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Public Service Loan Forgiveness (PSLF) Program

On Oct. 6, 2021, the U.S. Department of Education (ED) announced a change to Public Service Loan Forgiveness (PSLF) program rules for a limited time as a result of the COVID-19 national emergency. Throughout the pandemic, ED has provided a variety of benefits to borrowers. First, make sure to check to see if you work for a qualifying employer. To search for a qualifying employer, visit StudentAid.gov/pslf. If you have FFEL, Perkins, or other federal student loans, you’ll need to consolidate your loans into a Direct Consolidation Loan to qualify for PSLF both in general and under the waiver. For more information, visit https://studentaid.gov/announcements-events/pslf-limited-waiver. You may also contact us at (800) 222-6297.

Through the College Cost Reduction and Access Act of 2007, Congress created the Public Service Loan Forgiveness (PSLF) program to encourage individuals to enter and continue in certain public service professions.

Under the PSLF program, borrowers may qualify for forgiveness of the remaining balance due on their eligible Federal Direct Loan Program (FDLP) loans after they have made 120 monthly payments on their loans under an eligible repayment plan while employed full time in an eligible public service occupation.

In August, 2020, updates were made to the program pertaining to the definition of a qualifying payment.

Eligibility Requirements

To be eligible for public service loan forgiveness, a borrower:

  • must not be in default on the loans for which forgiveness is requested.
  • must have made 120 separate, full monthly payments beginning after October 1, 2007, on the FDLP loans for which forgiveness is requested. Payments made on or before this date do not count toward meeting this requirement. Each of the 120 monthly payments must be made for the full scheduled monthly amount within 15 days of the due date.
  • must be employed full time by a public service organization:
    • While making the 120 required monthly loan payments
    • At the time the borrower applies for loan forgiveness, and
    • At the time the remaining balance on the borrower’s eligible loans is forgiven.

Note that the borrower doesn’t have to be employed for 120 consecutive months by a public service organization, and the borrower isn’t required to work for the same organization for all 120 months of qualifying service.

Frequently Asked Questions

Any non-defaulted loan made under the Federal Direct Loan Program (FDLP) is eligible for public service loan forgiveness, including Direct Subsidized and Unsubsidized, Direct PLUS, and Direct Consolidation loans.

Although public service loan forgiveness is available only for loans made under the FDLP, loans made under the Federal Family Education Loan Program (FFELP), Federal Perkins Loan Program, and certain health professions and nursing loan programs may qualify for forgiveness if they are consolidated into a Direct Consolidation loan. However, for defaulted loans, only payments made on the Direct Consolidation loan will count toward the 120 monthly payments required for forgiveness.

The 120 required payments must be made under one or more of the following FDLP repayment plans:

  • Standard Repayment Plan
  • Income-Based Repayment (IBR) Plan
  • Income-Contingent Repayment (ICR) Plan
  • Pay As You Earn (PAYE) Repayment Plan
  • Revised Pay As You Earn (REPAYE) Repayment Plan
  • Any other repayment plan if monthly payments equal at least the amount required under the 10-year standard repayment plan

Under current IRS rules, student loan amounts forgiven under the PSLF program are not considered income for tax purposes. For more information, check with the IRS or your tax advisor.

The borrower must be employed full time (in any position) by a public service organization, or must be serving in a full-time AmeriCorps or Peace Corps position. For purposes of the PSLF program, the term “public service organization” means:

  • A federal, state, local, or tribal government organization, agency, or entity (this includes most public schools, colleges, and universities)
  • A public child or family service agency
  • A nonprofit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code (this includes most nonprofit private schools, colleges, and universities)
  • A tribal college or university, or
  • A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services:
    • Emergency management
    • Military service
    • Public safety
    • Law enforcement
    • Public interest law services
    • Early childhood education (including licensed or regulated healthcare, Head Start, and state-funded pre-kindergarten)
    • Public service for individuals with disabilities and the elderly
    • Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in healthcare practitioner occupations and healthcare support occupations)
    • Public education
    • Public library services, or
    • School library or other school-based services

For further questions and answers, visit the Department of Education’s (ED) Public Service Loan Forgiveness website and ED’s own Q&As for borrowers.

In August 2020, the definition of a qualifying payment was updated to cover payments made in full and within 15 days of the payment due date, with limitations (see the example below and then visit the FSA Update article and the PSLF tool for more information).

Example: A borrower’s monthly payment amount is $100. The borrower makes a $500 on-time payment for November 2020 and is now considered pre-paid through March 2021. Previously, this payment would only count as one qualifying payment for November 2020 (the four early payments for December, January, February, and March would not be counted as qualifying because they were made more than 30 days before the due date). As a result of the policy change, the remaining four months will now be eligible to be qualifying payments (assuming all other PSLF requirements are met, e.g., borrower also has certified employment on file).

The FSA’s PSLF tool can be found here.

Application Process

Upon completion of the requirements necessary to qualify for loan forgiveness, borrowers should complete and return to ED the Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application. For more information about PSLF and how to complete this form, visit StudentAid.gov/publicservice. To apply online, visit StudentAid.gov/PSLF.

If you are interested in pursuing a public service career, or are currently serving in such a career and are seeking loan forgiveness under this program, you can contact the Trellis Contact Center Operations team at (800) 845-6267 or trellishelps@trelliscompany.org for more information.