Although last week’s blog data is shocking, at least 25% of the applicants who were denied the Public Service Loan Forgiveness may have had a better chance if they understood the requirements better. The vague description of the program—borrowers can have their debt forgiven after working in public service for 10 straight years and making on time payments during that time—is only part of the very strict requirement picture.

  1. You must be employed full-time (30 hours or more per week) at an “eligible” public service employer.

This includes:

    • Federal, state, local, or tribal government organizations
    • A 501(c)(3) nonprofit
    • A not-for-profit that’s not 501(c)3 designated but meets other requirements related to public service
    • AmeriCorps, in a full-time capacity, or the Peace Corps

But excludes:

  • If your position was one of a religious nature at one of the above qualifying employers, then your service does not qualify you for this loan program. For example, if you were a chaplain at a correctional facility, you would not qualify under the Public Service Loan Forgiveness Program.

It is important to note that:

  • If you change employers, your new employer must also qualify as a public service employer to keep your eligibility in the program. Any break in employment away from the public service industry will void any prior payments and time, starting you over with each new qualifying employer.
  1. You must make 120 “qualified” payments, which works out to one payment per month for 10 years.
    • Your payments must be made while enrolled in an income-drive repayment plan.
    • The loans you are paying on must be Direct loans.
      • You may consolidate or refinance non-qualifying federal loans (like a Perkins Loan or FFEL loan) into a Direct loan.
      • Only payments made after your loan is converted into a Direct loan will count towards your 120-payment requirement.
    • Additional payments do not count towards the total 120-payment requirement. Only one payment per month (of at least the minimum payment requirement) qualifies.
    • Payments made towards private loans do not qualify.
  2. You must fill out and complete the Employment Certification Form and submit it to the U.S. Department of Education. This form must be completed and filed when:
    • You start your job with a qualifying public service employer or
    • If you change employers.
    • We highly recommend completing and filing the form annually to ensure your employment is properly tracked and your application isn’t unnecessarily held up or denied. Nearly 12,000 applicants last year were denied because they submitted an incomplete Employer Certification Form for the most recent quarter.

Understanding the Public Service Loan Forgiveness Program is vital to having an adequate chance of having your application approved. Too many have not fully understood the requirements with hopes of forgiven loans only to find that they do not qualify. Even worse for those who believed they were qualified but were not on the right student loan repayment plan. Something as simple as this is grounds for denial. Contact The Student Loan Advisory Group to discuss the Public Service Loan Forgiveness Program and its requirements in full and to ensure you are on the right track for qualifying.

We can assist clients in consolidating or refinancing their loans into a Direct loan, applying for an income-based repayment plan, and help them to apply for student loan forgiveness. Even if you don’t qualify, we can assist you in finding some relief or option for managing your student loan repayments.