Public Service Loan Forgiveness Program

The borrower must be employed full time (in any position) by a public service organization, or must be serving in a full-time AmeriCorps or Peace Corps position. For purposes of the Public Service Loan Forgiveness Program, the term “public service organization” means –

• A federal, state, local, or Tribal government organization, agency, or entity (includes most public schools, colleges and universities);
• A public child or family service agency;
• A non-profit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code (includes most not-for-profit private schools, colleges, universities, hospitals, and community health centers);
• A Tribal college or university; or
• A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services –
• Emergency management;
• Military service;
• Public safety;
• Law enforcement;
• Public interest law services;
• Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten);
• Public service for individuals with disabilities and the elderly;
• Public health (including nurses, nurse practioners, nurses in a clinical setting, and full-time professionals engaged in health care practioner occupations and health care support occupations);
• Public education;
• Public library services; and
• School library or other school-based services.

• Federal Direct Stafford/Ford Loans (Direct Subsidized Loans)
• Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans)
• Federal Direct PLUS Loans (Direct PLUS Loans) – for parents and graduate or professional students
• Federal Direct Consolidation Loans (Direct Consolidation Loans)

Although loan forgiveness under this program is available only for loans made and repaid under the Direct Loan Program, loans made under other federal student loan programs may qualify for forgiveness if they are consolidated into a Direct Consolidation Loan.

• The borrower must not be in default on the loans for which forgiveness is requested.
• The borrower must be employed full time by a public service organization –
• When making the required 120 monthly loan payments (certain repayment conditions apply – see website for further information);
• At the time the borrower applies for loan forgiveness; and
• At the time the remaining balance on the borrower’s eligible loans is forgiven.

IMPORTANT NOTE: The Public Service Loan Forgiveness Program provides for forgiveness of the remaining balance of a borrower’s eligible loans after the borrower has made 120 payments on those loans. In general, only borrowers who are making reduced monthly payments through the Direct Loan Income Contingent or Income Based repayment plans will have a remaining balance after making 120 payments on a loan.

For more information contact:
For more detailed information, refer to the final regulations for this program (34 C.F.R. 685.219) that the U.S. Department of Education issued on October 23, 2008. You may view the final regulations by linking to http://edocket.access.gpo.gov/2008/pdf/E8-24922.pdf.

Summaries of funding programs are provided by RAC for your convenience. Please contact the funder directly for the most complete and current information.