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For the Public Service Loan Forgiveness program, borrowers must have made 120 Direct Loan payments during their first 10 years of full-time employment in public service. They also must have worked for at least 10 years to qualify.
Those who are not employed full-time in public service are given loan forgiveness after 25 years of repaying the loan through an income-contingent or income-based repayment mortgage plan.
There are several restrictions on the public service loan forgiveness program:
The term: Payments made prior to October 1, 2007, do not count toward forgiveness. Likewise, only payments made on Federal Direct Loans count, not those deferred or forbeared.
What has been forgiven? Interest and principal remaining on the loan is forgiven.
Employment: Each of the 120 monthly payments must be made by a borrower who is employed full-time as a public servant.
Eligible Loans: There is no consolidation requirement to qualify for Loan Forgiveness under the Direct Loan program, so borrowers do not have to refinance to qualify. Federal Direct Stafford Loans (subsidized and unsubsidized) are eligible, as are Federal Direct PLUS Loans. Borrowers in the FFEL program must consolidate into Direct Loans. If a Federal Direct Consolidation Loan includes Perkins Loans, the entire consolidation loan, including the Perkins Loans, may be forgiven as part of public service loan forgiveness.
Eligible Repayment Plans: There are three main repayment options for borrowers: income-based repayment, income-contingent repayment, and standard repayment. Other repayment plans (e.g., extended repayment and graduated repayment) do not count. To maximize forgiveness, borrowers should use income-based repayment plans.
Taxability: Public service loan forgiveness is exempt from taxation under section 108(f) of the Internal Revenue Code. For more information, see Taxability of Student Loan Forgiveness.
Form for Employer Certification
The US Department of Education offers an employment certification form and instructions. Use of the employment certification form is recommended, but not required. However, it is best to submit the form annually or whenever the borrower changes employers so that the qualifying service is properly documented.
After receiving the form, the US Department of Education’s servicer will notify the borrower if the employment reported on the form meets the requirements for public service loan forgiveness. Borrowers will also be able to track their progress toward the forgiveness of public service loans.
After the borrower has met the requirements for public service loan forgiveness (i.e., made 120 qualifying payments while working full-time in a qualifying public service job), the borrower must file a PSLF application to obtain the loan forgiveness. The link to this form will be added to this website when it is available.
Getting a Federal Direct Consolidation Loan
Contact the US Department of Education to obtain a federal direct consolidation loan.
To obtain an income-contingent repayment plan, you can apply for a federal direct consolidation loan if you have not yet consolidated. If you have not been able to obtain a federal direct consolidation loan, have been unable to obtain income-sensitive repayment terms that meet your needs, or have defaulted on your FFEL loans, federal direct consolidation loans are available to you.
Consolidation loan applications do not include a checkbox to request income-contingent repayment or income-based repayment, so you need to request it separately.
Further information about public service loan forgiveness can be found on the US Department of Education website.
