Pursuing the field of public service is not only rewarding because of the nature of the work itself, it can also be very beneficial to students that want to avoid falling prey to owing a large amount of student debt, not just after graduation but over the course of their future. While there are loan forgiveness programs that do exist, perhaps the most impressive is the Public Service Loan Forgiveness Program.
Unlike the other programs, such as the Income Based Repayment Plan, this particular program is only applicable to those that actively participate in the public service field.
What Does the Public Service Loan Forgiveness Program Do?
Individuals that meet the eligibility requirements set by the Public Service Loan Forgiveness Program will have the remainder of their debt, including the interest as well as the principal balance, completely forgiven.
Translation: they’ll no longer owe any future payments on that particular debt.
What is the Criteria?
As the name of the program implies, individuals must be in the field of public service to qualify for student loan forgiveness. Examples include joining Americorps, the Peace Corps, as well as obtaining employment in certain areas, which are not limited to:
- Law Enforcement
- Emergency Management
- Joining the military
- Public Health
- Social Work
- Public Defenders/Legal Advocacy (low-income families or non-profit organizations)
Additional requirements that must be met also include:
- Having a record of 120 monthly, on-time payments on the loan (forbearance and deferred payments do not count)
- Remaining employed in the public service field for a minimum of 10 years
What Types of Loans Can Be Forgiven Through the Program?
The three main types of loans that can be forgiven through the Public Service Loan Forgiveness Program are Federal Direct Consolidation Loans, Federal Direct Stafford Loans (subsidized and unsubsidized) and Federal Direct PLUS loans.
Students/graduates with Perkins loans can have 70% of their balance forgiven if they’re an active member of the Peace Corps, while borrowers with a Perkins loan that are also members of the military can have 100% of their loan forgiven.
If you’re not sure if the loan you’ve taken out falls under this category, it is a good idea to contact your lender to find out. Make sure to mention the Public Service Loan Forgiveness Program specifically. In the event that your loan doesn’t make the cut, inquire further about other related forgiveness programs. As mentioned before, you could qualify for the income repayment plan but the only way to find out is to ask.
Even individuals currently making their payments on time with no issues could still benefit from finding out if they qualify for any forgiveness programs. If anything, knowing such info could come in handy in the case of an unforeseen situation, such as getting laid off/being unemployed, dealing with medical expenses, family emergencies, etc.
It always helps to know what all the options are, should you find yourself in a situation where you’re not able to fulfill your responsibilities as a borrower.