifying employer. For example, if you’re a full-time employee of a public school system, your employment would meet the requirements for PSLF, regardless of your position (teacher, administrator, support staff, etc.).

Yes, as long as the combined number of hours you work for each employer equals at least 30 hours per week. Each employer must be a qualifying employer for the employment to be included in determining whether you are employed on a full-time basis.

For example, if you worked for one qualifying employer for 10 hours per week and you concurrently worked for a second qualifying employer for 20 hours per week, this would meet the 30 hours per week requirement.

This information originates from the Department of Education.

No, you must be employed directly by the qualifying employer unless that individual is providing services that by State law cannot be filled or provided by an employee of that organization.

Public schools count toward PSLF since they are local government organizations. Non-profit private schools also count toward PSLF. And as long as a university is not operating for-profit, most qualify for PSLF.

Yes. Be sure to provide documentation of employment at the same time as you made each of the required 120 payments.

Yes. Full-time employees may perform their work from anywhere but must be employed in the United States.

The company for which you work must operate in the United States.

No. The only exception to this rule is if you work for the US Government as a part of a delegation to any such intergovernmental organizations.

Yes. The following islands are considered a part of the USA for PSLF:

- American Samoa

the Commonwealth of Puerto Rico

Guam

the Virgin Islands

the Commonwealth of the Northern Mariana Islands

the Republic of the Marshall Islands

the Federated States of Micronesia

the Republic of Palau

Only AmeriCorps or Peace Corps volunteers qualify. Otherwise, you must be a full-time, paid employee of a qualifying organization.

It depends on the terms of your fellowship. It would qualify only if you are considered an employee who is hired and paid by the qualifying employer where you are serving the fellowship.

Vacation or leave time provided by your employer is counted as hours worked in determining whether you are a full-time employee. This includes leave taken for a qualifying condition under the Family and Medical Leave Act of 1993.

Yes, you may certify your own employment if you are the only employee of the organization who can do so. However, additional documentation concerning your employment will be requested, such as:

earnings statements

IRS W-2 forms

your application for tax-exempt status

or any other documentation required to be filed with the IRS on a periodic basis regarding the activities of the organization

This information originates from the Department of Education.

Yes. If the organization that issues your W-2 is doing so only under an agreement to provide payroll or other administrative services for the qualifying organization, and the qualifying organization considers you to be an employee of that organization, then your employment qualifies for PSLF.

This information originates from the Department of Education.

There is no income requirement to qualify for PSLF. It’s all based on your debt to income ratio.

Unfortunately, you must wait until you graduate in order to apply for PSLF. This is because you are “in school forbearance” while in school. And for 6 months after getting out of school, you’ll be in a grace period. So if you want to start PSLF during the grace period, you must call your servicer to end your 6 month grace period.

If your PSLF application is approved, then you will be notified that the entire remaining balance of your eligible Direct Loans will be forgiven, including all outstanding interest and principal.

If you made payments after your 120th qualifying payment, those payments will be treated as overpayments and refunded to you.

Yes! It will take some time for the Department of Education to review your PSLF application and approve you for loan forgiveness. In the meantime, keep making on-time, monthly qualifying payments when you are required to.

If you keep making qualifying monthly payments after reaching 120 required PSLF payments, all of those additional payments will be refunded.

You may also enter a forbearance until your payment count is updated. But, it is important to note that if you enter a forbearance and don’t reach 120 payments, you would be responsible for accrued interest when the forbearance ends and may not receive credit for the time you were in forbearance.

There is currently a backlog of PSLF applications, so please expect the employment verification to take about 8-12 weeks for Mohela to get back to you with their verification.

Keep in mind that payments on federal loans are currently paused through August 31, 2023. Some borrowers' loans will be forgiven before repayment resumes, but not all will be processed.

If you haven’t received forgiveness by the time repayment resumes, keep making qualifying monthly payments until your PSLF application has been processed and you’ve been certified for loan forgiveness.

Borrowers with at least one approved PSLF form will begin to see their PSLF counts adjusted in Fall 2023.

Borrowers who consolidate will have their PSLF counts temporarily reset to zero, and these counts will begin adjusting in Fall 2023.

PSLF counts will continue to be adjusted each month until the IDR counts for all federally held FFELP and Direct Loans are adjusted in 2024.

After the adjustment in 2024, all periods credited toward IDR will also be credited toward PSLF for eligible loans and periods where the borrower certifies public service employment.

If you’ve applied or will apply for PSLF and certify your employment, you may see the benefits of this adjustment to your qualifying payment count.

These changes will be applied automatically, to all PSLF-eligible Direct Loans, including consolidated and unconsolidated parent PLUS loans.

If you believe you might benefit, use the PSLF Help Tool to certify periods of employment and track your progress toward forgiveness.

Borrowers who have commercially or federally held FFEL loans and who consolidate those loans into Direct Consolidation Loans before the end of the year will also get PSLF credit under the account adjustment.