Public Service Loan Forgiveness? Yes please! | 01.31.12
Public Service Loan Forgiveness is a federal program that rewards public service employees for working in their chosen professions. As you might suspect, the reward is forgiveness of your student loan balance, an offer that many seek but few are able to take advantage of.
The Department of Education has recently made improvements to the PSLF process. While the requirements remain the same, they are more clear, and there’s a variety of new documentation to help get you through the application process.
If you’re not familiar with Public Service Loan Forgiveness here’s a brief overview:
Who is it for?
Employees who have worked for a qualifying public service organization for a minimum of 10 years. This does not mean your specific role at the organization needs to qualify, you simply must work for a qualifying organization.
Qualifying organizations include:
- Federal, state, or local government organizations/agencies
- Non-Profit organizations that are tax-exempt under Section 501©(3) of the IRS guidelines
How do I qualify?
You must make 120 on-time monthly payments (yes, this is equal to 10 years) on your Direct Loans under a qualifying repayment plan. (Only payments made after 2007 are eligible)
Qualifying repayment plans include:
- Income-Based Repayment (IBR)
- Income-Contingent Repayment
- Standard, 10 year Repayment
- Any other Direct Loan Repayment Plan where monthly payments meet or exceed the amount you would have paid under Standard Repayment
The Department of Education released an Employee Certification Package. These documents include specific information on how to qualify, directions for completing the certification form, as well as the form itself.
Hopefully, these updates to the PSLF information will help borrowers easily track their employment over the 10 years of payment. To learn more or to get the PSLF certification package, visit the Federal Student Aid website.
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