College Planning

Paying for College with The Public Service Loan Forgiveness Program

Before you dive into mounds of student loan debt, be sure to explore all possible options to aid in paying for your college education. Research the topic thoroughly to find more responsible ways to borrow.

Utilizing The Public Service Loan Forgiveness Program to Help Pay for College

Student Loan Options

Student loans are a common way to pay for college expenses and provide educational opportunities for many fulfilling their dream of obtaining a college degree. However, if you are not careful about how you borrow money to pay for college, you may find yourself holding a new diploma while sitting on a mountain of debt. In fact, a 2015 survey conducted for the American Institute of CPAs (AICPA) by Harris Poll in support of National Financial Capability Month, found that 68 percent of Americans with student loans or whose children have loans, have some regret with the way that they financed education.1

Student loans can be a good option for paying for college, as long as you're a responsible borrower. And, if you do your homework, you can find that certain loans* may be eligible for future loan relief with the Public Service Loan Forgiveness (PSLF) Program.

What is the PSLF Program?

The PSLF Program was created by the U.S. government as a way to encourage Americans to work in the public sector. If you are employed by a government or not-for-profit organization, you may be able to receive student loan forgiveness under the PSLF Program. That's right. Under this program, the remaining balance of certain student loans may be forgiven (meaning that you will no longer owe money on your loans) after a certain period of qualified payments.

Who can qualify?

In order to receive public service loan forgiveness, you must be employed full-time in a public service job and have made 120 qualifying payments while employed by a qualifying employer. Qualifying employment includes government organizations (federal, state, local, or tribal), not-for-profit organizations under Section 501(c)(3) of the IRS Code, service in a full-time AmeriCorps or Peace Corps, and other types of not-for-profit organization that provide certain types of qualifying public services.2

Types of Eligible Loans

*Loans that are eligible for the PSLF Program include:

  • Federal Direct Stafford Loans (Subsidized and Unsubsidized)

  • Federal Direct PLUS Loans

  • Federal Direct Consolidation Loans

  • Federal Direct Unsubsidized Stafford or Ford Loans (Direct Unsubsidized Loans)

Other loans, such as Federal Family Education Loan (FFEL) Program loans, Federal Perkins Loans, and certain health professions or nursing loans may qualify, but only if you consolidate them into a Direct Consolidation Loan.

How to Apply

If you meet the above requirements, you can submit an Employment Certification for Public Service Loan Forgiveness form, and the U.S. Department of Education will notify you of the amount of remaining qualifying payments you need to make. Once you have made 120 qualified monthly payments, you must submit a PSLF application to receive forgiveness. The U.S. Department of Education website provides additional information about public service loan forgiveness.

If you've been thinking about working in the public sector, you may want to consider applying for the PSLF Program to help pay for college. To read more about budgeting for college expenses, visit the Protective Learning Center.

1http://www.aicpa.org/press/pressreleases/2015/pages/aicpa-survey-68-percent-of-americans-regret-.aspx. The 2015 poll was conducted by telephone within the United States between March 19 and 22, 2015, among 1,010 adults (506 men and 504 women age 18 and over), including 510 interviews from the landline sample and 500 interviews from the cell phone sample.

2https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#qualifying-employment

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Public Service Loan Forgiveness Program

Getting funds to help pay for college can be challenging. While student loans can be beneficial, you may have other options. This article looks at the basics of the Public Service Loan Forgiveness Program. For more information, visit the Protective Life Learning Center.


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