Public Service Loan Forgiveness (PSLF)

If you aspire to work in the public service sector, you’ll find that the reward is not only emotional – but possibly monetary as well. That’s because the College Cost Reduction and Access Act of 2007 established a program that forgives some federal student loans under certain circumstances.

Program Summary

This government program provides forgiveness for the remaining balance (principal and interest) on eligible Direct Loans after the borrower makes 120 on-time, qualifying monthly payments while working in a qualifying public service position. FedLoan Servicing (PHEAA) is the PSLF Servicer.

Only qualifying payments made after October 1, 2007 count towards PSLF; therefore, the first forgiveness of loan balances will not occur until October 2017 (at the earliest).

Eligible Loans

Eligible Loans: Any non-defaulted loan made under the Direct Loan program may be eligible. These include:

  • Direct Subsidized and Unsubsidized Loans
  • Direct PLUS Loans
  • Direct Consolidation Loans

Other Federal Loans

The following federal student loans may also be eligible for PSLF if they are consolidated into the Direct Loan Program*:

  • Federal Family Education Loans (Stafford, PLUS, and Consolidation Loans)
  • Federal Perkins Loans
  • Certain Health Professions and Nursing Loans

Review FIRST's PSLF ebook.

*Only payments made on the Direct Consolidation Loan will count toward the required 120 monthly payments needed for forgiveness.

Eligibility Requirements

  1. Repayment Plans: Borrowers must not be in default on the loan(s) and must make 120 on-time, required monthly payments while in an eligible repayment plan.

Eligible repayment plans include:

  • Standard (or a plan where the payment is not less than the monthly amount required under the 10 year Standard Repayment Plan)
  • Income-Contingent Repayment (ICR)
  • Income-Based Repayment (IBR)
  • Revised Pay As You Earn (REPAYE)
  • Pay As You Earn (PAYE)

For more detailed information and answers to commonly asked questions, review this Federal Student Aid webpage.

  1. Public Service Employment: Borrowers must be employed full-time (at least 30 hours per week) in a qualifying public service position (a) during the period in which he or she made each of the 120 monthly payments, (b) at the time of application for loan forgiveness, and (c) at the time the remaining principal and interest are forgiven.

Qualifying Public Service Employment

Qualifying public service employment includes work in 501(c)(3) non-profit organizations, government organizations, and/or other not-for-profit organizations that provide certain types of qualifying public service. This type of employment could include work at qualifying medical schools and teaching hospitals, employment with AmeriCorps or Peace Corps, military service, public health, public safety, and other similar types of employment. (More details about Public Service Loan Forgiveness and Employer Certification forms can be obtained on the Federal Student Aid website.)

Questions to Consider When Evaluating Residency Programs

  • Does your potential residency location qualify as a “non-profit organization”?
  • Will it meet the criteria for this loan forgiveness program?

The best way to find out the answers to these questions is to ask during your interview. The answers you receive may help you decide where you want to do your residency.

Use the Employment Certification Form to keep track of eligible PSLF employment. This form also indicates your interest in the PSLF program.

Disclaimer: This fact sheet provides a summary of the Public Service Loan Forgiveness Program and is intended as general information only. See the  Public Service Loan Forgiveness (PSLF): Eligibility and Action Plan fact sheet for more details. The information in this document is based on federal regulations and is subject to change.

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