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What Is Public Service Loan Forgiveness? Do I Qualify?

Growing up, it seemed like every kid wanted to be a firefighter, a schoolteacher or a police officer. But as adults, most of us gave up on those careers for higher-paying jobs.

The Public Service Loan Forgiveness (PSLF) program was created as an incentive for people to work in these service careers, which are crucial to society but generally don’t pay very much.

Basically, you’d have your federal student loans forgiven in exchange for about 10 years of service. Sounds great, right? Well, there’s a lot more to PSLF than it seems. And we’ll cover all of that, including the latest news on it, what it takes to qualify and if it’s worth applying for.

What Is Public Service Loan Forgiveness?

The Public Service Loan Forgiveness (PSLF) program began in 2007. It offered to forgive the remaining qualifying federal student loan debt of any person who’s worked full time for a qualifying employer, made 120 qualifying payments, and is on a qualifying repayment plan.

Get a new student loan rate from a Ramsey-trusted company in 10 minutes.

Did you catch all of those “qualifying” adjectives? It’s kind of a make-or-break term in PSLF, since the rules were pretty rigid (not to mention poorly communicated). We’ll dig into exactly what “qualifying” means later in this article.

Public Service Loan Forgiveness News

Ten years on, the first group of borrowers applied for PSLF in 2017—and right off there was trouble. About 99% of applicants were denied forgiveness. The reasons varied from paperwork errors to not making enough “qualifying payments.”1

It was a massive disappointment, especially since many borrowers reported being told they were on track to qualify for forgiveness.2,3 So where did things go wrong?

Well, it’s important to know that the federal government hires outside companies to manage student loan accounts. One of the largest and most well-known is Navient.

When pressed about why so many borrowers were rejected for PSLF, the U.S. Department of Education pointed at Navient for mismanaging accounts. In response, Navient pointed right back at the government, citing a need for a simpler repayment program.4 And the DOE simply turned around and blamed Congress.

Annoyed yet? Yeah, so are we. If these three were in kindergarten, they’d all be in time out right now.

In 2018, the Trump administration created an expansion to the program called the Temporary Expanded PSLF (TEPSLF) program.5 It’s a second-chance program for people whose applications were denied. Under TEPSLF, they can reapply for a shot at forgiveness.

For a while the program seemed like another fail. In an investigation by the U.S. Government Accountability Office, they found the TEPSLF’s approval rate wasn’t much higher than PSLF. And 71% of denials were due to a paperwork technicality.6 The GOA’s recommendation? Simplify the freaking program! They put some of it in action, but it’s not much better. More on that later.

In 2020, the Trump administration expanded the Coronavirus Aid, Relief, and Economic Security (CARES) Act to cover people pursuing PSLF. If someone didn’t make payments on their student loans, it wouldn’t count against their PSLF eligibility as long as they continued working for a qualified employer.7

That was good news for borrowers during the pandemic, but what about when COVID-19 ends? Will there be a real shot at loan forgiveness? Sadly, it doesn’t look too promising.

In 2021, President Joe Biden publicly announced that he wouldn’t forgive student loans using an executive order, further lowering hope of loan forgiveness for people chasing after PSLF or TEPSLF.

Public Service Loan Forgiveness Requirements

One of the greatest criticisms of PSLF is how rigid and poorly communicated its requirements are. After jumping through all its hoops, applicants seem more qualified to work for Cirque du Soleil than to get student loan forgiveness.

Remember when we mentioned “qualifying” is the keyword in PSLF? Here’s why:

First, you must work full time for a qualifying employer in one of these fields:

  • Federal, state, local or tribal government organizations
  • A 501(c)(3) nonprofit
  • A not-for-profit that’s not 501(c)(3)-designated, but meets other requirements related to public service
  • AmeriCorps (in a full-time capacity) or the Peace Corps

But there’s a caveat: Even if you work in these fields, you must make sure your employer is qualified. At least once per year, you’ve got to certify your employment using the PSLF employment certification form.

Next, you also have to make 120 qualifying payments before you apply, which equals about 10 years. Payments only count if they meet these requirements:

  • Made after Oct. 1, 2007
  • Made for the full amount due as shown on your bill
  • Made no later than 15 days after your due date
  • Made while you were employed full time by a qualifying employer

Finally, you must repay your loans while you’re under an Income-Driven Repayment (IDR) plan. This one is crucial. Ninety-five percent of loans forgiven are on an IDR plan.8

Why IDR plans? Well, these types of repayment plans usually extend the life of the loan while lowering the monthly payment. This means you’re more likely to owe money after making 120 payments, so there’s something to forgive if you qualify for PSLF or TEPSLF.

But here’s something to think about: If you paid the standard amount on your loans, after 120 payments or 10 years they’d probably be paid in full. It could be a safer route to getting rid of those student loans versus banking on successfully navigating the frustrating bureaucracy of PSLF or TEPSLF.

If making the standard payment isn’t an option for you right now, there are other types of student loan help. You may even consider refinancing your student loans.

Refinancing usually offers a lower interest rate and a lower monthly payment, so you can make your payments easier and get rid of your loans faster. No red tape required. Check out our trusted service provider for refinancing student loans.

Which Student Loans Are Eligible for PSLF?

Only federal Direct Loans qualify for PSLF or TEPSLF. This includes:

  • Federal Direct/Stafford loans (subsidized)
  • Federal Direct/Stafford loans (unsubsidized)
  • Federal Direct PLUS loans
  • Federal Direct Consolidation loans

Perkins loans, Family Education loans and all other private loans don’t qualify for PSLF or TEPSLF. However, you can consolidate your other federal loans into a Direct Loan to meet the requirement.

WARNING: Before you consolidate, you should know that consolidating your federal loans resets the clock on PSLF. None of your qualifying payments will matter anymore and you’ll have to start all over again. Weigh the pros and cons. It may not be worth it.

Do You Qualify for Public Student Loan Forgiveness?

This is where things start to get really dicey. Even if you think you hit all of the requirements, depending on how good your paperwork skills are, you still may not get approved for PSLF or TEPSLF. We’ll explain:

The DOE and the third-party vendors they hire to manage student loan accounts aren’t exactly in the record-keeping business. This means you’ve got to be your own advocate and keep detailed records of every employment certification and payment for the last 10 years. It’s a doable job, but a big job. And because they’ve got such a bad habit of leaving out crucial information, we suggest keeping records of communication with these companies too.

Here’s some advice from people who actually had their loans forgiven: keep detailed records, trust no one, and verify everything.9 (Sounds more like they’re going undercover than applying for student loan forgiveness.) But we recommend you do your due diligence too.

Temporary Expanded Public Student Loan Forgiveness Requirements

TEPSLF offers people who were denied PSLF a second shot at forgiveness. The qualifications are very similar to PSLF with a few expansions and new rules.

To qualify for forgiveness under TEPSLF, you have to meet these requirements:

  • Got denied for PSLF because some or all of your payments weren’t made under a qualifying repayment plan
  • Work full time for a qualifying employer for 10 years
  • Met the TEPSLF requirements 12 months before applying
  • The last payment you made before applying for TEPSLF was at least as much as your payment under your IDR or IBR plan
  • Made 120 qualifying payments

They also expanded the qualifying repayment plan list to include the following:

  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Consolidation Standard Repayment Plan
  • Consolidation Graduated Repayment Plan

If you think you qualify, use the new PSLF and TEPSLF form to apply.10 If you’re approved, any extra payments you made during your 12-month waiting period will be refunded to you.11

Success Rate of Public Student Loan Forgiveness:

The success rates of the PSLF and TEPSLF are embarrassing.

In 2017, after years of working and waiting, just over 1% of applicants were approved.12 You read that right . . . 1%. Fast forward to November 2020, when 296,340 applications were submitted to the DOE and only 3,776 were approved.13 That’s just 1.27% of applicants! Clearly not much has improved.

But what about the TEPSLF program? It’s intended to give people another shot at forgiveness. Surely, applicants are having more success with it . . . not really.

As of 2020, only 6.2% of TEPSLF applications were approved.14 Frankly, that’s not much better than PSLF. But what can you expect from the spawn of a bureaucratic nightmare? And since the extension is only temporary, who knows how long it’ll be around.

Should I Apply for PSLF?

If you’re willing to do the work to get approved for PSLF or TEPSLF, then go ahead and take your shot. Fill out the paperwork and keep a detailed record of everything.

But don’t let PSLF or TEPSLF be your main strategy for getting rid of your student loans. It may seem daunting, but paying off your student loans yourself is totally doable.

And if you can’t make the standard payment, you have options. For example, consider refinancing your student loans. You can get a lower monthly payment and a lower interest rate. That way you’ll pay your loans off faster and with less stress. Check out our trusted choice for student loan refinancing.

And if you’re tired of getting the runaround for student loan forgiveness, check out the step-by-step plan to pay off your student loans fast, Anthony ONeal’s Quick Read Destroy Your Student Loan Debt.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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