Public Service Loan Forgiveness: Your Complete Guide

Student loan debt is a major pain point for Americans, both personally and collectively. The cumulative outstanding balance of educational debt sat at $1.6 trillion as late 2023, according to the Federal Reserve Bank of New York. And only about a quarter of student loan borrowers owed less than $10,000, according to Federal Reserve 2022 data.

For many, student loan forgiveness would free up money that could be put toward other goals like retirement or buying a home. For those who work for the government or an eligible not-for-profit organization, Public Student Loan Forgiveness (PSLF) can make that opportunity a reality.

What is Public Service Loan Forgiveness (PSLF)?

The Public Service Loan Forgiveness (PSLF) program gives qualified public workers—that is, those who work for government agencies and most nonprofit organizations—the chance to have their Direct federal student loans forgiven in exchange for their service to society. It was established under the 2007 College Cost Reduction and Access Act, and has been updated several times since its inception to make loan forgiveness easier to access and apply for.

However, there are caveats to PSLF. To be eligible, you must have a demonstrated track record of paying your student loans, and you must maintain full-time employment with a qualifying employer. Let’s take a closer look at the specifics.

Do I qualify for PSLF (Public Service Loan Forgiveness)?

The federal government lists the following qualification standards for PSLF. More about the application process—and the online tools that have been developed to make it easier—below.

You must:

• Be employed by a government agency (federal, state, local, or tribal, including military service) or a qualifying not-for-profit organization.
• Work full time for that employer.
• Have a Direct federal student loan (such as a Direct Subsidized Loan, Direct Unsubsidized Loan, Direct PLUS Loan or a Direct Consolidation Loan).
• Repay those loans under either an income-driven repayment plan or the standard 10-year repayment plan.
• Have made 120 qualifying monthly payments (i.e., 10 years’ worth).

Some of these qualifying factors have their own specificities and caveats to be aware of. For starters, you can search the government database to determine whether your employer is eligible. Good news for full-time volunteers for AmeriCorps or the Peace Corps: Even though they’re unpaid, these positions count!

The “full-time employee” clause does exclude most independent contractors, even if they’re contracting for the government or a qualifying nonprofit agency. That said, there are exceptions for those in states with laws that prevent qualifying organizations—usually in healthcare—from directly hiring public service employees. If that’s your situation, you’ll need to report the EIN of the qualifying employer in your application, rather than your direct employer.

Finally, “qualifying payments” are those made while a) under one of the above-named repayment plans, b) in the full amount shown on your bill, and c) while you are either employed full-time by a qualifying organization or agency—or in a period of qualifying deferment or forbearance. (Such periods include cancer-treatment deferment, economic-hardship deferment, military-service deferment and more.)

Fortunately, those 120 qualifying monthly payments do not have to be consecutive, so if, for example, you work for a non-qualifying organization (like a for-profit company) for a while, you won’t lose past progress.

Keep in mind, too, that all the months that elapsed during the pandemic-era student loan pause from March 2020 to September 2023—formally known as the COVID-19 Emergency Relief and Federal Student Aid—count toward your 120 qualifying payments if you remained in a qualified job. That’s true even if you weren’t making payments.

How to get Public Service Loan Forgiveness

This program can be challenging, but there are tools to help make the process easier.

For example, the Employment Certification Form (ECF), helps borrowers determine the eligibility of their employer. (Also, when submitted annually, it can keep track of their progress toward 120 qualifying payments.)

There’s also an online Help Tool that performs a similar function. While there’s a learning curve, this tool can be used to complete your application in full, automatically requesting the necessary signature from your work supervisor when you enter their email address. The form is automatically submitted to the correct authorities each year. Once you’ve racked up enough qualifying payments, your application will automatically be considered complete. (For a quick help guide, see “PSLF Help Tool Ninja.”)

What to do for rejected PSLF applications

So what happens if your employer shows up as “ineligible” in the Federal Student Aid office’s list? Or if your math doesn’t match the official count of qualifying payments you’ve made so far?

You submit a reconsideration request—which, according to the Student Aid officials, only takes about five minutes. You’ll need documentation to prove whatever you’re contesting in your reconsideration request. For example, if you believe your employer should qualify but have been told it is ineligible, you’ll need to provide proof of its nonprofit status.

An important note: You must contest the number of qualifying payments within 90 days of receiving the letter in which the erroneous payment count was listed.

Requests to reconsider an employer’s supposed ineligibility can be submitted at any time. However, a delay will only increase the amount of time it takes to get your student loan forgiveness—so it pays, literally, to be prompt.

TIME Stamp: Make sure to meet loan forgiveness qualifications

Some 615,000 borrowers have seen $42 billion in student loans forgiven through PSLF as of May 2023, according to the U.S. Department of Education, and that figure continues to grow.

But it can be challenging to make sure you’re not just meeting the qualifications—but tracking them to get forgiveness as quickly as possible. Fortunately, online systems make the whole process easier.

Frequently asked questions (FAQs)

Who now qualifies for public service loan forgiveness?

PSLF is available to Direct student loan borrowers who’ve worked and made qualifying payments for 10 years or more in eligible public service roles, including both government employment (state, federal, tribal, or local) and nonprofit organizations. Other qualifying factors include repaying on an income-driven or standard 10-year student loan repayment plan, and maintaining full-time employment with the eligible agency.

Which loans are covered by public service loan forgiveness?

Direct federal student loans are the only type that are eligible for PSLF. These include: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. If you have other types of loans in addition, only the federal loan money is eligible. Segregate out your federal loans and consider consolidating your federal debt under a Direct Consolidation Loan. (Private loans can be consolidated with a private lender—you may get a better rate than you are currently paying—but they are not eligible for public service loan forgiveness.)

How many years of public service do you need for loan forgiveness?

To qualify for the Public Service Loan Forgiveness program (PSLF), you’ll need to work in public service for at least 10 years—and make at least 10 years’ worth of qualifying payments against your student loans. These payments do not need to be consecutive.

Is public service loan forgiveness worth it?

Since public service positions tend not to be the best-paid roles in the world, those who choose these careers may pay an opportunity cost in the form of missed income. In other words, student loan forgiveness might be less necessary for those who choose higher-paying careers. But for those who’ve already chosen a life of service and would otherwise be paying off their student loans for many more years, the PSLF program can be a major boon. Of course, since making 10 years’ worth of qualifying payments is part of the eligibility requirements, it’s not a way to instantly erase all of your student debt. Still, any amount of student loan forgiveness helps.