The PSLF program provides tax-free loan forgiveness for a borrower’s remaining Direct Loan balance after the borrower makes 120 qualifying monthly payments while repaying their loans under a qualifying repayment plan, and while working full-time for a qualifying, eligible employer.
- Work full-time for a qualifying employer.
- Have eligible Direct Loans (or consolidate non-eligible loans into a Direct Consolidation Loan to make them eligible).
- Repay loans under a qualifying income-driven repayment plan or the Standard plan. Borrowers would not want to be in Standard the entire time because there would be nothing left to be forgiven at the end of the 10-year term.
- Make a total of 120 qualifying monthly payments. Payments do not need to be consecutive.
Recent Improves to PSLF
Improvements were recently made to the PSLF program. Some of the improvements include qualifying payment credits for consolidated loans, changes to the definition of full-time employment, some deferments and or forbearances allowing qualifying payments, and the ability to make lump sum (or prepayments) up to 12 months till the next recertification of income.
Residency Programs and PSLF Eligibility
The best way to find out if a residency program will qualify for PSLF is to ask during the interview. The answer may help the soon-to-be resident determine if they want to pursue a residency position with that program, especially if PSLF is a priority. The PSLF employer search tool through the Federal Student Aid website is a tool that can help with determining if a potential employer may qualify as an eligible employer.
Completing and Submitting the PSLF Form
Once a medical graduate begins residency, they can complete, sign, and submit the PSLF form digitally using the PSLF Help Tool, or manually by downloading the PDF of the PSLF form. Borrowers should complete this form annually and when, or if, they change employers. Completing the form indicates interest in PSLF, and it helps the servicer verify employment eligibility, and track PSLF payment counts.
Borrowers who are interested in PSLF should also keep records of their payments. They should verify that their payment counts match the payment counts reported by the PSLF servicer. If there are ever any discrepancies, the borrower should contact the PSLF servicer immediately.
Borrowers will want to continue to work for their qualifying employer and make payments until they receive official notification that their remaining loan balance will be forgiven, and their final form is approved. If a borrower makes payments after the 120th qualifying payment, the overpayment will be refunded to the borrower.