Public Service Loan Forgiveness

The borrower consolidates any non-Direct loans if necessary, enrolls in a qualifying repayment plan, and works full-time for a qualifying employer. Employment certification forms are submitted to track progress. After 120 qualifying payments the borrower applies for forgiveness. Approved balances are forgiven tax-free under current law.

Example: a borrower works full-time for a state agency, makes income-driven payments for ten years, and submits employment certifications annually. After the 120th qualifying payment the remaining $18,000 balance is forgiven.

Income-driven repayment forgiveness occurs after 20 or 25 years regardless of employer. Teacher Loan Forgiveness and other occupation-specific programs have different eligibility and award amounts. Private loans are never eligible for PSLF.

Counting payments made under a graduated or extended plan. Assuming part-time public-service work qualifies. Waiting until the end of ten years to submit the first employment certification, which makes it harder to correct earlier gaps.