Loan forgiveness

Public Service Loan Forgiveness (PSLF)

Requirements:

  • Work in public service (nonprofit, government, state jobs) for 10 full years
  • Doesn’t need to be consecutive
  • Doesn’t need to be with the same employer
    • Have an employment verification form signed each year by the employer and submit to the servicer or FedLoan Serving (the servicer of all PSLF loans)
    • Make qualifying payments on loans each month
  • Can be either a standard repayment plan or an income-driven plan
  • Any remaining balance will be forgiven, tax-free
    • Some legislation proposes anyone just starting PSLF will be subject to a maximum forgiveness amount of $57,500 (this is not yet final)
  • Only Direct loans qualify for this program. Must consolidate if some loans aren’t Direct, but upon consolidation, you start over towards accumulating the 120 payments.

Application Process

Public Service Loan Forgiveness (PSLF) 

First, you need to complete the Public Service Loan Forgiveness Form PSLF Form 

After you submit a PSLF Form, your loans will transfer to the PSLF servicer. After the PSLF servicer determines how many qualifying payments you made during the employment period on your form, you’ll receive a letter telling you the number of qualifying payments you have made.

The number of qualifying payments you have made will only be updated whenever you submit another PSLF form that documents a new period of qualifying employment.

You can find out how many qualifying payments you’ve made by logging in to your account with the PSLF servicer and viewing your loan details or by looking at your most recent billing statement.

New as of November 2020 and beyond

  • Single form
  • Will automatically determine eligibility for forgiveness and provide it, if eligible 
  • If not eligible, will explain why and tell the borrower how close to PSLF and TEPSLF

Public Service Loan Forgiveness (PSLF) Help Tool

The PSLF Help Tool will

  • help you understand more about PSLF and TEPSLF and what you need to do to participate and possibly have your loans forgiven;
  • help you assess whether your employer qualifies for PSLF.
  • help you assess whether your loans qualify for PSLF; and
  • use the information we have about your federal student loans to explain other actions you should or must take if you want to receive PSLF or TEPSLF.

At this time, the PSLF Help Tool won’t allow you or your employer to electronically sign the forms that the tool will generate for you. Therefore, after you complete the PSLF Help Tool process, you will need to print the PDF document that the tool generates, sign it yourself, have your employer sign it, and then submit the form to the PSLF servicer as instructed on the printed PDF document.

Use the PSLF Help Tool


Teacher Loan Forgiveness

If you are a teacher and also a new borrower (i.e., you did not have an outstanding balance on a Direct Loan or FFEL Program loan on Oct. 1, 1998, or on the date, you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998) and have been teaching full-time in a low-income elementary or secondary school or educational service agency for five consecutive years, you may be able to have as much as $17,500 of your subsidized or unsubsidized loans forgiven. PLUS, loans cannot be included. For more information, go to Forgiveness Cancellation. If a student has a Federal Perkins Loan, see Perkins Loan Cancellation for teacher cancellation in that loan program.

Perkins Loan Cancellation/Discharge

The following Federal Perkins Loan Program cancellations apply to individuals who perform certain types of public service or are employed in certain occupations. For each complete year of service, a percentage of the loan may be canceled. The total percentage of the loan that can be canceled depends on the type of service performed. Depending on the type of loan you have, and when that loan was taken out, you may be eligible to cancel part of or your entire loan if you have served as one of the following:

  • Volunteer in the Peace Corps or ACTION program (including VISTA)
  • Teacher
  • Member of the U.S. armed forces (serving in areas of hostilities)
  • A nurse or medical technician
  • Law enforcement or corrections officer
  • Head Start worker
  • Child or family services worker
  • Professional provider of early intervention services
  • There is no standard application form for Perkins Loan cancellations. Contact the school that you were attending when you received the loan.

*Sources