Public Service Student Loan Forgiveness Reaching Discharge Eligibility

Student loan borrowers who want to receive loan forgiveness through public service, cross the ten-year mark in October 2017, providing the first round of qualified borrowers to receive the benefit. The Department of Education (DOE) will make the application for loan discharge available in September of 2017. However, there are several steps you must take before applying which include the following:

  1. Verify your loan qualifies. Only direct loans qualify for loan dismissal through the public service program. FFEL and other federal loans do not qualify for the program, but many of these loans qualify for a Direct Consolidation, which would convert them into a qualifying loan.  However, payments made prior to the consolation do not count towards the required 120 payments.
  2. Verify your employer qualifies. Working for a government agency or a qualifying non-profit typically meets the requirements. To confirm your employer meets the qualifications required you may submit an Employment Certification Form each year of employment. Before applying for discharge, you must submit enough employment certifications to prove you have made the required 120 qualified payments.  
  3. Verify you made 120 qualified payments. Payments made under an income driven repayment plan qualify provided they are made for the full amount and within 15 days of the due date. You may only make one payment per month and payments made in advance may not qualify because you will not have an amount due that month. The DOE only counts required payments. For example, payments made while in school, or during the grace period completing school do not count towards loan forgiveness.

Discharging all remaining balances after ten years of income based payments is a significant incentive for graduates to work in public service. However, getting the discharge will requiring proving you qualify.