PSLF (Public Service Loan Forgiveness)

Public Service Loan Forgiveness (PSLF) is a program that cancels the remaining balance on Direct Loans after you've made 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer.

Qualifying Employers:

• Government organizations (federal, state, local, tribal)
• Non-profit organizations with 501(c)(3) status
• AmeriCorps or Peace Corps

Qualifying Payments:

• Must be made under an income-driven repayment plan (IDR)
• Must be made while working full-time (30+ hours/week) for a qualifying employer
• Must be on-time and for the full amount due
• Only Direct Loans qualify (FFEL and Perkins loans must be consolidated first)

How It Works:

1. Work for a qualifying employer
2. Enroll in an income-driven repayment plan
3. Make 120 qualifying monthly payments
4. Submit PSLF application after 120 payments
5. Remaining balance is forgiven tax-free

Common Mistakes:

• Not certifying employment annually (use the PSLF Help Tool)
• Being on the wrong repayment plan (must be IDR or 10-year standard)
• Not consolidating non-Direct Loans
• Switching to a non-qualifying employer before 120 payments

Key Benefit: Unlike other loan forgiveness programs, PSLF forgiveness is tax-free. If you have $80,000 forgiven, you don't owe taxes on that amount.