Your Top Student Loan Questions Answered: Public Student Loan Forgiveness
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Working up to the restart of repayment on Oct. 1, I have received hundreds of inquiries concerning the Public Service Loan Forgiveness (PSLF) program asking about what it is, how to apply, and what are the program requirements. Let’s walk through some of the most common questions from borrowers to better understand the options.
Which repayment plan is best for PSLF?
All the Income-Driven Repayment (IDR) plans are qualifying plans for PSLF. Generally, these plans require monthly payments between 10-20 percent of a borrower’s discretionary income. The four IDR plans are:
- Saving on a Valuable Education (SAVE) Plan (formerly REPAYE)
- Pay As You Earn (PAYE) Repayment Plan
- Income-BasedRepayment (IBR) Plan
- Income-ContingentRepayment (ICR) Plan
The 10-year Standard Repayment Plan also qualifies for PSLF, however under that plan borrowers are scheduled to pay off their loans in 10 years and may not have a balance to forgive under PSLF.
Not all borrowers qualify for all the IDR plans. Use the Federal Student Aid Loan Simulator to estimate their payments under the different plans and determine which plan is best for your situation.
Do Parent PLUS loans qualify for PSLF?
Borrowers with Parent PLUS loans are eligible for PSLF and qualifying employment is based on the parent borrower’s employment, not the student’s employment. Parent Plus borrowers must also repay their loans under an Income-Driven Repayment plan. The Income-Contingent Repayment Plan (ICR) is the only Income-Driven Repayment plan available to Parent PLUS borrowers, and borrowers must first consolidate the loans into a Direct Consolidation Loan.
Since Parent PLUS borrowers are only eligible for the ICR plan, it is important for Parent PLUS borrowers to be aware that if they consolidate their own student loans with the Parent PLUS loans, their new Direct Consolidation Loan will only be eligible for ICR.
Do months in forbearance and deferment count towards PSLF?
Typically, months in forbearance and deferment do not count towards PSLF. However, months during the COVID-19 payment pause (March 2020-September 2023), months that qualify under the IDR Adjustment, and months where loans are being placed on administrative forbearance after the repayment restart will count toward PSLF. Most of the credit for forbearance and deferment will be applied automatically. However, it is important that borrowers continue certifying their employment and track their progress to identify periods of forbearance and deferment.
If borrowers return to school and are placed on in-school deferment, they may contact their servicer and request that the in-school deferment be removed. Borrowers must be employed full-time by a qualifying employer while attending school. A new borrower may waive the grace period and cannot begin making qualifying PSLF payments until after the loans have entered repayment at the end of the grace period. Any payments made on a loan during the grace period will not count toward PSLF unless the borrower consolidates into a new Direct Consolidation Loan and begins repayment immediately.
Do I need to work 120 consecutive months for the qualifying employer to be eligible for PSLF?
No, borrowers do not have to work 120 consecutive months to be eligible. If borrowers have a period of employment with a non-qualifying employer, they won’t lose credit for prior qualifying payments you made. However, a payment can be counted only if borrowers are employed full-time by a qualifying employer at the time the payment is made.