What Is Public Service Loan Forgiveness?
PSLF Program or Public Service Loan Forgiveness Program is all about forgiving the remaining balance on Direct Loans after making 120 qualifying monthly payments under the qualifying repayment plan while working full time for qualifying employer.
Well, there is a chance that you are not aware of what a qualifying employment is. Well, qualifying employment for PSLF Program is not only on specific job that you’re doing for your boss. Rather, it’s more on who your employer is. The employment that have government organizations at any level be it tribal, local, state or federal, not-for-profit organizations that are tax exempted of the Internal Revenue Code and other kinds of not-for-profit organizations that provide certain types of qualifying public services are the orgs that are qualified for PSLF Program. Whether you believe it or not, serving in full time Peace Corps or AmeriCorps position is deemed as qualifying employment for PSLF Program.
On the other hand, employers who aren’t qualified for PSLF include labor unions, for-profit organizations, partisan political organizations and non-profit organizations that aren’t tax exempted and not providing qualifying service.
But what is actually considered as being a full time employment for PSLF? Truth is, you would be considered to work full time if you have met your employer’s definition of full time or, has worked at least 3 hours per week or whichever is greater. In the event that you are employed in more than one qualifying part time job, then you may meet full time employment requirement if you work a combined average of 30 hours every week at least with different employers.
As for the borrowers who’re still employed by not-for-profit orgs, the time spent on worship services, religious instruction or any kind of proselytizing might not be counted toward meeting a full time employment requirement.
And another concern that many people wonder is what is the qualifying payment? The payment you are making under qualifying repayment plan, no later than 15 days after due date, for full amount due as shown on the bill and while you’re employed full time by qualifying employer is how we can simply define what qualifying payment is about. When you are required to make the payment, you can also make qualifying monthly payments during periods. With this in mind, while the loan is in grace period, in-school status, a forbearance, deferment or default, you can’t make qualifying monthly payments. In addition to that, you have to know that your 120 qualifying monthly payments don’t have to be consecutive.
And if you make monthly payments more than the amount you required to pay, you should take into mind that you could receive only the credit for one payment every month.