Public Service Loan Forgiveness: Qualifying Payments
To be eligible for Public Service Loan Forgiveness, you must make 120 qualifying monthly payments on one or more Federal Direct loans while working in qualifying employment.
Make sure each of your payments qualifies.
Once you make 120 separate, monthly qualifying payments (which were made while you were in qualifying employment) on an eligible Federal Direct Loan, you may apply for forgiveness of any remaining balance on this loan.
Each payment must be made separately, on-time, for the full monthly amount due, in a qualifying repayment plan.
TIP: Consider avoiding large, lump sum payments on your eligible loans. Unless you fall within a narrow exception, a lump sum payment will only count as one qualifying payment regardless of the amount you submitted.
You must be repaying in one of the eligible repayment plans for your payments to count toward the 120 required for PSLF
In order to qualify for Public Service Loan Forgiveness (PSLF), you must not choose an extended repayment plan as many borrowers have done in the past because extended repayment plans are not eligible for PSLF.
Qualifying monthly payments include only those made on time as part of:
- Income Contingent Repayment (ICR) plan;
- Income-Based Repayment (IBR) plan;
- Standard Repayment plan based on a 10-year repayment schedule; or
- A repayment plan where the monthly amount paid was not less than the monthly amount required under Standard Repayment over a 10-year repayment period.
IBR will be the preferred repayment plan for most borrowers who will ultimately earn PSLF. IBR will minimize monthly loan payments and maximize the amount ultimately forgiven, if forgiveness is earned. You should compare your monthly payments and prospective forgiveness.
Sign up for an informational webinar to learn more about how IBR can work with PSLF.
Qualifying payments do not need to be consecutive
You must be working in qualifying public service employment for payments made on your Federal Direct loans to count toward PSLF.
However, you could take time off from your eligible employment (for example, to take a non-qualifying position or to stay home with children). While payments still must be made on your loans during this time, these would not count toward the 120 required payments. However, payments will begin to count again -- and the count will pick up where you left off -- when you are back in eligible employment.
Beware of Non-Qualifying Payments!
Only payments made after October 1, 2007 on an eligible Federal Direct loan qualify.
These payments do NOT count toward the 120-payment requirement:
- Payments made under a fixed term repayment plan with a term of more than 10 years;
- Payments made while not working in full-time qualifying public service employment;
- Payments made on non-qualifying loans (e.g., FFEL loans, commercial loans, Parent PLUS loans). Click here to learn about eligible loans.
- Payments not made within 15 days of due date; and
- Payments made while borrower is in default.
If you are choosing a repayment plan for a Federal Direct Consolidation Loan and select the "Standard Repayment" option your repayment term may differ based on how much you owe. Remember, any "Standard" plan with a term of longer than 10 years is not eligible for PSLF.
Follow us on Twitter
Follow @EJW_org on Twitter and use #studentdebthelp to learn the latest news about educational debt relief.