The U.S. Department of Education recently posted information for consumers about the Public Service Loan Forgiveness (PSLF) Program. The PSLF was created through the College Cost Reduction and Access Act of 2007 to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance due on their eligible federal student loans after they have made 120 payments on those loans under certain repayment plans while employed full time by certain public service employers.
The fact sheet and the FAQ provide important information for borrowers who plan to take advantage of the loan forgiveness program. The guidance includes information for borrowers about what loans are eligible, eligible payments, eligible employment and how to document eligibility.
The Department is currently developing a PSLF application, but until the application becomes available, borrowers should keep records that clearly identify their employer, and show that their employer meets the definition of a public service organization, their dates of employment and demonstrate that they are a full-time employee.
FFELP borrowers who consolidate their loans into the Direct Loan program and students who have borrowed through the Direct Loan program are eligible for the PSLF. Only payments made on the direct loans and made after October 1, 2007 will count toward the required 120 monthly payments. Individuals with federal student loan debt that are employed by public service organizations should evaluate the program guidelines and eligibility criteria carefully.
Public service employment includes most public school, colleges and universities, non-profit organizations that carry a 501(c)(3) designation from the IRS, as well as many private, not for profit organizations that provide public services such as emergency management, public safety, law enforcement, public health, and early childhood education.
FAQ:
http://studentaid.ed.gov/students/attachments/siteresources/PSLF_QAs_final_02%2012%2010.pdf
Fact Sheet:
http://studentaid.ed.gov/students/attachments/siteresources/LoanForgivenessv4.pdf |