Written by Elizabeth Exline
Reviewed byChris Conway,Director of Financial Education Initiatives and Repayment Management
Pursuing a career in public service has its rewards. Whether youbecome a teacher, a nurse or a public interest lawyer — or you enter into some other profession committed to the public good — working for the benefit of others can feel like an answered calling.
The advent of thePublic Service Loan Forgiveness (PSLF) programin 2007, however, brought a new incentive to a sector traditionally powered by little more than passion. Under the PSLF program, qualifying borrowers can apply for opportunities for loan forgiveness.
This seems like an obvious perk, which makes its varied success somewhat ironic. Recent reports indicate thatmore than 9 million public service workers may be eligible for student-loan cancellation through PSLF, but fewer than 150,000 people have received loan forgiveness to date, suggesting that millions haven’t even applied.
What gives? Here, we take a closer look at what Public Service Loan Forgiveness is, who qualifies and what may be down the road for the program.
At its core, the Public Service Loan Forgiveness programwaives the balanceonfor qualified graduates if:
Yes, that’s a lot of qualifications. And yes, that’s at least 10 years of dutiful check-writing. The result, however, may just be worth all the hoop-jumping.
Direct loans are a loan program offered by the federal government and include:
Not all federal student loans are direct loans, however. Neither the Federal Family Education Loan (FFEL) program nor the now-retired Federal Perkins Loan program qualify as direct loans — unless you consolidate them under a direct consolidation loan.
And private student loans? They don’t count as direct loans either.
If you’re still not sure what counts and what doesn’t, you can use theto gain some clarity.
Ensuring you have qualifying loans is the first of several steps. The next is assessing whether your employer counts as a qualifying employer.
Generally speaking, if you work full time for aU.S. federal organization, or a state, local or tribal government or nonprofit organization, you may qualify for PSLF. This includesmilitary serviceand volunteer service withAmeriCorps or the Peace Corps.
The list of qualifying employers is relatively short. Labor unions, for example, don’t count, and neither do partisan political organizations. For-profit organizations are obviously not in the public-service sector, and this includes for-profit government contractors.
Remember, it’s not about your job title or role. It’s about who your employer is. It’s also about your schedule.Full-time workis at least 30 hours per week or your employer’s definition of full-time work. (Unfortunately, the greater of these two is what counts.) You can also cobble together part-time jobs, assuming they’re all for qualifying employers and your hours add up to 30 or more per week.
If both your loan and your employer get the green light on qualifications, it’s time to look at yourrepayment plan.To be eligible for PSLF, your payments must be:
One potential surprise: Thepayments don’t have to be consecutive. So, if you work for a qualifying employer, then a nonqualifying employer, and then a qualifying employer again, you can still qualify for PSLF.
Curious how this stacks up across the country? Thisoffers a way to visualize by state the number and percentages of public service employees who have student debt and who’ve had debt canceled under PSLF.
While it may seem like the entirety of the PSLF program consists of proverbial fine print, it’s not! There’s actually more to consider if youwork as a contractor. Specifically, the company you work for has to qualify for PSLF.
If you work for a for-profit organization that is doing contract work for a qualifying organization, in other words, that doesn’t count. The organization that employs you has to qualify.
Some PSLF concessions were made during the COVID-19 pandemic, although those are set to expire in October 2022. For more details, .
While the technicalities may feel extensive and overwhelming, the fact remains that a fair percentage of eligible public-service workers are not taking advantage of PSLF. In an effort to combat this trend, two U.S. senators have proposed new legislation known as the.
If passed, the act would:
Public service loan forgiveness, in other words, is subject to change. But change may be good news for borrowers both today and tomorrow.
۴ý offers degree programs that can help prepare students for careers in the public sector, in roles such as teachers, social workers, public health service professionals, mental health counselors and managers for nonprofit organizations. To help make college more affordable for these — and all — students, the University offers a number of ways to save time and money on an education, including:
Those looking to save time and money on their degree can visit/cost-savings/ways-to-saveto learn more. There, they can use the University's newSavings Explorer™ toolto see how much prior work, life and school experience may help them save on a degree.
Elizabeth Exline has been telling stories ever since she won a writing contest in third grade. She's covered design and architecture, travel, lifestyle content and a host of other topics for national, regional, local and brand publications. Additionally, she's worked in content development for Marriott International and manuscript development for a variety of authors.
As Director of Financial Education Initiatives and Repayment Management,Chris Conway works with departments across the University to provide resources that allow students to make more informed financial decisions. She is also an adjunct faculty member for the Everyday Finance and Economics course at the University, and she chairs the National Council of Higher Education Resources College Access and Success Committee. Conway is committed to helping college students make the right financial decisions that prevent future collection activity.
This article has been vetted by ۴ý's editorial advisory committee.
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