About the Public Service Loan Forgiveness Program

We are always getting questions at the SMMC about the Public Service Loan Forgiveness Program. Here's what you need to know about this "money secret" few people utilize.

In order to be eligible, candidates for the program must:

• Work full-time in a qualifying public service job for 10 years
• Make 120 full, on-time monthly payments on their Direct Loans

After 10 years of payments, your remaining loan balance is dropped.

Ensuring that your job meets the qualifications for this program is important. For a job to be eligible, it needs to be a federal, state or local government entity or an IRS designated tax-exempt non-profit organization. A private non-profit employer may also qualify, if it provides certain public services.

These include:

• emergency management
• military service
• public safety, or law enforcement services
• public health services
• public education or public library services
• school library and other school-based services
• public interest law services
• early childhood education
• public service for individuals with disabilities and the elderly

To maximize forgiveness under the PSLF Program, you should repay your loans on the Income-Based Repayment (IBR) Plan, Pay As You Earn Repayment Plan, or the Income-Contingent Repayment (ICR) Plan, which are three of the repayment plans that qualify for PSLF.

Other PSLF-qualifying repayment plans are the 10-Year Standard Repayment Plan or any other repayment plan where your monthly payment amount equals or exceeds what you would pay under a 10-Year Standard Repayment Plan. It’s a good idea to look into the different types of repayment plans so that the most cost-effective plan can be adopted – this may help you save money in the long run.

Because it will take at least 10 years for you to make the 120 qualifying payments necessary to receive PSLF, there is an Employment Certification for Public Service Loan Forgiveness form (Employee Certification form) that you submit to FedLoan Servicing and a process that you should follow so that they can assist you in tracking your periods of qualifying employment and your qualifying payments.

• Step 1 — Complete, with your employer's certification, the Employment Certification form annually or whenever you change jobs.
  
• Step 2 — Submit the completed form to FedLoan Servicing (PHEAA), the PSLF servicer, following the instructions on the form.
  
• Step 3 — FedLoan Servicing (PHEAA) will review your Employment Certification form, ensure that it is complete, and, based on the information provided by your employer, determine whether your employment is qualifying employment for the PSLF Program.

For more information:
http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service