Public Service Loan Forgiveness (PSLF)

Federal Student Loan Forgiveness Programs for Public-Sector Employees

Public Service Loan Forgiveness (PSLF) Program

The PSLF Program forgives the remaining balance on Direct Loans after making 120 qualifying monthly payments (10 years’ worth) under a qualifying repayment plan, while working full-time for a qualifying employer.

How to qualify for PSLF:

  • be employed by a U.S. federal, state, local, or tribal government or qualifying not-for-profit organization (federal service includes U.S. military service);

  • work full-time for that agency or organization;

  • have Direct Loans (or consolidate other federal student loans into a Direct Loan);

  • repay your loans under an income-driven repayment plan or a 10-year Standard Repayment Plan; and

  • make a total of 120 qualifying monthly payments (needn’t be consecutive)


What is the Public Service Loan Forgiveness (PSLF) Program

The PSLF Program was established to encourage individuals to work in public service by forgiving the remaining balance of their Direct Loans after they have made 120 qualifying payments while employed by a qualifying employer.


What are the eligibility requirements for loan forgiveness under the PSLF Program?

You must be employed full-time by a qualifying employer when you make each of the required 120 qualifying payments on your Direct Loans, and also at the time you apply for loan forgiveness after making the last of those 120 payments, and when you receive loan forgiveness.


Are loan amounts forgiven under PSLF considered taxable by the IRS?

No. According to the Internal Revenue Service (IRS), student loan amounts forgiven under PSLF are not considered income for tax purposes. For more information, check with the IRS or a tax advisor.


Does my income level determine eligibility for PSLF?

There is no income requirement to qualify for PSLF; however, since the required monthly payment amount under most qualifying PSLF repayment plans is based on your income, your income level over the course of your public service employment may be a factor in determining whether you have a remaining loan balance to be forgiven after making 120 qualifying payments.


Can I be certain that the PSLF Program will exist by the time I have made my 120 qualifying payments?

We cannot make any guarantees about the future availability of PSLF. The PSLF Program was created by Congress, and Congress could change or end the PSLF Program.


I have federal student loans from a program other than the Direct Loan Program. Can I qualify for PSLF?

PSLF is available only for Direct Loans; however, if you have loans under another federal student loan program, you may consolidate those loans into a Direct Consolidation Loan, which is eligible for PSLF.


What is considered qualifying employment?

Qualifying employment for PSLF isn’t about what you do for work—it’s about whom you work for:

  • U.S.-based government organizations at any level (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
  • Other not-for-profit organizations that devote a majority of their full-time equivalent employees to providing certain qualifying public services

Serving as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment for the PSLF Program.


What is considered full-time employment?

For PSLF, full-time employment is working for a qualifying employer(s) for a weekly average, alone or when combined, equal to at least 30 hours:

  • during the period being certified;
  • throughout a contractual or employment period of at least 8 months in a year, such as elementary and secondary school teachers, in which case the borrower is deemed to have worked full time for the entire year; or
  • determined by multiplying each credit or contact hour taught per week by at least 3.35 in non-tenure track employment at an institution of higher education.

What repayment plans qualify?

Qualifying repayment plans include all income-driven repayment (IDR) plans and the 10-year Standard Repayment Plan.:

  • Saving on a Valuable Education (SAVE) Plan—formerly the REPAYE Plan
  • Pay As You Earn (PAYE) Repayment Plan

  • Income-Based Repayment (IBR) Plan

  • Income-Contingent Repayment (ICR) Plan

While payments made under the 10-year Standard Repayment Plan are qualifying payments, you might have to change to an IDR plan to benefit from PSLF. Under the 10-year Standard Repayment Plan, generally your loans will be paid in full once you have made 120 qualifying PSLF payments so there would be no balance left to forgive unless periods of qualifying deferments or forbearances are included in your 120 qualifying payments.

Student Loan Forgiveness Programs for Public-Sector Employees