There are three important factors in order to be eligible for Public Service Loan Forgiveness. These factors are your loan type, the employer that you work for, and your repayment schedule.
In order for you loans to qualify for Public Service Loan Forgiveness you are required to have at least one Direct loan. A Direct loan is a loan owned by the Department of Education with out a bank as the lender. If your loans do not have the word direct in front of them or the letters “DL” in the loan code, most likely they are FFEL Loans. FFEL loans are still Federal Loans but they have a bank as the lender or had a bank as the lender in the past. In order for FFEL loans to be eligible the loans need to be consolidated.
- A FFEL Consolidation can be reconsolidated for the purpose of PSLF
- Only consolidate the FFEL loans if you have made payments on your Direct Loans
As well as eligible loans you need to have eligible employment. Eligible employment is full time employment at a government agency, a 501c3 (Not for profit organization), or public school/university for example. You are required to work at least 30 hours a week and your employer needs to consider you full time. You can work multiple part time jobs to equal a full time status as long as you are working at least 30 hours a week on average. If you have eligible loans already you can submit an Employment Certification Form to Fedloan Servicing to determine whether or not your employer qualifies.
Qualifying Repayment Schedule
As you can imagine, you loans will not be forgiven overnight. In order to qualify for actual forgiveness, you are required to make 120 on time and billed payments. Since PSLF is part of the College Cost Reduction and Access Act of 2007, you are also required to make these payments on one of the income driven repayment schedules that were created with the act and the earliest qualifying payment could of been made on October 1st, 2007. These repayment schedules are Income Based Repayment, Pay As You Earn, and Income Contingent Repayment. The only other repayment schedule that you can possibly have qualifying payments is on a 10 year Level Repayment Schedule. Any payments that you have made on your FFEL loans, on a Extended repayment Schedule, or before a consolidation will not count for forgiveness.
If you have any questions about Public Service Loan Forgiveness you can check out Studentaid.ed.gov or contact your loan servicer.
NSLDS (To see what kind of loans you have)
Application for Consolidation and an eligible repayment schedule