Public Service Loan Forgiveness Program Easily Explained

Public Service Loan Forgiveness Program

Public Service Loan Forgiveness

In an effort to encourage more people to enter into lower paying public service jobs, instead of only using their education for higher paying corporate jobs, the Public Service Loan Forgiveness Program was instituted. What you must know about this program is that it isn’t available immediately upon graduation from college – when your loans become due. There are certain conditions that must be met.

First, you absolutely cannot be in default on any of your loans. Second, you must have made at least 120 payments on your loans. That means that you must have made your payments, without going into default, for the last ten years. Furthermore, you must have been employed full time in an eligible public service job for those ten years. If you meet these requirements, any Direct Stafford Loans or Direct PLUS loans can be forgiven – but only the remaining balances will be forgiven. This includes any direct consolidation loans for those loans. This program is federal student loan forgiveness.

If you consolidate FFEL loans into a direct consolidation loan, the 120 month period starts when the consolidation loan is granted. Payments made on FFEL loans before that time will not count towards the 120 month period. The repayment plan for your loans also matters when you are considered for the Public Service Loan Forgiveness Program. Only loans that have an income contingent repayment plan, a standard repayment plan, and income based repayment plans are considered.

It is also important to realize that in order to be eligible for the Public Service Loan Forgiveness Program, only payments that have been made since October 1, 2007 will count towards the 120 month period, as this program did not exist before that time. During that 120 month period, you can never be more than fifteen days late with your monthly payment.

In the case of Direct PLUS loans, these loans can only be forgiven if all of the above requirements are met, and the parent who made the loan is employed in an approved form of public service. It doesn’t matter which business sector the student is employed in.

There is a wide range of jobs that are approved for this program, including jobs in law enforcement, the military, some health fields, federal and state government jobs, non-profit organizations, public education jobs, public safety jobs, emergency management jobs, public library jobs and several other types of public service jobs.

As you can see, the requirements for student loan forgiveness are fairly strict. By the time you are eligible, you will have made ten years of loan payments and then only the remaining balance will be forgiven. If your educational loans totaled great amounts, then student loan forgiveness will be important to you. However, if they were not, you may already have the loans paid off before that ten year period is up. In the event that you have not finished paying off your student loans during that ten year period, however, and you meet all of the eligibility requirements, you definitely need to apply for the Public Service Loan Forgiveness Program to repay off the remainder of your qualified federal student loans.

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