The Public Service Student Loan Debt Forgiveness Program – Many Qualify & Are Not Aware

Do you have Federal Student Loans? You may qualify for a Forgiveness Program and not even be aware of your eligibility.

Here are some basic rules:

1. This only applies to Federal loans. If you have private loans, the creditor may have programs for forgiveness, but probably nothing like this.

2. What job qualifies for “Public Service”?

Public Service is much broader than you would think. It includes:

  • Any Government job-This includes federal, state and local government, as well as “public child or family service agency”;
  •  Any Not-for-profit, tax-exempt organization as defined in the IRS Code, Section 501(c)(3);
  • Any private, not-for-profit organization providing public services including: emergency management, public safety, law enforcement, public interest law services, early childhood education, public service for the disabled and elderly, public education, school library or “other school-based services.”

(So, if a  donation to your employer is tax deductible, and it is not a religious organization, it is probably a Not-for-profit, tax-exempt organization.)

3. You must be in full-time employment

  • Check your employer’s definition of full-time employment- you have to meet this definition;
  • Whatever the definition, you must meet an annual average of 30 hours/week-this cannot include time spent involved in religious instruction or worship;
  • Teachers/school employees-  since schools are on summer break, you can still qualify if you are under contract for at least 8 months of the year and work an average of 30 hours a week or more during the contractual period.

4. Just making your payments voluntarily IS NOT SUFFICIENT TO QUALIFY

So, give me a call or email me if you need information or assistance.

U.S. Department of Education

FedLoan Servicing

P.O. Box 69184

Harrisburg, PA 17106-9184

Or Fax to: 717-720-1628

  • You must submit your payments under a specific repayment plan known as an Income-Based Repayment Plan (IBR) or Pay As You Earn Plan (PAYE)

5. You cannot be in default on your loan to obtain the benefit of this program and you must make all 120 payments on time.

AFTER the 120 payments are made, any balance on the loan is forgiven!

6. So, who qualifies?  Nurses, Doctors, State’s Attorneys, Public Defenders, School Teachers, Police Officers, Firefighters, all hospital employees, all government employees, anyone who works for a Not-for Profit, tax exempt company, anyone working for a college, anyone working for a non-religious school, even non-sectarian private school employees.

7. Choices-

  • If you are a pharmacist, when you first complete your education, you may have a chance to work for a hospital or a private pharmacy, or chain such as Walgreens, CVS or even a Target.  When considering where to work, you have to weigh the additional salary against the possibility of reducing your monthly payments under an IBR or PAYE and wiping those loans out in 10 years.  Then you can work at the private, higher paying pharmacies after your loans are forgiven.
  • If you are a nurse working at a hospital, you may be making all of your Student Loan payments on time.  However, you balance on the loans seem to reduce very slowly.  You have to get the correct Form, submit it yearly, submit the IBR or PAYE forms annually, and only then, will you be able to eliminate the student loans after 10 years.

Sounds too easy?  Like most governmental programs, the rules are always changing and forms are confusing. You have to remember to send in the right form from the right website every year.

So, give me a call or email me if you need information or assistance.