How to know if you qualify for PSLF
A lot of people ask us, “What is PSLF? Do I qualify?” Public Service Loan Forgiveness can eliminate all remaining student loan debt for those who have made qualifying on-time payments over ten years. But it can be as tricky as it is rewarding, and it can have folks feeling stumped. Even for those who qualify, they may be unaware that the program exists or applies to them.
Anyone who is a full-time employee of federal, state, local, or tribal governments; a 501(c)(3) non-profit (such as most universities and hospitals); or certain other public service organizations qualifies. If you do, it could save you an enormous amount of money.
A recent client, Dr. Ramona, was all set to refinance over $200,000 in loans before she stumbled upon us and learned she could be eligible for PSLF. It could have been the most expensive oversight of her life, and she may have never even known!
Steps to start your PSLF journey
PSLF is a document-heavy process and you start by submitting two important forms. Employer Certification allows the Department of Education to verify that your employer qualifies you for PSLF.
If you’re on an income-driven repayment (IDR) plan, which will usually get you the most benefit from PSLF, the second form to submit is your application for an Income Driven repayment plan at studentaid.gov.
This allows your loan servicer to calculate your monthly payment amount. For more info on these forms, including what to do in future years, check out our post, Payment Plans: Whozits and Whatzits?
With those two forms in hand, you’re on your way to PSLF
At its core, PSLF should be a fairly straightforward program. Unfortunately, we hear from doctors all the time that forms are confusing, they get mixed messages from the Dept. of Ed. or their servicer, and much, much more.
It costs you nothing (but time) to find out if you qualify for PSLF, but sometimes folks need a helping hand (or wish to delegate the details to an expert). If you’re left scratching your head, persist!
The reward can be huge, just don’t be afraid to ask for a little help when you need it.