What is considered public service for loan forgiveness

In October, the U.S. Department of Education announced a series of changes to the Public Service Loan Forgiveness Program, which is designed to give student debt relief to borrowers who work in public service.

In the past, the PSLF has been criticized for failing to live up to its name and purpose. In 2018, it was revealed that nearly 99% of applicants were denied forgiveness. But thanks to the recent changes, and the wide array of jobs that can qualify as public service, many are optimistic that more borrowers will benefit from the PSLF in the future. 

"There are roughly 35 million PSLF-qualified jobs in the U.S. — 22 million federal, state and local government jobs and 13 million 501(c)(3) jobs," says Jason DiLorenzo, founder and CEO of PSLFJobs, an employer consultant and jobs platform. "The 'public service' sector is much larger than people think."

The Department of Education is offering a temporary waiver that borrowers can complete by October 31, 2022 if they would like to have previous payments, "regardless of loan type or repayment plan," counted towards the PSLF. This means many borrowers who work in public service have an opportunity to get closer to forgiveness.

The Department estimates approximately 570,000 borrowers will be impacted by the waiver. DiLorenzo estimates that closer to "1 million borrowers are affected by the recent overhaul; they are either eligible for forgiveness now, or they are closer to it as a result."

Which jobs qualify: 

The PSLF allows borrowers with federal direct loans who make 120 qualifying monthly payments while working full-time for a qualifying employer to have the remainder of their balance forgiven. 

According to the Department of Education's Office of Federal Student Aid website, "Borrowers must be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization. Federal service includes U.S. military service." Borrowers must work full-time for one of these organizations to even be considered for forgiveness.

Borrowers can consult the federal student aid website to confirm if their employment qualifies. "The PSLF help tool has been greatly improved recently," DiLorenzo says. "Borrowers who believe they qualify should start here to certify current or prior employment and learn if they need to consolidate any loans."

Of note, labor unions, partisan political organizations and for-profit organizations (including for-profit government contractors) are not considered qualifying employers. 

"You must be directly employed by a qualifying employer for your employment to count toward PSLF. If you're employed by an organization that is doing work under a contract with a qualifying employer, it is your employer's status — not the status of the organization that your employer has a contract with — that determines whether your employment qualifies for PSLF," reads the program's description for qualifying employers. "For example, if you're employed by a for-profit contractor that is doing work for a qualifying employer, your employment does not count toward PSLF."

Ultimately, "the best thing that you can do is assume that you have the right to loan forgiveness if you work in public service," says Mike Pierce, executive director at the Student Borrower Protection Center. "I would much rather be a teacher starting out in my career in 2021, than in 2007, when this program first became available."

"What [The Department of Education] did with PSLF is an amazing life-changing act for the people who have taught, or have nursed, or have been engaged in the public service, and took out federal student loans," says Randi Weingarten, president of the American Federation of Teachers. "We've gone from 98% of people who got rejected (even though they thought they had qualified) to now, over 30,000 people have already gotten $0 balances on their loans."

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Working in public service, such as government service (federal, U.S. Military, state, local, or tribal) or certain non-profit organizations may qualify you for PSLF. Your employment may also qualify if your employer provides certain types of qualifying public services.

Here’s what to do if you want to learn more:

Step 1: Understand your choices

UPDATE: The U.S. Department of Education announced a change to PSLF program rules for a limited time because of the COVID-19 national emergency.

Under the new rules, once you take the necessary steps (explained below), any prior federal student loan payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment.

This change will apply to student loan borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who apply to consolidate into the Direct Loan Program by Oct. 31, 2022.

For more information visit studentaid.gov/announcements-events/pslf-limited-waiver .

Get started

• Visit the Department of Education’s Aid Summary resource to determine what type of federal student loans you have at studentaid.gov/aid-summary .
• Use the PSLF Help Tool to figure out your personal next steps for pursuing forgiveness at studentaid.gov/pslf .

Step 2: Enroll and certify

Under the PSLF Limited Waiver, any prior federal student loan payment made after Oct. 1, 2007, will count toward PSLF once you take the necessary steps. Next steps depend on whether you have a Direct Loan or some other type of federal student loan.

Next steps

• If you already have Direct Loans but have not previously completed a PSLF form, use the PSLF Help Tool to fill out the form and submit by Oct. 31, 2022, to receive credit towards PSLF.
• If you have a Direct Loan and previously filled out the PSLF form for all your qualifying employment, set a reminder to submit an updated PSLF form each year to verify that you are still on track to receive PSLF.
• If you have at least one FFEL Program loan, Perkins Loan, or other federal student loans, complete a Direct Consolidation Loan application by Oct. 31, 2022. Generally, Parent PLUS loans are not eligible for the limited PSLF waiver.
• If you have multiple periods of qualifying employment, fill out a PSLF form for each qualified employer. The forms must be submitted by Oct. 31, 2022.

Note: Generally, Parent PLUS loans do not qualify for the limited waiver. Contact your servicer to learn about your options.

Step 3: Follow up with your servicer

It is your servicer’s job to give you accurate information about your loans. Once you submit the PSLF form, your servicer is on notice that you are interested in the program and must track your progress.

If your servicer does not give you accurate information about your progress toward PSLF, you can submit a complaint online or call (855) 411-2372.

Things to consider

• Once you submit the PSLF form, the company that services your loan may change. If you don’t know who services your student loans, you can find out by visiting the U.S. Department of Education’s Federal Student Aid website . Through this website you can access information about your federal student loans, including your federal student loan servicer.
• Keep proof of your payments. Every time you make a payment, you should have the option of a PDF or email confirmation. The previous month’s payment should also be reflected in your account statements. Save those!
• Check your payment tally. The PSLF Help Tool helps you stay on track to 120 qualifying payments. Each time you submit your PSLF certification form, you will receive a count of the number of qualifying payments you have made. Make sure it matches your records. You do not have to make the 120 qualifying payments consecutively.
• Lump-sum payments. You can make future payments (or prepayments) to your qualifying federal student loans, and they will all be counted toward your PSLF qualifying payment count if all other program criteria are met. Prepayments will count for up to 12 months or the next time you’re due to recertify for your income-driven repayment (IDR) plan, whichever is sooner.

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