How Public Service Loan Forgiveness Works

Loan Forgiveness

The goal of this page is to give you the basic facts about how public service loan forgiveness works, what it is about, how it works, how much is forgiven, the eligibility requirements, the application process and more.

Public service loan forgiveness is not a new concept. It is the type of loan forgiveness that borrowers that work in certain public services and meet certain criteria enjoy. In this article, we will dig into what public service loan forgiveness entails, how it works, and everything you need to know about it.

Introduction to Public Service Loan Forgiveness

Public Service Loan Forgiveness is a program that forgives the remaining balance of a borrower’s federal student loans after making 120 qualifying monthly payments.

The loan forgiveness is granted after ten years of repayment, as long as the borrower has not defaulted on their loans. However, some stipulations on how much you can earn to qualify for this program.

Public Service Loan Forgiveness is offered to borrowers who work in certain jobs that provide public service and meet specific criteria. These jobs include AmeriCorps members, Peace Corps volunteers, teachers and nurses with full-time teaching or nursing positions at low-income schools or health care facilities, and employees of public agencies, including government workers such as police officers and firefighters.

How Public Service Loan Forgiveness Works

The program was established in 2007 by President George W. Bush and has been expanded under President Barack Obama’s administration.

To qualify for Public Service Loan Forgiveness (PSLF), you must meet the eligibility criteria. This takes us to the next section.

What Are the Eligibility Requirements for Public Service Loan Forgiveness?

The Public Service Loan Forgiveness (PSLF) program allows borrowers to have their federal student loans forgiven after making 120 qualifying payments. The following are the requirements for public service loan forgiveness:

1. You must be legally employed by a United States federal, state, local or tribal government or a not-for-profit organisation, including federal service like the United States military service.

However, the following types of employees are not eligible for PSLF:

  • Labour unions
  • Partisan political organisations
  • For-profit organisations, including government contractors (that work for profits)

2. You must work full time for that particular organisation or agency, which translates to 30 hours weekly.

3. You must have William D. Ford direct loans or consolidates other federal student loans into a Direct Loan scheme). Not all federal loan qualifies for PSLF. Examples of federal loans that do not qualify for PSLF are Program and the Federal Perkins Loan (Perkins Loan) Program and The Federal Family Education Loan (FFEL). They only become eligible if it is consolidated into a Direct Consolidation Loan.

4. You must repay your loans under an income-driven repayment plan. Payment in the below plan is termed not qualifying:

  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Standard Repayment Plan for Direct Consolidation Loans
  • Alternative Repayment Plan 

5. You must make 120 qualifying monthly loan payments, which translates to 10 years’ worth of qualifying payments. For the payment to be tagged qualifying, it must fulfil the following criteria.

  • The payment must start on or after Oct. 1, 2007
  • It must be under a qualifying repayment plan
  • It must be no later than 15 days after your due date

Do note that your monthly payment gets qualified only when you do it during the period required to make a payment. So payments made in the below conditions are not qualifying. They are:

  • in-school status,
  • During a deferment
  • During a forbearance, or
  • During the grace period.

Please Note: There is a provision of a limited PSLF waiver opportunity that spans from October 6th, 2021, to October 31st 2022. Due to this, you may be qualified to get credit for payments made on loans that ordinarily won’t qualify for PSLF.


Public Service Loan Forgiveness: What It Is & How It Works

What Happens If You Don’t Make your Student Loan Payment?

How Long Will Your Records Be Suspended While You Apply for Loan Forgiveness?

If you apply for loan forgiveness, your suspension period can be anywhere from six months to five years.

It may be a good idea to check with your lender before applying for forgiveness to ensure that your records will not be suspended during the process.

The Benefits of Participating in the Student Loan Amnesty Process with Public Service Loan Forgiveness

The Student Loan Amnesty process allows eligible borrowers to have their federal student loans forgiven. The loan forgiveness a borrower can receive depends on how much they originally borrowed and how long they have been in repayment.

Public Service Loan Forgiveness is a program that provides forgiveness for people who work in specific public service jobs. The program is available to people who work full-time at an eligible nonprofit or government organisation for at least ten years after October 1, 2007, and make 120 monthly payments on their loans.

One of the benefits of participating in PSLF is that it will help school graduates, especially law graduates, to escape the debt trap circle.  

80% of law students use student loans to attend law school. On average, those who attend private law school incur debt worth $122,000 and $88,000 for those who graduate from public law school. This is in addition to the average $30,000 in undergraduate debt.

The promise of PSLF makes it easy for young lawyers to choose a career as either a public defender, legal aid attorney, or prosecutor with salaries of $50,000 or less to help improve the functioning of the United States’s justice system.

How Public Service Loan Forgiveness Works

The Public Service Loan Forgiveness program is a federal program that forgives the remaining balance of Direct Loans taken out by borrowers who work in specific public service jobs.

The program was created to encourage people to take on public service jobs, like teachers, nurses, military personnel, law enforcement and more. The forgiveness amount is determined by the type of job you have.

After meeting the eligibility criteria and confirming it using the PSLF Help Tool, you can proceed to apply for forgiveness. To submit your application, go to the Public Service Loan Forgiveness Application. Note that during the application, you must still be fully employed.

You will need an employment certification form from your current employer and each employer you had while making the 10-year worth of payments (120 qualifying payments).

Also, ensure you get the digital signatures of your employer. The signature must be hand-drawn. It can be done using a mouse, a signature pad, or by scanning the picture of a drawn signature on a piece of paper. You take the signature and embed them on the signature line.

Note that typed signatures mimic a hand-drawn signature, and even security certificate-based signatures will not be accepted.

You will submit the certification together with your application and wait. FedLoan Servicing will notify you when your application gets received. You are not required to make any loan payments during your application processing.

Top 10 Ways to Get Your Student Loans Forgiven with PSLF

Debt Stats in the USA shows that after reaching an all-time high value in 2018 with a record of $1.44 trillion, student loans will rise spontaneously because more people are increasingly going to tertiary institutions.

Below are the ten ways to get your student loans forgiven with PSLF.

1.     Income-Based Repayment (IBR)

This is the most common forgiveness option most students go through when they cannot fully redeem their debt. This is the best option for those with families they are catering for and still have to make qualifying payments.

2. Faculty Loan Repayment Program

This program is specifically for qualified healthcare providers who want to teach. This program helps settle your student loan while you become an expert in your faculty. The goal of this program is to improve the quality of education for the upcoming generation.  

3. Pay As You Earn (PAYE)

Pay As You Earn (PAYE) are regular monthly payments that do not exceed more than 10% of your income. This is a good option if you have daily expenses to meet up. If you follow the process correctly, it shouldn’t span more than 20 years of payment.

4. Army College Loan Repayment Program

This an inclusive program in the Military Student Loan Forgiveness options that forgives your loan if you are a highly qualified individual enlisted in one of the critical military occupational specialities in the Army. However, it does not come that easily; it comes with a big catch.

5. Teacher Loan Forgiveness Program

You may qualify for the Teacher Loan Forgiveness Program if you are a full-time teacher in a low-income school or educational service agency.

You must teach for five consecutive academic years and have a teacher certification from your state and a bachelor’s degree before making you eligible for this program.

6. National Health Service Corps

This forgiveness program is for you if you are a qualified healthcare provider and have a student loan. This program offers loan repayment assistance that is tax-free to aid healthcare practitioners. The forgiveness period usually spans two years.

7. Employer-Based Student Loan Repayment Assistance Programs

This is an international student-based assistance program that forgives you as a form of an employee benefit. It means that when a company want to employ you, they may provide repayment assistance as part of the employment package.

8. Income Contingent Repayment (ICR)

Income Contingent Repayment helps control your monthly payments as the amount of money for your monthly loan payment is calculated based on your family, income, and the worth of the sum borrowed.

9. Sponsor Change

This program allows graduates with student loans to volunteer at non-profit organisations. Then in reward for their human resources, they will be given the amount of student loan they owe by sponsors and donors.  

10. Public Service Loan Forgiveness (PSLF)

This is for full-time public service employees who have made 120 (10 years) qualifying monthly payments. The government takes over and pays for the rest of the money.  

Does the Government Plan on Eliminating Public Service Loan Forgiveness?

This question is whether the government plans to eliminate Public Service Loan Forgiveness, a program that forgives federal student loans for those who work in public service jobs. The answer to this question is yes, and it has been in effect since 2007.

Congress created the program in 2007 with the passage of the College Cost Reduction and Access Act (CCRA). This act provided loan forgiveness for those working full-time public service jobs. These jobs include teaching, social work, or nursing.

The process of eliminating this program began when President Donald Trump signed an executive order on April 26th 2017, that would eliminate Public Service Loan Forgiveness altogether. The order stated that “the Secretary of Education may not make any Federal Direct Loans under the William D. Ford.

President Donald Trump proposed eliminating the PSLF in his 2018 budget proposal. However, the PROSPER Act is considered “dead” with Democrats retaking control of the House of Representatives in 2019

However, recent news has made the status of loan forgiveness uncertain, as there is a debate on whether loan forgiveness should be eliminated or not.

Frequently Asked Questions (FAQs)

How long before a student loan is forgiven?

If, after 20 years, you haven’t paid your undergrad student loan in full, the remaining amount will be forgiven. For the postgrad student loans, you get forgiven after 25 of not completing your debt.

What happens if I just don’t pay my student loans?

The longer you stay without completing your loan payment, the more you sink deep into the debt pit. You may be dragged to court, and legal action against you, drop your credit score, lose eligibility for future aids, including scholarships, wage garnishment or your tax refund gets withheld.

Does Loan forgiveness affect my credit score?

Loan forgiveness does not affect your credit scores like bankruptcy or debt settlement. Your credit score remains the same.


As a student, if you are having a hard time paying off your loan and you are looking for loan forgiveness, you can try out one of the ten ways listed above. Loan forgiveness saves you from drowning in the debt trap and does not affect your credit score.

You May Also Like