6 True Answers about Public Service Student Loan Forgiveness

Despite what some false headlines making the rounds on April 1 and earlier have said, President Barack Obama will not forgive all student loans.

Study loan

Study loan 

Regardless of what you’ve seen, or what you may hope, there’s no executive order coming to wipe your student loan slate clean. However, that doesn’t mean there aren’t real ways to get rid of your student loans without paying them.

The Consumer Financial Protection Bureau estimates that about one-quarter of workers in the U.S. qualify for Public Service Loan Forgiveness and fail to take advantage of it. That’s a true story that sounds hard to believe.

Make sure the prank isn’t on you by checking out these answers to commonly asked questions about the program.

1. What is Public Service Loan Forgiveness? This federal program eliminates, or forgives, federal student loans for specific borrowers. To qualify, you must be employed full time in an eligible public service or nonprofit job, and you must have made 120 eligible on-time payments in no less than 10 years.

Payments don’t have to be consecutive, so you can gradually work toward forgiveness over time. However, only eligible payments made during eligible employment count toward that 120 number.

2. What counts as an eligible payment?  Any payment made on a loan from the government’s direct loan program is eligible. If you have other federal loans, you can consolidate them into this program to potentially qualify. However, any payments you’ve made up until that point won’t count toward your 120.

3. What jobs are eligible? Many people assume that only teachers, social workers or other public servants are eligible for this program, but that’s a total myth.

The truth is that it’s not what you do that makes you eligible for loan forgiveness, but rather whom you do it for. Any employee who works full time at public or nonprofit institutions can be eligible for forgiveness. Yes, anyone – whether you spend your time in the boardroom or the mailroom, you can qualify if you make eligible payments.

4. How can I tell if my job is eligible? The easiest way is to ask your employer. As part of their push to raise awareness about loan repayment options, the Consumer Financial Protection Bureau created a handy guide to help your employer help you. If your human resources team isn’t sure whether your company qualifies, that guide should point them in the right direction.

Some eligible employers include AmeriCorps, Peace Corps and many 501(c)(3) nonprofits, including those in the public interest law, health and disability services fields. Labor unions and partisan political organizations are not eligible, even if they are nonprofits.

Workers at religious organizations are also ineligible, but only if their job functions include engaging in religious activities related to religious instruction, worship services or any form of proselytizing.

5. How do I apply? Contact your study loan servicer – the company you make your payments to – and confirm their procedure. Download a PSLF Employment Certification to help you track your progress.

You can submit that form to your servicer once a year. If you don’t do this, you will be responsible for producing pay stubs or other proof that you worked at an eligible employer when you officially apply for forgiveness.

6. Are there other forgiveness programs available? Absolutely. Multiple federal and state loan forgiveness programs exist. Check out this loan forgiveness e-book from SALT™ for an almost-comprehensive list.

Source: http://educationloanformba.tumblr.com/post/140073516985/6-true-answers-about-public-service-student-loan