The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Federal Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

Created under the College Cost Reduction and Access act of 2007.

What is Qualifying Employment?

Qualifying employment for the PSLF Program is not about the specific job that you do for your employer. Rather, it is about who your employer is. Employment with the following types of organizations qualifies for PSLF:

  • Government organizations at any level (federal, state, local, or tribal)
  • Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
  • Other types of not-for-profit organizations that are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services

*Serving as a full-time AmeriCorps or Peace Corps volunteer also counts as qualifying employment for the PSLF Program.

What are the Eligible Repayment Plans?

You must be enrolled in an income-based repayment plan:

  • REPAYE (Revised Pay as you earn) –limits your payments to 10% of your discretionary income
  • PAYE (Pay as you earn)- limits your payments to 10% of your discretionary income
  • IBR (Income-based repayment)- 15% of your discretionary income
  • Income Contingent Repayment- similar to IBR, not used a lot, typically only used for Parent PLUS loans (ONLY ICR is available) maximum of 20% of income

*If you are enrolled in a Standard repayment plan and then go to one of the income based plans you can combine the Standard and income-based together.

What is a Qualifying Monthly Payment?

A qualifying monthly payment is a payment that you make:

  • after Oct. 1, 2007;
  • under a qualifying repayment plan;
  • for the full amount due as shown on your bill;
  • no later than 15 days after your due date; and
  • while you are employed full-time by a qualifying employer.

*You can make qualifying monthly payments only during periods when you are required to make a payment. Therefore, you cannot make a qualifying monthly payment while your loans are in an in-school status, the grace period, a deferment, or a forbearance.

What’s Next?

Public Service Loan Forgiveness can be confusing, especially when trying to tackle it on your own. If you have questions, you can check out iGrad for some useful webinars and articles to learn more.

You can also check out this tool that can help you fill out your forms.

If you have any questions or need additional assistance, our financial education coaches will be able to assist you. Please contact us at or phone 212-998-4227.