Why Is Eligibility for the Public Service Loan Forgiveness Program Denied?

Posted on January 16, 2017 at 12:00pm by

Two weeks ago, we wrote about how some graduates lost their eligibility for the Department of Education’s Public Service Loan Forgiveness (PSLF) program. The Education Department claimed these graduates did not work for employers that qualified for PSLF. According to the Education Department, PSLF eligibility depends on your employer, not your job. To qualify for PSLF, you must work full-time for one of the following employers:

  • Government organizations at the federal, state, local or tribal levels.
  • Not-for-profit organizations that are tax-exempt under 501(c)(3) of the IRS code.
  • Some not-for-profit organizations that provide legal, public health, education or law enforcement services. This can include public service for individuals with disabilities or the elderly.

You must have Direct Loans to qualify for PSLF. However, you can consolidate Federal Family Education Loans (FFEL) or Perkins Loans into a Direct Consolidation Loan to qualify for PSLF. In addition, you must also be under a qualified student loan repayment program, and must make 120 months of on-time payments (no more than 15 days past the due date). Qualified repayment plans include REPAYE, PAYE, IBR, ICR and the 10-year standard repayment.

The Education Department will deny PSLF forgiveness to graduates who do not meet these requirements.

How to Show Proof of PSLF Eligibility Annually

The Education Department recommends filling out the PSLF employment certification form every year. After filling out the form, make a copy for your records and send another to your loan servicer. This makes it easier for you to show that you were working in a qualified public service job when it comes time to seek loan forgiveness. Your servicer will keep records of these certification forms each year they are submitted. If for any reason your eligibility changes, you will be notified by your loan servicer.

The Kansas City bankruptcy attorneys at The Sader Law Firm can help struggling student loan borrowers find solutions for managing higher education debts.



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3 Responses to Why Is Eligibility for the Public Service Loan Forgiveness Program Denied?

  1. Debbie Baker Debbie Baker says:

    How is the average student loan borrower supposed to know to transfer their loans to FedLoan Servicing? I JUST NOW found out after paying with Sallie Mae/Navient for 13 years now. FedLoan says I have to start all over – I’m a public school teacher for crying out loud! Misleading, lied to, taken advantage of by Sallie Mae….

    • Jeremiah Webber Jeremiah Webber says:

      Hi Debbie – I am in the same boat! Been paying faithfully for YEARS and working for a 501(c)3. Even mentioned that to my loan servicer years ago and no mention that my loans needed to be reconsolidated. Honestly I think it was at the time the PSLF program first came out and certain elements were not really shared well with loan holders. Now it’s been over 10 years and I want my loans forgiven and am told I have to reconsolidate and start the 10 years again. It’s crazy though because even if I had consolidated I would have paid Exactly the same amount because it would be under income based. What’s the point. Complete sham. By the time 10 years is up I’ll be close to paying the 25 years on IBR anyway so will have paid $$$$ to the loan companies. I can understand your feelings of frustration and being misled. I am trying to find a way to fight this but getting no where. If you discover any alternatives, would be great to share experiences. Best of luck!

  2. Hi, Jeremiah. Thank you for the comment. Unfortunately, there are likely to be many stories similar to yours. If you have any questions about income-driven plans or loan consolidation, we encourage you to give us a call at (816) 561-1818.

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