Public Service Forgiveness Programs

In 2007, Congress created the Public Service Loan Forgiveness Program to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance due on their eligible federal student loans after they have made 120 on time payments on those loans under certain repayment plans while employed full time by certain public service employers.

What kinds of employment qualify?

Qualifying employment is any employment with a federal, state, or local government agency, entity, or organization or a non-profit organization that has been designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC). The type or nature of employment with the organization does not matter for PSLF purposes. Additionally, the type of services that these public service organizations provide does not matter for PSLF purposes.

A private non-profit employer that is not a tax-exempt organization under Section 501(c)(3) of the IRC may be a qualifying public service organization if it provides certain specified public services. These services include emergency management, military service, public safety, or law enforcement services; public health services; public education or public library services; school library and other school-based services; public interest law services; early childhood education; public service for individuals with disabilities and the elderly. The organization must not be a labor union or a partisan political organization.

  • Emergency Management
  • Military Service
  • Public Safety- police, firemen, etc.
  • Law enforcement
  • Public Interest Law services
  • Early childhood education including licensed or regulated health care
  • Public Service for individual with disabilities and elderly
  • Public Health ( nurses, full time professionals engaged in health care practitioners occupations and health care support occupations?)
  • Public education
  • Public library or other school based services

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Take Advantage of our Public Service Total Debt Forgiveness Programs

To maximize your PSLF benefit, Student Servicing will qualify you for the Income-Based Repayment (IBR) Plan or the Income-Contingent Repayment (ICR) Plan, which are two of the repayment plans that qualify for PSLF.

Other PSLF-qualifying repayment plans are the 10-year Standard Repayment Plan or any other repayment plan where your monthly payment amount equals or exceeds what you would pay under a 10-year Standard Repayment Plan.

Before deciding which repayment plan you want to use to repay your Direct Loans, it is important that you understand the implications and costs of that decision. The longer you make PSLF-qualifying payments under a 10-Year Standard Repayment Plan, the lower the remaining balance on your loans will be when you meet all of the PSLF Program’s eligibility requirements. In fact, if you make all of the required 120 monthly payments under the 10-Year Standard Repayment Plan, there will be no balance left on your loans to be forgiven.

Under the IBR and ICR plans, your monthly payment amount will likely be lower than under any of the other PSLF-qualifying repayment plans and your repayment period will likely be longer. Because of the longer repayment period, additional interest that will accrue on your loan, and the smaller monthly payment amount, you will be left with a higher loan balance that could be forgiven. However, if you ultimately do not meet the eligibility requirements for PSLF, you will be responsible for repaying the entire balance of your loan, including all accrued interest.

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Teacher Loan Forgiveness

In order to qualify for a teacher forgiveness loan program you must have met the following requirements:

  • You must not owe any payments on your current loan.
  • You must not be in default, and the only possible exception is if you have made payment arrangements in advance.
  • You must agree to teach for five years, usually in an area that needs highly qualified teachers. This means the school must qualify for Title I funds and have a student population of which more than 30S% also qualify for Title I assistance. The schools that qualify are listed in the annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits.

Teacher Loan Cancellation

Total cancellation of teacher loans is offered to students that accepted Federal Perkins Loans. Generally those students able to get a loan completely cancelled work full time at a low-income school. However, teaching in some specific subject areas also may qualify for loan cancellation.

In order for teachers to have their student loans cancelled they must met some or more of these requirements:

  • Have worked full time in a public or non-profit school system.
  • Teach in a school that primarily caters to low-income families
  • Be one of the following: a special ed teacher, a mathematics teacher, a science teacher, a foreign language teacher, or focus on any other subject in which your particular state deems to have a shortage of qualified professional teachers