Public Service Loan Forgiveness (PSLF)
PSLF offers tax-free forgiveness of the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments while working full-time for a qualifying employer.
1. The Four Core Requirements
To qualify for PSLF, you must satisfy all four conditions simultaneously for each of the 120 payments:
A. Qualifying Loans (Direct Loans Only)
- Eligible: Federal Direct Subsidized, Unsubsidized, PLUS, and Consolidation Loans.
- Ineligible: FFEL, Perkins, and private loans are NOT eligible unless they are consolidated into a **Direct Consolidation Loan**.
B. Qualifying Employment (Public Service)
- Government Organizations: Federal, state, local, or tribal government. This includes public schools, colleges, military service, and emergency management.
- 501(c)(3) Non-profit Organizations: Any non-profit organization that is tax-exempt under section 501(c)(3) of the Internal Revenue Code.
- Other Non-profits: Non-501(c)(3) organizations that provide specific qualifying public services (e.g., public health, public education, public safety).
- Ineligible: Most for-profit organizations (including for-profit hospitals, lawyers, etc.).
C. Full-Time Employment Status
You must work full-time for a qualifying employer. This generally means working for your employer or employers for an annual average of at least 30 hours per week.
D. Qualifying Payments
You must make 120 separate payments after October 1, 2007. The payments must be:
- Made under a qualifying repayment plan (see Section 2).
- Made for the full amount due.
- Made no later than 15 days after the due date.
2. Qualifying Repayment Plans
To maximize PSLF, you must be enrolled in an Income-Driven Repayment (IDR) plan. Qualifying plans include:
- REPAYE (Revised Pay As You Earn) or **SAVE Plan** (Saving on a Valuable Education)
- PAYE (Pay As You Earn)
- IBR (Income-Based Repayment)
- ICR (Income-Contingent Repayment)
Tip: The 10-year Standard Repayment Plan is technically qualifying, but by the time you complete 10 years, your loan will be paid off, leaving no balance to forgive. IDR plans are essential for PSLF benefit.
3. The Essential PSLF Action: ECF/Certification
You must submit the **PSLF Form** (formerly the Employment Certification Form or ECF) annually or whenever you change jobs. This form verifies your employment and tracks your progress toward the 120 payments. Failure to submit this form means your payments are not officially tracked.
The form is available directly through the official StudentAid.gov website.