Public Service Loan Forgiveness (PSLF) forgives remaining federal student loan balances after 120 qualifying payments while working full-time for a qualifying employer. The program rewards those who dedicate careers to public service.

PSLF Eligibility Requirements

To qualify for PSLF, you must meet ALL requirements:

1. Loan Type

  • Must have Direct Loans (Direct Subsidized, Unsubsidized, PLUS, Consolidation)
  • FFEL and Perkins loans don't qualify unless consolidated into Direct Loans
  • Private loans never qualify

2. Repayment Plan

  • Must be on an income-driven repayment plan (SAVE, PAYE, IBR, ICR)
  • Standard 10-year plan qualifies but results in no remaining balance
  • Extended and graduated plans don't qualify

3. Qualifying Employer

Full-time employment (30+ hours/week) at:

Advertisement
  • Government organizations (federal, state, local, tribal)
  • 501(c)(3) nonprofit organizations
  • Other nonprofits providing qualifying public services

4. Qualifying Payments

  • 120 separate monthly payments (not necessarily consecutive)
  • Made while working full-time for qualifying employer
  • Made under qualifying repayment plan
  • Made on time (within 15 days of due date)

Qualifying Employers Explained

Always Qualifying

  • Federal government agencies
  • State and local government
  • Military service
  • Public schools and universities
  • Public hospitals
  • 501(c)(3) nonprofits

May Qualify

  • Private nonprofits (if providing qualifying services)
  • Tribal organizations
  • AmeriCorps and Peace Corps

Never Qualifying

  • For-profit companies (even in public service)
  • Labor unions
  • Partisan political organizations
  • Private contractors to government

Income-Driven Repayment for PSLF

The SAVE plan is generally best for PSLF because:

  • Lowest payments (5-10% of discretionary income)
  • Interest subsidies prevent balance growth
  • Lower payments mean more forgiveness
  • Payments always qualify for PSLF

How to Apply for PSLF

  1. Complete Employment Certification Form (ECF) annually
  2. Get employer signature
  3. Submit to MOHELA (PSLF servicer)
  4. Receive payment count confirmation

Submit ECFs annually or when changing employers to track progress and catch issues early.

Final Forgiveness Application

  1. Reach 120 qualifying payments
  2. Submit final Employment Certification Form
  3. Apply for forgiveness through MOHELA
  4. Continue making payments until approved
  5. Receive forgiveness (typically 3-6 months processing)

PSLF Tax Treatment

Forgiveness under PSLF is NOT taxable income. This differs from other forgiveness programs where forgiven amounts may be taxed.

Common PSLF Mistakes to Avoid

  • Not consolidating FFEL/Perkins loans into Direct Loans
  • Wrong repayment plan (must be income-driven)
  • Not certifying employment annually
  • Missing payments or paying late
  • Assuming employer qualifies without verification
  • Refinancing to private loans (eliminates PSLF eligibility)

PSLF Buyback and Limited Waiver

Recent programs have expanded PSLF:

  • Past payments under wrong plans may now count
  • Periods of forbearance/deferment may count
  • FFEL payments before consolidation may count

Check your account for updated payment counts under these expansions.

Is PSLF Worth It?

PSLF makes sense when:

  • You have high loan balances relative to income
  • You're committed to public service career (10+ years)
  • Income-driven payments are significantly less than standard payments

Calculate potential savings at StudentAid.gov/PSLF