All About Public Service Loan Forgiveness
Public Service Loan Forgiveness or simply known as PSLF Program is about forgiving the remaining balance on Direct Loans after you’ve made 120 qualifying monthly payments under the qualifying repayment plan while you’re working full time for qualifying employer.
You may be wondering what a qualifying employment is. Well, the qualifying employment for PSLF Program isn’t about specific job that you are doing for your boss. Instead, it is more on who your employer is. The employment with government organizations at any level be it tribal, local, state or federal, not-for-profit organizations that are tax exempted of the Internal Revenue Code and other kinds of not-for-profit organizations that are providing certain kinds of qualifying public services are the type of organizations qualified for PSLF Program. In PSLF Program, it is also deemed to be a qualifying employment by serving full time in Peace Corps or AmeriCorps position.
On the other hand, employers who aren’t qualified for PSLF include labor unions, for-profit organizations, partisan political organizations and non-profit organizations that aren’t tax exempted and not providing qualifying service.
But what’s considered as a full time employment for PSLF? As a matter of fact, you’ll be considered to work full time if you have met your employer’s definition of full time or, has worked at least 3 hours per week or whichever is greater. And say for example that you are working for 2 or more qualifying part time job at the same time, then you may just meet full time employment requirement if you work with combined average of at least 30 hours every week.
As for borrowers who are still employed by a not-for-profit org, time you spend on worship services, religious instruction or any kind of proselytizing may not be included in meeting full time employment requirement.
Another question that many people are wondering is what is a qualifying payment? In reality, the qualifying monthly payment is payment you are making under qualifying repayment plan, no later than 15 days after due date, for full amount due as shown on the bill and while you’re employed full time by qualifying employer. When you are required to make the payment, you can also make qualifying monthly payments during periods. With this being said, you can’t make qualifying monthly payments while your loans are in the grace period, in-school status, a forbearance, deferment or default. Also, you must know that your 120 qualifying monthly payments don’t have to be consecutive.
And if you ever make monthly payments for more than the amount that you’re required to pay, you must take into account that you can receive credit only for one payment every month.