What to know about civil service loan forgiveness
NEW YORK (AP) — More than 145,000 U.S. borrowers have had the rest of their student loan debt forgiven through the public service loan forgiveness program, and officials say many more are likely to qualify.
The program, launched in 2007 to steer more graduates into public service, cancels student debt after 10 years of community service, or 120 payments. Teachers, librarians, nurses, public interest lawyers, the military, and other public workers can all apply.
The US Department of Education has relaxed complex rules for applying for the program, but only until October 31. Here’s what you need to know if you want to apply:
If you are or have been employed at least 30 hours per week with the following types of organizations, you qualify:
— Government organizations at all levels (US federal, state, local or tribal). This includes the U.S. military, all working in public education, and full-time volunteer work with AmeriCorps and the Peace Corps.
— Any non-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code.
— If you work for a non-profit organization that is not tax-exempt, you may still qualify for the PSLF if the organization provides certain types of eligible public services such as emergency management, aid and legal services, early childhood education, services for the disabled or elderly, public health, including nurses and nurse practitioners, public library and school library services, and public safety, such as prevention crime and law enforcement.
To demonstrate that your public service work qualifies you for the pardon, you will need to submit an employer attestation form with your repairer, listing the jobs you have held.
You must have direct loans or consolidate other federal student loans on direct loan. You must also make 120 qualifying payments or 10 years of payments.
You can apply before you’ve made 120 payments, and the Education Department encourages anyone eligible for the program to apply before the waiver period ends on October 31, regardless of the number of payments made.
WHICH STUDENT LOANS ARE ELIGIBLE?
Any federal student loan received through the William D. Ford Federal Direct Loans Program is eligible.
If you have either a Federal Family Education Loan (FFEL) or a Federal Perkins Loan, you will need to consolidate these into direct loans with your service agent.
Private student loans are not eligible.
HOW CAN I APPLY?
You have to submit an application before October 31. You can still apply after that, but the waiver rules only apply until then.
HOW TO CONSOLIDATE MY DEBT IN A DIRECT LOAN?
First visit studentaid.gov to see if you have any loans under the Federal Family Education Loans Program or the Perkins Loans Program. These are the loans that you will consolidate.
Next, apply online or by mail or fax with FedLoan Service. The process is free and takes about six weeks, but you can submit the Public Service Loan Cancellation Form before or after consolidation.
WHAT COUNTS AS A QUALIFYING PAYMENT?
A qualifying monthly payment is a payment you made after October 1, 2007, while you were employed by a qualifying employer.
All months of payments suspended during the pandemic count to the total payment.
Abstention periods of 12 consecutive months or more, or 36 cumulative months or more, count towards the waiver.
Months spent in adjournment prior to 2013 count towards the waiver.
Additionally, the Department of Education will include economic hardship deferment effective January 1, 2013.
The 120 qualifying monthly payments do not need to be consecutive. For example, if you have a period of employment with an ineligible employer, you will not lose credit for prior eligible payments.
HOW DO I APPLY FOR THE LIMITED WAIVER PROGRAM?
There is no separate application process for the waiver program. Exceptions to the waiver will be active for applicants who follow the process until the end of October.
HOW MANY PEOPLE ARE CURRENTLY IN THE PROGRAM?
Since May of this year, 715,675 people had completed forms processed for the program. According to the Ministry of Education, 61.9% of borrowers work in government, while the rest work in non-profit organizations. The average amount of debt canceled under the program is $64,968.
WHO CAN I CONTACT IF I HAVE ANY QUESTIONS?
If you have a specific question regarding your application, it is best to call or email a representative.
For general questions about student loans, the The Federal Student Aid Information Center (FSAIC) hosts a contact center which allows borrowers to live chat, call or email.
For specific questions about the program, applicants can contact FedLoan Service at 1-855-265-4038.
The Center for the Protection of Student Borrowers has compiled a list of resources available in all states of the country.
WHERE CAN I FIND MORE INFORMATION?
Government agencies and private organizations are currently hosting several online and in-person events to help applicants successfully complete the program.
The Civil Service Loan Forgiveness Coalition hosts a frequently asked questions webinar about the program the first week of every month. Candidates can also access past webinars on the coalition’s website.
AccessLex Institute hosts the webinar “How to benefit from the possibility of limited exemption from the loan forgiveness of the public service” a few times a month. The 30-minute sessions guide candidates through the process and answer frequently asked questions. This event is free.
The National Education Association’s YouTube has a few PSLF webinars that cover how to apply for the program and common questions.
The Associated Press receives support from the Charles Schwab Foundation for educational and explanatory reports aimed at improving financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
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