Paying off student loans takes years, so it’s good to know options that can help you out.
One such option is student loan forgiveness for federal employees.
The government cancels out any unpaid debts of qualified employees.
However, borrowers should be working for an eligible employer.
Moreover, they should first make 120 qualified student loan payments.
We’ve laid out the entire program for you with this easy guide for Federal Employees.
Student Loan Forgiveness for Federal Employees Guide
1. What is the Public Service Loan Forgiveness (PSLF) Program?
The US government offers Public Service Loan Forgiveness (PSLF) Program to eligible federal employees.
If you qualify, under certain conditions, then your remaining balance on your loans can be forgiven.
Professionals like public school teachers, firefighters, and military staff can apply for public service loan forgiveness program.
2. Who qualifies for student loan forgiveness for federal employees?
Full-time federal employees can apply for student loan forgiveness.
However, there’s also eligibility for employers.
Borrowers should be working for either of the following:
- Federal, tribal, state, or local institutions
- Tax-exempt non-profit organizations
- Non-tax exempt groups that provide public services
- Full-time volunteers of AmeriCorps or Peace Corps
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3. Who is disqualified from student loan forgiveness for federal employees?
Government contractors do not qualify for student loan forgiveness for federal employees.
Aside from them, the employees of the following are also disqualified:
- Political groups
- Labor unions
- Non-tax exempt non-profit groups that do not provide public service
4. Which debts qualify for student loan forgiveness for federal employees?
Only Direct Loans qualify for student loan forgiveness for federal employees.
These are loans directly borrowed and therefore usually have lower interest rates.
There are four types of Direct Loans:
- Direct Subsidized Loans (for undergraduates)
- Federal Direct Unsubsidized Loans (for undergraduates, graduate students, and professionals)
- Parent Loan or Direct PLUS Loans (for parents, graduate students, and professionals)
- Direct Consolidation Loans (federal student loans are combined into one)
Meanwhile, these debts are not qualified: Federal Family Education Loans, Perkins Loans, and private loans.
5. What federal loan do you have?
Know the kind of federal loan you have by visiting the site called “My Federal Student Aid.”
If the word “direct” is listed beside the name of your loan, then you have a Direct Loan.
Check your loan type to see if you qualify for federal student loan forgiveness.
6. Employment certificate
400,000 people could lose out on student loan forgiveness after following PSLF guidelines for years #PSLF https://t.co/ZBp7D28X2N
— ProtectPSLF (@ProtectThePSLF) June 30, 2017
Applicants for federal student loan forgiveness should fill out an Employment Certification Form for Federal Employees.
The form is filed every year or whenever an applicant changes employers.
The certificate shows:
- Federal employer’s ID number
- Start and end dates of applicant’s employment
- Employment status
Which Student Loan Payments Qualify?
Defend Federal Student Loan Forgiveness Benefits (PSLF) https://t.co/AkfDui7k68 via @Change
— Jeffrey Lowe (@sportsvibeLive) July 13, 2017
The Congress created student loan forgiveness for federal employees in 2007.
However, only payments made after October 1 that year qualify.
Since public service loan forgiveness applications get reviewed only after roughly 10 years of repayment, federal employees can start applying for student loan forgiveness only in fall of this year.
Basically, you need 120 qualified payments to apply for student loan forgiveness for federal employees.
However, these do not have to be consecutive payments.
It’s okay if you skipped payments in some months.
Lastly, qualified payments should be:
- Under a repayment plan
- For a full monthly bill
- Paid within 15 days after the deadline
- Made while the borrower was working for a qualified employer
RELATED: 4 Income-Driven Student Loan Repayment Plans For Federal Loans
Although people in public service can apply, some payments do not qualify for student loan forgiveness for federal employees.
These payments include:
- Monthly loan fees paid when you were not yet a federal worker
- Fees paid during the grace period after your graduation
- A deferment on your loan
- A forbearance when monthly payments were temporarily suspended or reduced
Do you want to try the student loan forgiveness program for federal workers? Check out this video to learn how:
Student loan forgiveness can ease the financial burdens of qualified employees.
If you’re a government employee, make sure to take advantage of the benefits and privileges of student loan forgiveness for federal employees.
Ask your employer if you qualify for this special benefit.
It may just be a great financial boost for you and your family.
Are you interested in applying for student loan forgiveness? Why or why not? Tell us in the comments below!
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