If you are a full-time employee in a government agency or eligible not-for-profit organization, you may be able to qualify for student loan forgiveness after making 120 qualifying payments over 10 years. This is due to the Public Service Loan Forgiveness Program, or PSLF. Loan forgiveness, however, has a number of requirements that you must meet in order to receive it. There are a few mistakes people make that prevent them for qualifying.
Mistake #1: You Did Not Enroll in An Income-Driven Repayment Plan
You only qualify for PSLF if you enroll in and pay under an income-driven repayment plan. Most people who are enrolled in these plans see a deduction in their monthly payment amount anyway.
Mistake #2: You Missed a Loan Payment
Your payment will not qualify if it is more than 15 days late. So, make sure you are staying on top of your payments while working toward loan forgiveness under PSLF.
Mistake #3: Not Recertifying Your Income-Driven Repayment Plan
Recertifying your income and household size is a major part of maintaining eligibility for income-driven payments. If you fail to recertify, your payments could increase exponentially without warning. Check the date for your recertification, and do not let it slip your mind.
Mistake #4: Not Sending an Employment Certification Form (ECF) Every Year
Submitting an ECF is a very important step in making sure you are on track for loan forgiveness. You should submit this form every year after you start your first public service job and any time you change employers. Sending your ECF at the same time you recertify your income-driven payments is also recommended. You should also triple check to make sure your ECF has no mistakes. Otherwise, it could be rejected.
Mistake #5: Not Combining Your Parent PLUS, FFEL, and Perkins loans
Only Direct loans qualify for PSLF. If you have Perkins or Parent PLUS loans, or if you borrowed before 2010, you will have to consolidate the loans to qualify.
Mistake #6: Staying on a Deferment or Forbearance
Did you know periods of deferment or forbearance do not count toward the 120 payments you need to qualify for PSLF? Getting on the right income-driven repayment plan can help you avoid this problem. You may also be able to waive deferment under the right circumstances. Contact your servicer to learn more about these waivers.
There are even more pitfalls when it comes to student loan debt forgiveness. To learn how to avoid these mistakes contact The Sader Law Firm. We can help you explore loan forgiveness and how different options can help your financial situation.