The Public Service Loan Forgiveness program created by the College Cost Reduction and Access Act encourages individuals to enter and continue full-time public service employment by offering loan forgiveness for those borrowers that meet the requirements. To qualify, a borrower must make 120 qualifying monthly loan payments (once a month for 10 years) on eligible loans while working in qualifying public service employment.
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What is qualifying employment? Qualifying public service employment is full-time paid work in the government; a 501(c)(3) nonprofit; an AmeriCorps or Peace Corps position; or for a private "public service organization."
Which student loans are eligible? Only Federal Direct loans are eligible for Public Service Loan Forgiveness. All current students borrow federal student loans through Federal Direct. In the past, students also borrowed federal student loans from private banks and lending institutions through the Federal Family Education Loan (FFEL) program. Borrowers with FFEL loans must consolidate, or reconsolidate, into Federal Direct in order to be eligible for Public Service Loan Forgiveness. Find out what kind of student loans you have using the National Student Loan Data System at www.nslds.gov.
Some students also borrow commercial loans from state or private lenders. Commercial loans are never eligible for Public Service Loan Forgiveness.
Which payments count toward Public Service Loan Forgiveness? Most borrowers seeking Public Service Loan Forgiveness will choose Income-Based Repayment (IBR), and payments made under IBR will count toward the 120 payments required for forgiveness.
Where can I get more information? Public Service Loan Forgiveness is not automatic, and borrowers must take specific actions in order to benefit. Equal Justice Works provides free online resources to help you figure it all out, including webinars, podcasts, a downloadable checklist, and an interactive forum.
