If your student loans are federally backed and you work in public service, you may qualify for loan forgiveness.
The College Cost Reduction and Access Act of 2007 established the Public Service Loan Forgiveness (PSLF) program. The PSLF discharges any remaining student loan debt after 10 years of full-time employment in public service. Income is not a factor in eligibility.
To apply for the student loan forgiveness program you need to contact the Federal Student Aid Information Center by calling (800) 433-3243, or visit the Dept. of Education Student Aid Web page. To see a detailed outline of the program for public service employees read the document Loan Forgiveness for Public Service Employees. (PDF)
The Dept. of Education lists the following three qualifications for forgiveness:
Qualifying borrowers will have the the remaining balance on the borrower’s eligible loans forgiven.
The following William D. Ford Direct Loan Program loans are eligible for forgiveness:
Other Federal Family Education Loan (FFEL) Program loans qualify if the borrower consolidates these federal loans into a federal Direct Consolidation. These include Federal Perkins Loans for certain health professions and nursing loans. The interest rate on a Direct Consolidation Loan is a fixed rate based on a weighted average of the interest rates of the loans that you consolidate, rounded up to the next higher one-eighth of one percent.
Loans in default are not eligible. However, a defaulted loan may become eligible if the borrower rehabilitates the defaulted loan. Parent Plus loans are not eligible to be repaid under IBR or ICR. However, a Parent Plus borrower could consolidate the Plus loans and then choose ICR for the new Direct Consolidation Loan. Note that the parent who signed the Parent Plus loan contract must be employed in public service to qualify, and not necessarily the student. (See the Bills.com resource Parent Plus Loan Consolidation to learn more.
The specific job that you perform does not matter, as long as you are employed by a public service organization and work 30 or more hours per week. According to the Dept. of Education, any federal, state, or local government organization or agency and most 501(c)(3) non-profit organizations qualify for the PSLF program. However, the organization may not be a labor union, a partisan political organization, or an organization that is engaged in religious activities unless the qualifying public services it provides are unrelated to religious instruction, worship services, or proselytizing.
Visit the Dept. of Education Public Service Loan Forgiveness Web page to learn more about how student loan forgiveness works.