Important Things You Must Know About Public Service Loan Forgiveness
Public Service Loan Forgiveness or simply known as PSLF Program is about forgiving the remaining balance on Direct Loans after you’ve made 120 qualifying monthly payments under the qualifying repayment plan while you’re working full time for qualifying employer.
Well, you might be wondering what is a qualifying employment. Well, the qualifying employment for PSLF Program isn’t about specific job that you are doing for your boss. But this is much more on who your employer is. The employment with 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 are providing certain kinds of qualifying public services are the type of organizations qualified for PSLF Program. As a matter of fact, serving in full time Peace Corps or AmeriCorps position is also counted as a qualifying employment for PSLF Program.
However, labor unions, for-profit organizations, partisan political organizations and non-profit organizations that aren’t tax exempted and not providing qualifying service are employers who don’t qualify for PSLF.
But what is considered as full time employment for PSLF? As a matter of fact, you’ll 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.
What’s a qualifying payment is another question that many people are wondering. 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. You can also make qualifying monthly payments during periods when you’re required to make the payment. With this being said, you can’t make qualifying monthly payments while your loans are in the grace period, in-school status, a forbearance, deferment or default. You must know as well that the 120 qualifying monthly payments don’t have to be consecutive.
You can receive credit only for one payment every month even if you make more of the required amount for your monthly payments.