Amid the publicity surrounding student loan forgiveness, the federal government is continuing to push existing debt relief programs. One is the Public Service Loan Forgiveness (PSLF) program, which was started under the Bush administration in 2007. The program is designed to reduce student debt for graduates who go on to work in a range of government, nonprofit and healthcare jobs; see below for a list and more details. Show Announced last October, the new rules include a limited requirement-waiver that allows eligible borrowers to have payments that were previously excluded counted toward loan forgiveness. The waiver ends October 31 of 2022. To see if you qualify, go to studentaid.gov/pslf/ (opens in new tab) to use the PSLF Help Tool, which will generate the form you need. And make sure to have your old W-2 forms on hand. To see if your employers—past and present—qualify as an eligible or ineligible employer you will have to enter the employer’s tax identification number which is in box b of your W-2. For more information on the tool and how to use it, go to studentaid.gov/articles/become-a-pslf-help-tool-ninja/ (opens in new tab). And in more recent news, the Education Department may further revamp the PSLF. New proposals announced in July (opens in new tab) include applying partial, lump-sum and late payments toward loan forgiveness thresholds and extending certain deferments and forbearances to AmeriCorps workers, Peace Corps workers, National Guard servicemembers and other military members. The public can comment on the proposals for the next 30 days, with the final ruling coming in November. The rules are scheduled to go into effect no later than July 1, 2023. Subscribe to Kiplinger’s Personal FinanceBe a smarter, better informed investor. Save up to 74% Sign up for Kiplinger’s Free E-NewslettersProfit and prosper with the best of Kiplinger’s expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of Kiplinger’s expert advice - straight to your e-mail. The waiver seems to have worked as it's supposed to for at least one now-former debtor. Ricardo Maldonado of New York City tweeted (opens in new tab) how roughly $139,000 worth of his federal student loans (connected to a graduate degree) was forgiven thanks to the PSLF waiver. Maldonado applied for forgiveness back in November 2021. After applying he got letters updating him about the process and received official notice of forgiveness on May 31, 2022. Maldonado says that the PSLF form was easy to manage for himself thanks to having one employer for the past 15 years, but more importantly “[It] was useful seeing folks say that [forgiveness] was possible,” he said via a direct message on Twitter. What Went Wrong with Public Service Loan Forgiveness?People with student loans who work in qualifying non-profit or government jobs may have their loans forgiven after ten years of qualifying payments to a qualifying loan program. These payments may be adjusted in consideration of the borrowers’ income level. The first borrowers would have been eligible for forgiveness in October 2017 (remember, the program was launched in 2007). But four months before that, the Consumer Financial Protection Bureau reported problems: “Borrowers report that servicers delay or deny access to loan forgiveness through wrong information about their loans, flawed payment processing, and bungled job certifications.” One major complication involves how federal student loans originated. Prior to 2010, federally backed student loans were issued by financial institutions and not directly by the federal government. PSLF applies only to direct student loans, or those issued by the federal government. Earlier loans could be consolidated into direct loans, and payments made after that consolidation would apply toward PSLF. Who Qualifies for Public Service Loan Forgiveness?The PSLF program covers a wide range of jobs, including virtually all direct government employment (whether federal, state, local or tribal). Many jobs at nonprofits as well as public health work also qualify. Some exceptions include Labor unions or partisan political organizations. Members of Congress are also specifically excluded. The program also has provisions that work must be full time (at least 30 hours a week), though this can be through multiple jobs with qualified employers. Positions include:
More detail is available at: https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service/questions. How do you qualify for PSLF?Eligibility requirements. To qualify, you must be working full-time or a minimum of 30 hours per week for a public service loan forgiveness (PSLF) qualifying employer. Eligible loans include Federal Direct Loans and federal loans that were consolidated into a federal consolidation loan.
Which student loans will be forgiven?Nearly every type of federal student loan qualifies for forgiveness, including direct subsidized or unsubsidized loans and graduate or parent PLUS loans.
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Who qualifies for public service student loan forgiveness
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