Last week we discussed some options to help pay off your loans. What if those options will not help make your future finances manageable? You may want to consider qualifying for the Public Service Loan Forgiveness Program (PSLF), created by congress in 2007.
This program was put in place to help encourage individuals to enter and work full-time in public service jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance due on their federal student loans after they have made 120 payments on those loans, using certain repayment plans while employed full time by certain public service employer.
Only loans received under the William D. Ford Federal Direct Loan Program are eligible for PSLF. However, loans received under the Federal Family Education Loan (FFEL) Program, the Perkins Loan Program, or any other student loan program are not eligible for PSLF but may be consolidated into a Direct Consolidation Loan to take advantage of PSLF. Please keep in mind, you must be working at an approved public service employer while making payments on the new Direct Consolidation Loan only then will you meet the 120-month payment requirement for PSLF.
Since you must make the full 120 payments on the Direct Consolidation Loan you should consider repaying your loans on the Income-Based Repayment (IBR) Plan or the Income-Contingent Repayment (ICR) Plan, which are two repayment plans that qualify for PSLF. Although the 10-year Standard Repayment Plan does qualify, if you were to make the required 120 monthly payments under this plan, there will be no balance on your loan to be forgiven.
Please visit http://www.studentaid.ed.gov/repay-loans to get all the information you need to manage repayment of your federal student loans. You will also find what types of employment qualify for this loan and answers to many questions.
Answers from AZ