The Public Service Loan Forgiveness program was created in 2007 to offer federal student loan borrowers an incentive to choose careers in government, public service and nonprofits.
And with that choice, help in repaying their loans.
The program’s promise was that if college graduates enrolled in income-driven repayment programs, then worked in designated professions for 10 years – and made on-time loan payments during that period – they would be eligible to have the remainder of their student loan debt forgiven.
There were problems the first few years when the first wave of borrowers reached the 10-year qualifying standard in 2017 – only 2% of had their applications approved from 2017-2021 – but those problems have been ironed out and more than 1.4 million borrowers have received relief since 2022.
Here is a review of the qualifications for the program.
Which Careers Are Eligible?
To have debts forgiven through the Public Service Loan Program, you must work for 10 years in one of the following career fields:
- Public Education
- Veterinary Medicine
- Law Enforcement
Pursuing a government job is the easiest way to qualify for the Public Service Loan Forgiveness Program. Any job at the local, state or federal level qualifies you for the program. Job title doesn’t matter. Teachers, military, police officers, postal workers, accountants, planners, recreation workers, emergency personnel, office staff – any job at any level of government! – qualifies you for the program.
- Fire rescue
- Rescue Workers
- Disaster Relief
If you work at a corporation, public charity or any other organization classified by the Internal Revenue Service as a 501(c)(3) — not including labor unions, partisan political organizations or groups engaged in religious activities — you may qualify for loan forgiveness. There are 25 categories of non-profits recognized by the IRS, but only people working for those with 501 (c)(3) status are eligible for Public Service Loan Forgiveness. The 501(c)(3) agencies – commonly referred to as “charitable” organizations – do work that serves a broad public interest in areas like education, science, sports, public safety and more. Workers for AmeriCorps and the Peace Corps also qualify in this category.
It has been estimated that there are more than one million 501 (c)(3) organizations in the United States and full-time workers for all of those groups are eligible for PSLF, regardless of their job position. That means that social workers, receptionists, case managers, supervisors – anyone working full-time – is eligible.
You can have your loans forgiven by volunteering with certain organizations. You may also be able to defer payment until after you complete your service.Volunteer with one of the following organizations to reduce your debts:
Volunteer within the United States by joining AmeriCorps for 12 months. You may also choose to join a Volunteers in Service to America (VISTA) program within AmeriCorps. In addition to receiving a living stipend and other potential benefits, you’ll receive about $5,000 to use toward your student loans. This amount can change year to year depending on inflation.
Join the Peace Corps to volunteer for two or more years in any one of more than 70 developing countries. For each year of service, 15 percent of your Perkins Loans will be forgiven, for a maximum total of 70 percent.
You can have up to $17,500 of your student debt forgiven if you teach full-time for five complete and consecutive academic years in a Title 1 school that serves students from low-income families. To qualify, you also must have subsidized or unsubsidized Direct Loans or federal Stafford Loans.
If you have a Perkins Loan, you may qualify for a loan cancellation. You must teach full-time for one complete academic year or part-time at multiple schools for a full year. You may also be eligible if you teach special education, if you teach in a field with a shortage of teachers, such as math, science and foreign language; or if you are a Head Start worker.
For each of your first and second years, 15 percent of your Perkins Loans will be forgiven. For each of your third and fourth years, you’ll have 20 percent of them forgiven. After your fifth year, the remaining 30 percent of your Perkins Loans will be forgiven.
Other Ways to Qualify
If you work at a public library, school library, provide speech therapy, teach early childhood education, offer social work in a public child or family service agency, or work as full-time faculty at a tribal college or university, you also qualify for loan forgiveness.
To take advantage of this program, contact Debt.org. We’ll help consolidate your loans and apply for your student loan cancellation, total or partial forgiveness.
There are numerous debt forgiveness programs available if you practice medicine. Doctors, nurses and medical technicians each have programs available to help reduce their debts:
National Health Serve Corps will repay $40,000 or more of your qualifying student loans if you’re a doctor willing to make a two-year commitment to work at a NHSC award site or have a pending offer from one.
Nursing Education Loan Repayment Program will pay up to 85 percent of your loan over three years if you’re a nurse employed for at least 32 hours a week in an area with a medical care shortage.
If you’re a medical technician conducting clinical research, you may qualify for up to $35,000 in Perkins Loan forgiveness through the National Institutes of Health.
Other Forgiveness Opportunities
The balance of your loans can be forgiven after 10 years if you serve individuals with disabilities, the elderly, provide public health services, as well as regulated and unregulated healthcare professionals.
The shortage of qualified veterinarians, especially in remote areas of the United States, has created a fairly deep pool of loan forgiveness programs to help those pursuing it as a career. The Veterinary Medicine Loan Repayment Program will pay up to $25,000 each year toward qualified educational loans if you’re an eligible veterinarian serving or agreeing to serve three years in a veterinarian-shortage situation designated by the National Institute of Food and Agriculture.
Public Service Loan Forgiveness is available to all veterinarians who work for county, state or federal agencies. There are 13 states (Ark., Ga., Kan., Ky., La., Me., Minn., Mo., N.D., Oh., Penn., Vt., Wy.) that have their own loan forgiveness programs based almost exclusively on the participants willingness to practice in sparsely-populated areas.
The U.S. Department of Agriculture, the U.S. Department of Health and Human Services and the National Institute of Health also have loan forgiveness programs for veterinary students. Even the U.S. Army is involved, backing two loan forgiveness programs, the Army Active Duty Health Professions Loan Repayment program and Army Specialty Pay that will assist in forgiving parts or all of the loans, in return for a commitment to serve in the Army.
Some of your loans can be forgiven if you enlist in the military. Different military branches have their own Loan Repayment Programs (LRPs). You can also defer payment of student loans until you complete your military service.
Join one of these military branches to have student loans forgiven:
The Army offers you an enlistment incentive if you meet a certain set of requirements and will repay up to $65,000 of your student loans.
Similar to the Army’s LRP, you may receive up to $65,000 to use toward student loans when you enlist in the Navy.
You’ll receive money toward your student loans for each year you’re enlisted. You’ll receive either $1,500 or 33.3 percent of the remaining principal amount, whichever is greater.
If you practice law as a prosecutor, public defender or provide advocacy on behalf of low-income communities at a nonprofit organization, you may have a portion of your federal student loans forgiven. Any lawyer working full-time at any position for a city, county, state or federal government agency is eligible. Lawyers working for charitable non-profit organizations with 501 (c)(3) status qualify as do those working for community outreach programs. The key to qualifying for Public Service Loan Forgiveness as an attorney is to work full-time for a qualified organization. Many lawyers volunteer their time or do the work “pro-bono” but that does not meet the requirements for full-time employment in a qualified agency.
There are two paths to loan forgiveness for police and corrections officers: the Public Service Loan Forgiveness program and the Perkins Loan Forgiveness program. Each program has its own set of requirements. Police and corrections officers automatically qualify for the Public Service Loan Forgiveness program by virtue of being employees at city, county, state or federal agencies. The requirements beyond that are to make 120 monthly payments towards their student loan while being employed fulltime by a law enforcement agency or prison facility.
The Perkins Loan Forgiveness program offers up to 100 percent forgiveness, but is more specific about requirements. You also must work full-time at a law enforcement or corrections agency for five years. To qualify, you must be a sworn law enforcement or corrections officer or a person whose principal responsibilities are unique to the criminal justice system and essential in the performance of the agency’s primary mission. The agency must be able to document those functions.
If you had a Perkins Loan, you must apply to the school that made the loan or to the loan servicer the school has designated to receive forgiveness.
The total amount that can be forgiven depends on the type of service you performed.
Public Service Loan Forgiveness Program (PSLF)
Congress created the Public Service Loan Forgiveness Program in 2007 to encourage college graduates to take full-time public service jobs in exchange for having a portion of their student loans eliminated.
How to Qualify
To qualify you must be using loans that are part of the William D. Ford Federal Direct Loan Program. Those include Direct Subsidized and Unsubsidized Loan; Direct PLUS loans and Direct Stafford Subsidized and Unsubsidized Loans. You also qualify if you are using the Direct Consolidation Loan plan with any of the income-driven repayment plans.
You must make 120 qualified, on-time payments on your loans. Qualified means within 15 days of the due date for the amount owed. Lump sum payments count as one payment. The 120 payments do not have to be consecutive. You can start, stop and start again if you have breaks for deferment or forbearance. A payment only qualifies if it was made after Oct. 1, 2007.
You must work full-time (at least 30 hours a week) for a local, state, federal or tribal government organization or agency. You also qualify by working full-time at 501(c)(3) organizations and other nonprofits that provide public service such as health or education.
When you make the last of the 120 loan payments, you must submit an employment certification form. You also must be working for a qualified public service at the time you submit the application. If you have changed jobs during the period when you made the 120 loan payments, each of your employers must certify that your job and employer were qualified for the program.
Planning for Forgiveness
If you pursue Public Service Loan Forgiveness be aware that any debt forgiven is not considered taxable income. In other forgiveness programs, debt forgiven could count as taxable income. If you choose the 10-Year Standard Repayment Plan, there is no value pursuing the Public Service Loan Forgiveness Program because their repayment periods are identical. Research each program to make sure you are eligible.
Other Debt Relief Options
If you can’t afford your student loans and you do not qualify for a student loan forgiveness program, there are other debt relief options. Consolidate your student loans to make repayment easier by lowering monthly payments. You can also try income-based repayment plans to try and lower interest rates and monthly payments. In extremely rare instances, student loans can be erased through debt settlement or bankruptcy.
Disability Eligibility May Eliminate Loans
Students unable to work because of total and permanent disability may qualify to have the entirety of their loans forgiven.
The Department of Education defines disability as a physical or mental illness or injury that has been in continuous existence for five years, or is expected to last at least five years or may result in death.
A physician must confirm the impairment and provide the DOE with a completed discharge application, including an explanation of your condition and how it inhibits your ability to work.
If students meet the federal requirements, they may have their federal loans discharged, including Federal Family Education Loans (FFEL), Direct and Perkins loans. PLUS Loans may be discharged if a parent becomes disabled.
Private student loans do not qualify for a disability discharge.
Three-year Monitoring Period
During the three years following an approval for a student loan disability discharge, the borrower will be monitored to determine that certain criteria are continually met.
The borrower may not:
- Receive any new loans.
- Earn an income above the poverty guidelines for a family of two.
- Change their total and permanent disability status.
Obama Loan Forgiveness
The Pay as You Earn Plan, or Obama Loan Forgiveness, offers the lowest monthly payment, of the income-based plans. Your payment, under Pay as You Earn, is based on three factors: your income, your household size and the state where you live. With this repayment plan, you will not pay more than 10% of your discretionary income. Discretionary income is defined as 150% of the poverty level, which is based on family size and changes every year. The poverty level for 2017 for a single-person household is $12,060; for a family of four it is $24,600 and for a household with eight people, it is $41,320. To qualify for this plan, you must face an initial financial hardship
With this PAYE repayment plan, you can qualify for Public Service Loan Forgiveness after 10 years of on-time payments, if you worked for a qualified public service employer. If you work in a non-public service field, you can qualify for loan forgiveness after 20 years.
Another benefit to the Pay as You Earn Plan is that you may remain on the plan after your financial hardship has passed, though your monthly payment will be adjusted as your income grows.
There are two major requirements for Public Service Loan Forgiveness: Make 120 on-time, qualified payments on your student loan; and be a full-time employee of a qualified public service organization when you make those payments.
The first requirement means 120 separate monthly payments on a qualifying repayment plan. If you choose to participate in the 10-year Standard Repayment Plan, you negate the value of the Public Service Loan Forgiveness Program because you will not have a balance at the end of 120 payment periods. Also, be aware that if you use the Direct Consolidation Plan and don’t specifically opt into one of the income-driving repayment plans, you automatically will be placed in the Standard Repayment Plan and none of your payments will qualify for forgiveness.
Lump sum payments or payments made in advance qualify as one payment. For example, if your regular payment is $200 a month and you make a $1,000 payment, that only counts as one payment, not five.
There are special rules on lump sum payments for those working with AmeriCorps or Peace Corps. Payments made during grace periods, deferment or forbearance do not count. To maximize your loan forgiveness benefit, enroll in the Income-Based, Income-Contingent or Pay-As-You-Earn programs before you start repaying your loans.
Job qualifications are simple: Be a full-time employee at a city, county, state or federal agency or a non-profit organization with 501 (c)(3) status, and you qualify. The definition of “full-time” is a) meeting your employer’s definition of full time; or b) working at least 30 hours per week, whichever is greater.
The job title at any of the qualifying agencies does not matter. Some non-profit agencies that deliver certain public services such as emergency management, law enforcement, public education, library services, service for elderly or disabled or public health services, would also qualify.
Non-profit organizations that don’t qualify include labor unions, partisan politics or religious organizations whose workers are involved in religious instruction, services or proselytizing.
You can apply for loan forgiveness after making 10 years of payments. Make sure you have documentation certifying your employment at qualifying employers, during your 10 years. Use the Public Service Employment Certification Form
About The Author
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].
- NA. (2016, June 16) How to Qualify for Public Service Loan Forgiveness. Retrieved from https://blog.ed.gov/2016/06/qualify-public-service-loan-forgiveness/
- NA. ND. Federal Student Aid. Public Service Loan Forgiveness. Retrieved from https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#receiving-forgiveness
- FinAid (2012). Loan Forgiveness. Retrieved from http://www.finaid.org/loans/forgiveness.phtml
- Military.com (2012). The Armed Forces Offer Relief for Student Loan Debt. Retrieved from http://www.military.com/Resources/ResourcesContent/0,13964,44245--,00.html
- National Health Service Corps (2012). Loan Repayment. Retrieved from http://nhsc.hrsa.gov/loanrepayment/index.html#calculator
- Health Resources and Services Administration (2012). Nursing Education Loan Repayment Program. Retrieved from http://www.hrsa.gov/loanscholarships/repayment/nursing/
- Shelton, M.V. (2012). Student Loans Now Exceed $1 Trillion. Retrieved from http://www.investopedia.com/financial-edge/0412/Student-Loans-Now-Exceed-1-Trillion.aspx#axzz1wqCJRxZf
- Burnsed (2012).Know Where to Find Graduate School Loan Forgiveness. U.S. News and World Report. Retrieved from http://www.usnews.com/education/best-graduate-schools/top-graduate-schools/paying/articles/2012/03/16/know-where-to-find-graduate-school-loan-forgiveness
- Bodnar, J. (2011). Lighten the Burden of Student Loans. Kiplinger. Retrieved from http://www.kiplinger.com/columns/drt/archive/lighten-the-burden-of-student-loans.html