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Public Service Loan Forgiveness Program – What You Need To Know

TeacherPublic service workers fulfill a vital role in the communities in which they serve, yet many still have student loans that are currently in repayment. According to The Huffington Post, the Consumer Financial Protection Bureau recently revealed that up to a quarter of the United States workforce is currently not taking advantage of a program designed to provide student loan relief to public service workers. This means that members of the military, firefighters, teachers, and others who dedicate their lives to serving the public should be made aware of the opportunities that exist through the Public Service Loan Forgiveness Program (“PSLF”). Here is an overview of how the program works along with the information that every public service worker should have to determine their eligibility, track service hours and complete the application process to have their loan forgiven.

General Eligibility Requirements
The PSLF program is designed to encourage graduating students to enter into their public service positions and continue to work full-time as they serve their communities. Therefore, the eligibility requirements are established to reinforce the importance of the services provided by these workers. To be eligible to have their loans forgiven under this program, a person must be working full-time at a recognized public service organization while making 120 full payments by their scheduled due dates under a qualifying repayment plan. It is also important to note that this program is only available for those making payments on a loan received under the William D. Ford Federal Direct Loan Program. Other types of loans may be consolidated into a William D. Ford Loan; however, only the payments a person makes on the new Consolidated Direct Loan will be counted as the 120 payments required for eligibility.

Types of Employment Qualified for the Program
According to the U.S. Department of Education, a qualifying place of employment for this program can be any non-profit organization, government agency or entity that has been declared as tax-exempt by the IRS. For these types of organizations, there is no stipulation regarding what types of services must be provided for the organization to qualify. Some private not-for-profit employers that are not tax-exempt may still qualify provided that they perform specific services for the public. Examples of these would be the military, public education and health services, law enforcement agencies and services provided to those with disabilities or the elderly.

The type of job doesn’t matter when it comes to eligibility—as long as the employer is employed by a public service organization. So, everyone from managers and teachers to support staff may apply for loan forgiveness.

Determining Full-Time Employment
Under the PSLF program, applicants must be employed for as many hours as their organization considers a full-time position. However, these hours must equal 30 or more per week. For those who work in religious organizations, time spent on providing religious instruction or worship may not be counted among these hours. Educators who work under a contractual basis that includes specific months of time off may still be considered for loan forgiveness provided they work at least 30 hours a week during the contractual working period. Those who work part-time at more than one organization may also be eligible if their hours combined are equivalent to 30 or more hours a week.

How to Track Employment and Loan Payment History
Under most repayment plans, it will take at least ten years before a person has made 120 on-time full payments. For this reason, the Consumer Financial Protection Bureau recommends for public service workers to complete the Employment Certification for Public Service Loan Forgiveness form which can be used to help keep track of a person’s qualifying employment and payment history. The form consists of three sections, with the first two being filled out by the person applying for loan forgiveness and the last to be completed by the employer. Many public service organizations are familiar with this process and may already have a plan in place for initializing the process of tracking employment hours. Those who change employers at any point during their repayment period will need to resubmit the form and update their information to include the new employment history.

Completing the Application Process
After a public service worker has made their 120th payment on their student loan, they can submit their application for loan forgiveness. It is important to note, however, that the applicant must still be working full-time with the qualifying organization at the time they file the application. During the time that the application is being processed, the PSLF servicer may request additional information to document a person’s employment or loan payment history. Prompt submittal of any requested documentation will help to ensure that a decision is made in a timely manner.

Student loans have made it possible for many public service workers to provide quality services to their communities using the latest research-based techniques for helping others. Today, the U.S. Department of Education has made it possible for millions of public service workers to find relief from their student loan debts by continuing to serve full-time at qualifying organizations. By understanding how the Public Service Loan Forgiveness Program works and what constitutes qualifying employment and repayment, many public service workers can have their remaining loans forgiven so that they can continue to use the their skills to help those in the communities they serve.


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