Many people don’t realize while I’ve been a consumer debt expert since 1994 I am also an airplane pilot for the fire department. So public service issues are near to my heart.
There has been a great uproar regarding the Public Service Loan Forgiveness program offered by the Department of Education since 2007.
That program was supposed to allow for an easy path for public service employees to obtain federal student loan forgiveness. President Bush signed the program into law to encourage people to pursue public service employment.
In 2017 the first debtor became eligible for tax-free student loan forgiveness. The Department of Education resisted enforcing the program and denied nearly everyone that applied for forgiveness. Student loan servicers were giving out all sorts of incorrect advice to debtors that discouraged them from applying.
To help correct past sins the current Department of Education is quickly trying to clean things up.
There is a new temporary program that will allow anyone working full-time in a public service field to be eligible for federal student loan forgiveness. But you must initiate this. See this page for more information.
Public service employees that qualify, even if they were previously denied, are now receiving full forgiveness in waves.
There is no fee or charge for you to check your eligibility or apply for federal student loan forgiveness.
Even payments that have been suspended during the COVID-19 administrative forbearance count towards the 120-payment forgiveness requirement.
- For a limited time, you may receive credit for past periods of repayment on loans that would otherwise not qualify for PSLF.
- If you have FFEL, Perkins, or other federal student loans, you’ll need to consolidate your loans into a Direct Consolidation Loan to qualify for PSLF both in general and under the waiver. Before consolidating, make sure to check to see if you work for a qualifying employer.
- Past periods of repayment will now count regardless of whether you made a payment, made that payment on time, for the full amount due, on a qualifying repayment plan.
- Periods of deferment or forbearance, and periods of default, continue to not qualify.
This temporary program ends October 31, 2022, for you to apply for consideration.
Employment with the following types of organizations qualifies for PSLF:
- Government organizations at any level (U.S. federal, state, local, or tribal) – this includes the U.S. military
- Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
For PSLF, you’re generally considered to work full-time if you meet your employer’s definition of full-time or work at least 30 hours per week, whichever is greater.
If you are employed in more than one qualifying part-time job at the same time, you will be considered full-time if you work a combined average of at least 30 hours per week with your employers.
If you are employed by a not-for-profit organization, time spent on religious instruction, worship services, or any form of proselytizing as a part of your job responsibilities may be counted toward meeting the full-time employment requirement.
Specific information on this Department of Education limited-time program can be found here.
In all my decades of assisting people with student loan issues, I have never observed an opportunity like this.