What Are Qualifying Payments for PSLF?

The Public Service Loan Forgiveness (PSLF) program offers federal student loan borrowers a path to have their remaining loan balance forgiven. This program is designed for individuals who dedicate their careers to public service. Understanding the criteria for “qualifying payments” is essential for borrowers aiming for this forgiveness.

Core Criteria for Qualifying Payments

A payment qualifies for PSLF if it meets several requirements. First, only loans under the William D. Ford Federal Direct Loan (Direct Loan) Program are eligible. Other federal loan types, like Federal Family Education Loan (FFEL) Program loans or Perkins Loans, do not qualify unless they are consolidated into a Direct Consolidation Loan. Payments made on the new Direct Consolidation Loan count toward the 120-month requirement, but payments on original FFEL or Perkins loans do not.

Second, payments must be made under a qualifying repayment plan. Income-Driven Repayment (IDR) plans, including SAVE, PAYE, IBR, and ICR, are generally the most beneficial for PSLF. These plans adjust monthly payments based on income and family size, which often results in a remaining loan balance to be forgiven after 120 payments. The 10-Year Standard Repayment Plan also qualifies, but typically results in the loan being paid in full before forgiveness.

Third, each payment must be “on-time,” received by the loan servicer within 15 days before or after the due date. Payments must also be for the full amount specified on the monthly bill. Partial payments, even if they total the full amount over multiple submissions, count as only one qualifying payment.

Finally, payments must be made while the borrower is employed full-time by a qualifying employer. This concurrent employment is a core aspect of the PSLF program. Qualifying employment details are in the next section.

Qualifying Employment

Qualifying employment for PSLF depends on the employer’s type, not the job title or duties performed. Employment with government organizations at any level qualifies, including federal, state, local, or tribal government entities. Examples include public schools, public hospitals, and the U.S. military.

Not-for-profit organizations tax-exempt under Section 501(c)(3) of the Internal Revenue Code also qualify. This includes a broad range of charitable organizations, hospitals, and educational institutions. Other not-for-profit organizations not 501(c)(3) entities may qualify if they provide specific public services. These services include public health, education, public safety, emergency management, or public interest law.

Full-time employment is a strict PSLF requirement, defined as working at least 30 hours per week or meeting the employer’s definition of full-time, whichever is greater. Borrowers can combine hours from multiple part-time jobs if all employers are qualifying organizations and combined hours total at least 30 per week. Employment with for-profit organizations, labor unions, or partisan political organizations does not qualify for PSLF.

Tracking and Certifying Progress

Tracking and certifying progress toward PSLF is important for borrowers. This involves submitting the Public Service Loan Forgiveness (PSLF) Employment Certification Form (ECF) to verify qualifying employment and track eligible payments. Submitting the ECF annually or whenever employment changes helps ensure accurate record-keeping and allows borrowers to monitor their progress.

Borrowers can obtain the official PSLF form through the Federal Student Aid (FSA) website, often using the PSLF Help Tool. The Help Tool guides users, assisting in identifying qualifying employers and pre-populating certain information. To complete the form, borrowers provide personal details and loan servicer information. The employer then completes their section, providing details like their Employer Identification Number (EIN), dates of employment, and an authorized signature.

After completion, the form must be submitted. The PSLF Help Tool offers a streamlined electronic submission process, which can include digital signatures. Alternatively, borrowers can print, sign, and mail or fax the form to the designated loan servicer. Upon submission, the loan servicer reviews the form to confirm employment eligibility and updates the borrower’s qualifying payment count. Borrowers can track updated payment counts through their loan servicer’s online portal or on StudentAid.gov.

Final Application for Forgiveness

Once a borrower has made 120 qualifying payments and all employment periods are certified, the final step is to apply for forgiveness. This application is a distinct process from the annual employment certification. Borrowers should only submit the PSLF Application for Forgiveness after meeting the 120-payment threshold.

The final application form formally requests the discharge of the remaining loan balance. It can be accessed through the PSLF Help Tool on the Federal Student Aid website, especially once a borrower’s payment count indicates eligibility. The Help Tool facilitates submission, or a standalone form can be mailed or faxed to the loan servicer. This application also serves as the final employment certification, confirming qualifying employment at the time of application.

After submission, the loan servicer reviews the application along with all previously certified employment and payment history. The borrower receives notification regarding the decision, whether it is an approval or denial. If approved, the remaining eligible federal student loan balance, including outstanding interest and principal, will be forgiven. This forgiven amount is not considered taxable income under federal law. Any payments made beyond the 120 qualifying payments may be refunded to the borrower.