In 2016, 42 percent of LSU students graduated with some form of student debt averaging $24,699 in loans per student, according to The Institute for College Access & Success.
On the typical 10-year repayment program, the average student would expect to be paying around $200 a month for the next decade. For others who pursued graduate or doctoral degrees, loan repayment grows from a stressor to a life-hindering problem.
Enter the Public Service Loan Forgiveness Program (PSLF). Designed to help individuals with high student debt and low-paying jobs, the PSLF allows all student loan debt to be forgiven after 120 monthly payments, provided the individual works for any level of government or for certain non-profits.
After 10 years, the government will just forget all about the money you owe them, sort of like that time your bartender kept putting your drinks on the wrong tab. You still woke up with a hangover, but at least it was a free hangover.
Introduced in 2007, the first wave of students now qualifies for forgiveness. The program, however, has not been without its complications. Last year, groups of borrowers found their eligibility of the program had been rescinded, prompting a small group of lawyers along with the American Bar Association to sue the Department of Education for allegedly changing their stance on who qualifies for the program.
Given the uncertainty of the program, it’s important students take steps to prevent any potential roadblocks to forgiveness before making years of non-qualifying payments.
First, make sure you have the correct loan type and are participating in the correct loan repayment plan. The PSLF will only apply to federal Direct Loans. If you have another type of federal loan such as a Perkins Loan, you can consolidate into a Direct Consolidation Loan, which are eligible for the program.
Your repayment plan must be an income-driven plan, meaning your payments are based on a percentage of your income, not by your loan amount. This payment plan is not the standard for Direct Loans, so you must opt-in before beginning payments if you want the payments to qualify for the PSLF.
Loan repayments will not be considered unless you work for a qualifying employer. This includes federal, state and local governments as well as tax-exempt not-for-profit organizations. Note that labor unions, partisan political organizations and government contractors do not fall under these categories.
While it’s not a requirement to receive forgiveness, the Department of Education recommends you file an Employment Certification form every year and whenever you change jobs to keep track of your employer’s eligibility.
You should also personally keep copies any records of payments, correspondences and Employment Certification forms you make and not rely on others to keep these records for the 10 years you must wait before applying for forgiveness
While cases like the lawyers suing the Department of Education for misinformation have been creating uncertainty for the PSLF, you should have nothing to worry about if you follow these requirements.
If you ever have any questions about the program you should refer to studentaid.ed.gov or contact FedLoan Servicing.
Jay Cranford is a 23-year-old finance senior from St. Simons Island, Georgia.
