Attorneys and others seeking to use the Public Service Loan Forgiveness (PSLF) program must comply with several requirements to have their student loans forgiven.
The Public Interest Law Section will continue to provide information and resources on PSLF in the coming months to help our members. If you missed it, the first post on PSLF was in the October Tip of the Month post by Susan Lund, addressing the Employer Certification Form.
Amanda Rabe, Marquette 2012, is lead attorney with the civil unit of Wisconsin Judicare in Wausau, and chair of the Public Interest Law Section Board of Directors.
Once a borrower has submitted the Employer Certification Form, the next question may be ‘what is a qualifying payment?’
Making 120 payments on the loan seems straightforward, but there are specific terms and conditions that must be met to make those payments qualify for the PSLF program.1
Qualifying payments must be paid:
after Oct. 1, 2007
for the monthly payment amount due
on time (within 15 days of the payment due date)
under an eligible repayment plan
while employed full-time at a qualifying employer
Making a payment for the full payment due each month allows the borrower to use one of the income-driven repayment plans, instead of paying a full payment under a nonincome-driven repayment plan.
Under some plans, a borrower may have a monthly installment of $0.00. If that is the payment amount calculated after applying for an income-driven repayment plan, and all other requirements are met, the borrower gets credit for a qualifying payment of $0.00.
The income-driven repayment plans are the eligible plans for PSLF qualifying payments. Income-driven repayment plans include:
These plans allow borrowers to pay a lower monthly amount when the loan amount is high compared to their income.
Counting Toward the 120 Payments
Payments only count toward the 120 required for forgiveness if the borrower is required to make a payment. If a borrower is in school, a grace period, deferment, forbearance, or default, payments during that period do not count toward the 120 payments.
It is important to keep in mind that the 120 payments do not have to be consecutive. This allows a borrower to move between public interest and other employment or shift in and out of qualifying, full-time employment.
The payments do, however, have to be on a monthly basis. There is no allowance for making multiple payments in a single month to reach the 120 payments in a shorter time span. This means the PSLF program will take a borrower no less than 10 years to complete – and will likely take even take longer, as the borrower must be employed at an eligible employer at the time of the forgiveness application and at the time the borrower receives the loan forgiveness.2
1 The Fedloan website is a good resource for PLSF and the requirements to meet the requirements for loan forgiveness.
2 More information on PSLF can be found in the Federal Student Aid’s Loan Forgiveness FAQ webpage.