Learn About Public Service Loan Forgiveness Program Details

What Is the Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness (PSLF) program is a federal initiative created in 2007 that allows borrowers with federal student loans to have their remaining loan balance forgiven after they make 120 qualifying monthly payments while working in public service jobs. The program was designed to encourage people to enter careers in government, education, military service, and nonprofit organizations by offering relief from student debt after a decade of qualifying payments.

The PSLF program operates under specific rules established by the U.S. Department of Education. To participate, a borrower must work for a public service employer, make 120 qualifying payments under an income-driven repayment plan, and have the correct type of federal student loan. The program does not forgive loans automatically—borrowers must submit a Public Service Loan Forgiveness Application after they believe they have met the requirements.

According to Federal Student Aid data, approximately 116,000 borrowers have received PSLF forgiveness totaling over $8.2 billion as of 2023. However, the program has seen changes in recent years. In 2022, the Department of Education introduced limited-time provisions that allowed borrowers to count periods of payment they previously thought didn't count toward the 120 payments, which led to a significant increase in approvals.

The program covers several types of federal student loans, including Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. However, Federal Family Education Loans (FFEL) and Perkins Loans do not originally count unless they are consolidated into a Direct Consolidation Loan. Private student loans are never covered under the PSLF program.

Practical Takeaway: Understanding that PSLF requires 120 payments while working in public service helps borrowers decide if this program aligns with their career path and financial goals. Borrowers should verify they have Direct federal loans rather than FFEL or private loans, as only Direct loans count toward the 120-payment requirement.

Types of Employers and Jobs That Count

PSLF covers borrowers working full-time for government agencies, nonprofits, and other public service organizations. The Department of Education maintains a Public Service Loan Forgiveness Help Tool—an online database where borrowers can search for specific employers to determine whether their workplace counts. This tool is essential because not all nonprofits or government positions automatically count; the employer and sometimes the specific position must meet federal criteria.

Government employers include federal, state, local, and tribal government agencies. Examples include public schools, public universities, city departments, state highway patrol, the U.S. military, the Department of Veterans Affairs, and public libraries. A person working as a teacher in a public school, a social worker at a county office, or an engineer for a state transportation department would all be in positions covered by PSLF.

Tax-exempt nonprofit organizations also count if they meet specific criteria under Section 501(c)(3) of the Internal Revenue Code. This includes hospitals, universities, charities, religious organizations, food banks, homeless shelters, and advocacy groups. However, certain nonprofits—such as credit unions, chambers of commerce, and social clubs—do not count even if they have nonprofit status. A person working as a nurse at a nonprofit hospital or a counselor at a nonprofit mental health center would typically count.

Employment requirements under PSLF include working full-time, which means working at least 30 hours per week for most employers. Some public service employers have different definitions of full-time, so borrowers should verify their employer's specific threshold. For example, certain public service programs require 40 hours per week. Borrowers working part-time at a qualifying employer do not accumulate credit toward the 120 payments unless they work enough hours to meet the full-time standard.

Military service members in active duty, the National Guard, and the Reserves count as public service employees. Borrowers in these positions make qualifying payments while serving. After leaving military service, they can continue making PSLF payments if they transition to another qualifying public service job, or their remaining payments under PSLF would not be credited if they move to non-qualifying employment.

Practical Takeaway: Before committing to a position with the expectation of PSLF forgiveness, use the Public Service Loan Forgiveness Help Tool to confirm that both the employer and the job meet requirements. This verification step prevents later disappointment if a position does not count toward the program.

Income-Driven Repayment Plans and Payment Requirements

The PSLF program requires borrowers to make payments under one of the four federal income-driven repayment (IDR) plans. These plans calculate monthly payments based on a borrower's discretionary income rather than the loan balance. The four IDR plans are the Revised Pay As You Earn (REPAYE) Plan, the Pay As You Earn (PAYE) Plan, the Income-Based Repayment (IBR) Plan, and the Income-Contingent Repayment (ICR) Plan. Payments made under the Standard Repayment Plan do not count toward PSLF, even if the borrower works in public service.

Under REPAYE, monthly payments are generally 10 percent of discretionary income. Under PAYE, payments are 10 percent of discretionary income but capped at what a borrower would pay under the Standard 10-year plan. Under IBR, payments are typically 15 percent of discretionary income, and under ICR, payments are either 20 percent of discretionary income or what the borrower would pay on a fixed 12-year plan, whichever is lower. Discretionary income is calculated as the difference between the borrower's adjusted gross income and 150 percent of the federal poverty line for the borrower's family size and state.

Borrowers on income-driven plans may have $0 monthly payment obligations if their income falls below the poverty line threshold for their family size. Even though the payment is $0, these months count toward the 120 qualifying payments required for PSLF. This provision is particularly helpful for borrowers early in their careers or those experiencing temporary income reductions. A teacher earning $25,000 per year with a family of three might owe $0 per month under REPAYE if their discretionary income calculation shows they are below the threshold.

The 120 payments do not need to be consecutive, but they must all be made while employed in a qualifying public service position. If a borrower leaves a qualifying job and works in the private sector, payments during that period do not count toward PSLF. Similarly, periods of deferment or forbearance do not count unless they occurred before June 2023 under special temporary provisions. Borrowers must recertify their income annually to remain on an income-driven plan.

Payment amounts can change year to year on income-driven plans based on recertification of income. Some years, payments may be lower; other years they may be higher. This flexibility can help borrowers during periods of lower income or unexpected financial hardship. For example, a social worker's payments might decrease during a year of reduced hours but increase the following year with a promotion.

Practical Takeaway: Selecting the right income-driven repayment plan before making PSLF payments is crucial. Borrowers should compare the four plans based on their income, family size, and expected loan balance after 120 payments to understand which plan may result in the lowest total payments over 10 years.

Counting Payments and Employment Certification

Borrowers must submit an Employment Certification Form to document that they have been working for a qualifying employer. The Department of Education uses this form to verify employment and count the number of qualifying payments made toward the 120 required. Borrowers can submit this form annually, or when changing jobs, to keep accurate records. Many employers have a contact person designated to certify employment information on the form.

Counting payments toward PSLF can be complex because not all payments automatically count. Payments on non-income-driven repayment plans do not count. Payments made while the loan is in deferment or forbearance typically do not count, with some exceptions created by temporary provisions. Payments made while the borrower was not working for a qualifying employer do not count. Additionally, payments made on loans that were in default do not count until the loan is brought out of default status.