How To Qualify For Public Service Loan Forgiveness | Student Loan Planner

How To Qualify For Public Service Loan Forgiveness | Student Loan Planner


Here’s a guide on how to qualify for
and actually receive the Public Service Loan Forgiveness program. The PSLF
program is the largest loan forgiveness program of its kind out there,
for working in the public sector working for ten years at a qualifying not-for-profit
or government job full-time and then getting your lungs discharged tax-free at the end of it. Now, there are all kinds of qualification problems for this
program. That’s kind of outside the scope of this video. The thing that you need to
know is that you do not need to be worried about the future of this program
for people who are currently enrolled in any kind of masters or professional
school setting now, okay? For the future, I think that people that are not yet
enrolled in school need to track this program every year to see if it’s still
going to exist for when they take out loans . But for people who are currently
enrolled in school or already have student loans outstanding, this program
is a solid bet. Now, in terms of how to qualify for it, the very first step is to
make sure that you have the right kind of loans. This is the number one reason
why people are not qualifying for Public Service Loan Forgiveness right now, is
because they have loans that exist under the wrong kind of loan program. The most
common situation is somebody’s got loans from before 2010, before the government
nationalized the student loan industry and took over the role of all lending. So
if you have loans from before 2010, you know, you might have these loans called
FFEL loans, and these loans are basically bank issued loans that are
guaranteed by the government so they’re a different loan program, and payments
made on these loans do not qualify to get your loans forgiven tax-free after
paying based on your income for 10 years of payments. So that’s the first
step, is to make sure you have the right kind of loans. Now, if you do not have any
credit towards the Public Service Loan Forgiveness program yet, because you’ve
been in forbearance or deferment, or you’ve not made payments based on your
income, or you’ve just graduated, then you should consolidate your student loans.
Now the way to do that is to log into studentloans.gov and then you can
process a transfer, basically, of all of your loans that are on there
from your own loan servicers to the FedLoan servicing loan servicer that
manages the PSLF program. So step one is to make sure you have the right kind of
loans, and if you do not have any pain credit already then to transfer that
loan as a consolidation loan to FedLoan servicing. This is very straightforward.
Again, log in to studentloans.gov, click on “consolidate my loans”, and the whole
process takes about two months to transition over to FedLoan servicing.
You can even check that you’re specifically doing the consolidation for
the Public Service Loan Forgiveness program. Now, the second step is to select
the right payment program. Now, if you do not have the right income driven payment
program selected, your payments will not qualify. So for example, if you are paying
back your loans under the graduated or the extended plan, that’s not a
qualifying program. You have to pay based off of your income, which means that you
functionally need to select the Revised Pay As You Earn,
Pay As You Earn, or income-based repayment programs. Now, the vast majority
of you need to be just selecting between the Revised Pay As You Earn and the Pay
As You Earn programs. If you have Parent PLUS loans, know that you can still
consolidate Parent PLUS loans and make them eligible for PSLF, but you need to
sign up for the income contingent repayment program, which is a specific
program basically just for Parent PLUS loans only. So when doing this
consolidation, you also want to make sure that you leave out any Parent PLUS loans
if you have them, okay? Because that’ll mess up your payment options. So once
you’ve consolidated your loans, then you will have everything at FedLoan
servicing, you have it on the right payment program because your on Pay As You Earn or Revised Pay As You Earn, step three is to send in what’s called the PSLF ECF,
or the employment certification form. This is a PDF you can easily find by
google searching this, and this PSLF ECF form needs to be submitted annually when
you submit your income certification. So think about your student loans and the
Public Service Loan Forgiveness program like doing your taxes. Every year, one
time a year, you submit certification proving your income, and you submit proof
of your status in the program by submitting this PSLF ECF form, okay,
it stands for employer certification form. You do that annually to build a
paper trail, so that when you apply for PSLF at the end of the ten year period,
then you have years and years of paper trail documents that show that you were
actually in the program making progress. So that’s the key is to have this trail
of employer certification forms that you’ve
done annually, be in the right kind of income-based program, and then make sure
that your loans are direct loans. Now there’s a caveat to that consolidation
comment. If you already have existing direct loans, if all of your loans are
direct, consolidating them restarts your payment count to zero. So if you were to
consolidate your loans, your payment count would go to zero and if you have
any credit at all towards the PSLF program, note that you will lose that if
you consolidate. So, that’s just a caveat on the consolidation aspect of this. Do
not consolidate if you already have all direct loans that already qualify that
you’re already paying on. So the most important thing to realize
about PSLF is also that the ten years worth of payments are cumulative
not consecutive, which means that you can take a break off of this program and
stop paying, and then come back to it later, or you can continue payments while
you’re at a private sector job and then, you know, on the Pay As You Earn program
for example, and come back to the program and then pick up where you left off with
PSLf credit. So that’s a wonderful thing, and it’s something that should really
make you not worry too much about this program in pursuing it. It’s really a
good bet to take. Now, if you also have already made payments on your loans,
and your loans are at a different loan service or like Navient, Nelnet, or
Great Lakes, you also want to send in this employer certification form. That will
cause your loans to transfer to FedLoan servicing, and that will cause your
payment count to be calculated for the PSLF program. It’ll probably be wrong. In most cases for our clients that we do student loan consulting and planning for,
their payment accounts are wrong. So just note that you’ll have to challenge that
with a manual review with FedLoan servicing, or you can also contact your
Congressperson’s constituent services office to lodge a complaint on your
behalf. So, that’s the comprehensive guide to paying back your loans and qualifying
for the Public Service Loan Forgiveness program. All you have to do is certify
every year based on your income, have the right kind of loans with FedLoan
servicing, and then also don’t forget to send in that employer certification form
at least annually, and also as the best practice, to submit it whenever you
change jobs to make sure that new job also qualifies for Public Service Loan
Forgiveness. And obviously we would love to help you if you have any questions.
Just reach out to us. You could also check out our student loan planning service at
studentloanplanner.com/help. Leave your questions in the comments below, and we
will try to answer them and give you some information about how you could qualify
for the Public Service Loan Forgiveness program.

One thought on “How To Qualify For Public Service Loan Forgiveness | Student Loan Planner

  1. worked for govt for 5 years and is terminally sick right now ,living on ssdi and have student loan for 30k, can it be forgiven? will it affect my credit score?

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