Public Service Loan Forgiveness Program

FREESometimes loan forgiveness is too good to be true. Public Service Loan Forgiveness (PSLF) is a program that allows borrowers to have their student loans forgiven after 10 years of public service employment. It sounds like a great program, but won’t provide much assistance to the majority of qualified borrowers.

Program Details

Congress signed Public Service Loan Forgiveness into law in 2007.  The goal was to encourage bright college graduates to accept positions in public service jobs that traditionally do not pay as well as similar positions in the private sector.  The goal of the program is good—reward those borrowers who work in valuable but lower paying jobs. But the program requirements are significant. You can have the balance of you student loans forgiven if you:
  • Work full-time for a qualifying pubic service agency.
  • Make 120 qualifying payments after October 2007.
You will need to provide certification of full-time employment at a public service organization and proof of payment of the 120 on-time qualifying monthly student loan payments.


The Public Service Loan Forgiveness program is very strict about the types of loans that qualify.  Only Direct Loans obtained under the William B. Ford Federal Direct Loan Program are eligible.  Loans must be in good standing and not in default.  Federal Family Education Loans, Perkins Loans, and certain health profession and nursing loans can be consolidated under the Direct Loan Consolidation program to qualify, but you must make 120 payments on the consolidated Direct Loan to qualify.  Previous payments on the other loans will not count. If you believe you may qualify for the Public Service Loan Forgiveness program, visit the Federal Student Aid website for detailed information on qualifying jobs and instructions for completing employment certification paperwork.  Because the program did not begin until 2007, the soonest anyone can apply for loan forgiveness is 2017.

Most Borrowers Won’t Meet the Qualifications

Here is where most borrowers will be disqualified.  Some borrowers counting on loan forgiveness will never complete ten full years of employment with a qualifying agency. There will be others who miss a payment or pay late, thereby failing to meet the qualifications.

10 Years Is A Long Time To Wait

The Public Service Loan Forgiveness program requires 10 years of service in a public agency, so you would have to wait and make payments for ten years before applying. After ten years, you should have already paid a considerable amount of your student loan balance. So the amount forgiven will be a small portion of the total debt. For public service employees who continue to make payments on their student loans, the Public Service Loan Forgiveness program is an additional employment benefit, but it shouldn’t be viewed as a means to escape the burden of student loan debt. With the limited types of qualifying loans and the mandatory 10-year service period, this program will not help everyone struggling to repay student loans.  ]]>

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