PSLF is music to
my ears. It is my savior, my comforter, and my redeemer. I didn’t mean to be
sacrilegious there, but this program is a way to rid oneself of student loan
debt after 10 years (120 payments). I’m giving it lots of props and hopes. Still,
it is not a panacea. This program has many requirements that must be followed
exactly. Currently, it’s also an “all or nothing” deal; there is no partial
forgiveness. Forgiveness is a sweet thing, though, since it is (currently) NOT considered to be taxable income :) Note my image of a zero above...that is my goal in ten year.....owing exactly zero dollars.
PSLF
has been in the news a great deal lately. Still, some people have never heard
of it, and others confuse it with a repayment plan such as IBR, PAYE, ICR, etc.
It is confusing….very confusing. PSLF is a program rather than a plan. Here are
the basics…
*What is it?
From studentaid.ed.gov:
“The PSLF
Program is intended to encourage individuals to enter and continue to work
full-time in public service jobs. Under this program, you may qualify for forgiveness
of the remaining balance due on your William D. Ford Federal Direct Loan
Program (Direct Loan Program) loans after you have made 120 qualifying payments
on those loans while employed full-time by certain public service employers.
Since you must make 120 qualifying payments on your eligible federal student
loans after October 1, 2007 before you qualify for the loan forgiveness, the
first forgiveness will not be granted until October 2017.”
*What loans are
eligible?
-William D. Ford Federal Direct Loan
(Direct Loans). This includes Direct Subsidized and Unsubsidized Loans, Direct
Consolidation Loans, Direct PLUS loans made to graduate and professional
students.
What types of
payment plans qualify for PSLF?
*Income-Based
Repayment (IBR)
*Income-Contingent
Repayment (ICR)
*Pay-As-You-Earn
(PAYE)
*Standard
Repayment Plan
*Any other repayment plan where your
monthly payment amount equals or exceeds what you would pay under a 10-Year
Standard Repayment Plan
What type of job counts as “qualifying employment?”
*A federal,
state, local, or tribal government organization, entity, or agency
*A public
child or family service agency
*A tribal
college
*A university
*A non-profit,
tax-exempt organization with 501(c) (3) IRS designation
*A private
non-profit (not a labor union or partisan political organization) that provides
at least one of the following public services:
-Emergency
management
-Military
service
-Law
enforcement
-Public
interest law services
-Early
childhood education (licensed and regulated health care, Head Start, and
state-funded pre-kindergarten)
-Public
services for individuals with disabilities and public services for the elderly
-Public
health (nurses, nurse practitioners, nurses in a clinical setting, and
full-time professionals engaged in health care practitioner occupations and
healthcare support occupations)
-Public
education
-Public
library services
-School
library or other school-based services
The specific
job you do for one of these organizations does not matter. For example,
teachers, teacher aids, cafeteria workers, and administrators who work for a
public school could all qualify for PSLF.
In order to
have “qualifying employment” for PSLF, you must also meet the government’s
definition of “full-time.” Per studentloans.ed.gov, “for
PSLF purposes, that definition must be at least an annual average of 30 hours
per week. For purposes of the full-time requirement, your qualifying employment
at a not-for-profit organization does not include time spent participating in
religious instruction, worship services, or any form of proselytizing.
If you are a teacher, or other employee of a public service organization, under
contract for at least eight out of 12 months, you meet the full-time standard
if you work an average of at least 30 hours per week during the contractual
period and receive credit by your employer for a full year's worth of
employment.
If you are employed in more than one qualifying part-time job simultaneously,
you may meet the full-time employment requirement if you work a combined
average of at least 30 hours per week with your employers.”
This is a pretty sweet deal. I'll include more on the specifics later!
