Public Service Student Loan Forgiveness – Program Eligibility & How to Qualify

My wife graduated from medical school with more than $300,000 in student loans to her name. During her three-year residency, some of that debt sat in deferment, quietly accruing about $20 per day in interest. The larger non-deferred balance grew, albeit more slowly, despite my wife’s dogged income-driven repayments on account of her modest residency salary. Shortly before she graduated from residency, her student debt load peaked somewhere in the mid-$300,000s.

Now that she’s established in her career as a primary care physician, my wife’s medical school debt — our debt, since what’s mine is technically hers and vice versa — is shrinking. But it will be years until she’s debt-free, under even the rosiest of scenarios.

That rosiest scenario is based on her successful participation in the U.S. Department of Education’s (DOE) Public Service Loan Forgiveness Program, a federal benefit that may offer accelerated forgiveness for federal Direct Loans and certain consolidated student loans held by borrowers employed by government entities and some nonprofit organizations.

Could you qualify for the Public Service Loan Forgiveness Program? Here’s a closer look at what it takes, how to determine if it’s suitable for you, and some popular alternatives.

What Is the Public Service Loan Forgiveness Program?

The Public Service Loan Forgiveness Program (PSLF) is among the most generous and widely available public student loan forgiveness programs.

PSLF was a pillar of the College Cost Reduction and Access Act (CCRAA) passed in September 2007. The CCRAA’s other major components include:

  • An increase of roughly 20% in maximum Pell Grant funding, staggered from 2008 to 2012
  • A phased, temporary reduction in subsidized federal Stafford loan rates, from 6.8% in 2007 to 3.4% in 2011 (subsidized loan rates have since risen to about 5% in 2018, per the DOE)
  • Income-based repayment (IBR), a new type of income-driven repayment plan with a maximum repayment window of 20 to 25 years, depending on the date of the first disbursement

Proponents envisioned PSLF as an enticement for graduates to pursue careers in public service. After making at least 120 qualifying payments while working full-time for an eligible employer, PSLF borrowers may qualify for forgiveness of the remaining balance of qualifying federal Direct Loans. That’s half as long as most other federal loan forgiveness options, which typically last 20 to 25 years, or 240 to 300 repayments.

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