PUBLIC SERVICE LOAN FORGIVENESS Presented by: Scott Harrison, Assistant Director Student Financial Services (SFS)
PSLF Program Basics The remaining balance on your qualified Direct Loans is forgiven and non-taxable. 120 non-consecutive, qualifying payments to be eligible for forgiveness. Complete forms yearly for both the repayment program of your choice as well as to certify you are a public service employee. Once you submit the employer certification all of your loans will transfer to FedLoan Servicing. The first year borrowers will be eligible for forgiveness will be 2017.
Choosing Repayment Plans PSLF requires you to complete 120 nonconsecutive, separate, on time, full monthly payments. Choose the repayment plan that provides the lowest monthly payment amount. If married and file a joint tax return both of your incomes will be considered. Reapply yearly to remain in the program.
Repayment Plans Revised Pay As You Earn (REPAYE): New borrowers, all loans obtained after 10/01/07. FFELP Loans prior to 10/01/07 need to be consolidated into a Direct Consolidation Loan. Monthly payment amount determined by annual income, family size, total amount of eligible loan debt and state of residence. Loan forgiveness regardless of PSLF at 25 years.
Repayment Plans Income Based Repayment (IBR) Monthly payment amount determined by annual income, family size, total amount of eligible loan debt and state of residence. Must show partial financial hardship to qualify. FFELP Loans prior to 10/01/07 need to be consolidated into a Direct Consolidation Loan. Loan forgiveness regardless of PSLF at 20 years.
Repayment Plans Qualifying for Partial Financial Hardship: Annual amount due on all loans under the 10 year standard plan exceeds discretionary income (AGI minus 150% poverty guidelines per family size and location) by 10% for IBR. Basic qualification: If your monthly payment amount on an income driven repayment plan is lower than the standard 10 year repayment plan, you have demonstrated partial financial hardship.
Repayment Plans Resources Online calculators available on www.studentloans.gov Access Assist can provide in depth discussion of your repayment options as an unbiased resource. 8:30AM to 8:30PM EST, Monday Friday. www.accessgroup.org/access-assist 844 755-4357 (Toll free).
PSLF Job Qualifications Nonprofit 501(a) or 501(c)(3), most hospitals. Most common jobs list can be found on the employment certification form for PSLF. AmeriCorps or Peace Corps positions qualify. Most common jobs that do not qualify: private practices, labor unions, partisan political, for profit or non-tax exempt non-profit organizations and religious organizations.
PSLF Job Qualifications PSLF Employment Certification Form: Available at www.studentloans.gov under PSLF. 1. Excludes non-eligible positions (political, religious, etc.) 2. Includes tax-exempt organizations, not-for-profit 3. Verifies employer provides public service: Emergency Management Public Safety, Law Enforcement Early Childhood Education General Public Health Public or School Library Services Military Service Public Interest Legal Services Servicing the Disabled or Elderly Public Education Other School Based Services
Your Qualifications For PSLF Cannot have defaulted on federal student loans. Full-time employed: 30+ hrs./week. Combination of 30+ hrs./week from multiple jobs. Must file paperwork to certify you work in a qualifying position on a yearly basis. Must enroll in an eligible repayment program.
Qualifying Your Loans for PSLF Loans that qualify: Find your loans on www.studentloans.gov. Review if they are Direct Loans, FFELP Stafford or PLUS loans. Direct Loans and Direct Graduate PLUS qualify. Consolidating FFELP loans and/or Federal Perkins loans: Watch for subsidized loans. Consolidating a new loan into an existing consolidation loan. Loans must be in repayment status. Cannot qualify loans while in an in-school deferment.
Changing Employers You do not need to contact Fed Loan Servicing when leaving a position. Continue with monthly payments until ready to file employment certification form the following year. Gaps in between employment: Continue repayment or apply for a deferment or forbearance. Payments made during postponement do not count toward PSLF.
If You Do Not Finish PSLF Interest has accrued, which increases total debt. Repayment plans have built in forgiveness after 20 or 25 years in repayment. Forgiven amount through payment plans is taxable. The amount forgiven through PSLF is not taxable.
Helpful Hints Be sure to recertify with your employer AND reapply for your payment plan every year. If you do not: Your payments may not qualify for PSLF. Your repayment plan may be changed to the standard 10 year plan. Interest will capitalize, increasing the total amount you repay. Keep notes regarding your contact with FedLoan Servicing: Obtain the number and extension of whomever you speak with. Write a description of any promises or policy FedLoan Servicing provides during your contact.
Fed Loan Servicing website: www.myfedloan.org PSLF Resources Obtain the PSLF Employment Certification Form PSLF Loan Line for students: 855 265-4038 Application for Forgiveness not available yet. www.studentaid.gov/publicservice www.accessgroup.org/access-assist Access Group contact for reviewing federal loan repayment options.
Questions?