public service loan forgiveness


Imagine that you are entering a contract. Let’s say for purposes of this example, you are going to paint the interior of someone’s home. The contract basically says you, the painter, have to perform your end of the contract. You have to paint the house. You have to buy the paint. All that good stuff. And you do so. And you work really hard and the house looks amazing and it look FOREVER but you are proud of your work. And then when you are all finished, the owner of the house says “Ehh, nevermind. For _______ reason, I’m not going to pay you. Nice job though, thanks for your service.”

Does that sound fair? No, obviously not. But that is exactly what Public Service Loan Forgiveness is like to me. I want to love it for all of the good things it promises, but I can’t because of the potential it has to completely screw people over.

For many student loan borrowers, PSLF is their only option. Perhaps the salary in your profession is grossly inadequate to pay for the six figures in student loan debt it cost to get the degree for your profession.  For example, maybe you went to law school and pursued a career as a public defender. You work hard every day and you are grossly underpaid for the service you provide. We need good public defenders. We need good prosecutors. That’s a big deal. And it is true for a host of other public sector jobs.

The Department of Education announced last Wednesday that 96 borrowers have received forgiveness of their student loans since the first borrowers became eligible in October 2017. That amounts to $5.52 million forgiven. Which sounds like a lot of money. But allow me to paint an accurate and horrifying picture for you. Over 28,000 people applied for forgiveness under PSLF since October 2017. 98 people have received it. In otherwords, far less than 1% of people who applied actually received forgiveness!

Why only 1% of applicants have received forgiveness under PSLF:

One thing is for sure, the PSLF program is PICKY. And that makes sense. Here are the top reasons why I believe most people have their loans forgiven. [Related: Everything you need to know about PSLF]

Applicants failed to fill out the requisite paperwork or filled it out incorrectly. Some people get rejected for failing to fill out the requisite paperwork or for filling it out incorrectly. Pay close attention to ensure your employer is filling out their section correctly in addition to paying close attention to make sure there are no errors in your section. Be sure you and your employer are filling out the Employment Certification Form each year. This will keep a paper trail to show that your employer qualifies for PSLF and help things go smoother the year that you finally become eligible.

Applicants had the wrong kind of loans. Some people applying for forgiveness have FFEL loans when Direct Loans are required. Direct loans weren’t as popular as FFEL in 2007, when the PSLF program was first introduced. Since direct loans are required in order to receive forgiveness under PSLF, it makes sense that if someone without direct loans applied, they’d be rejected from the program. FFEL loans were kind of the norm in 2007 and I’m guessing a lot of folks who applied for PSLF this year were turned down because they had FFEL loans instead of direct loans. Avoid this problem by making sure your loans qualify for PSLF. Tip: If you have FFEL (or Federal Perkins) loans, you can consolidate your student loans into a direct loan to still qualify for PSLF.

Applicants didn’t make the requisite 120 “qualifying” payments. Only payments made *after* October 1, 2007 qualify under PSLF. In addition, you HAVE to make your payments under one of the qualifying repayment plans: PAYE, REPAYE, IBR, ICR, or the Standard Repayment Plan. Payments made under any of the other plans don’t count, so make sure you are signed up for one of these plans to qualify. (As an aside, probably don’t sign up for the Standard Repayment plan– you’ll have higher monthly payments and less forgiven in the end). Pay attention to what plan you’re enrolled in and when you started making payments. I personally know several people who were denied forgiveness who thought they were making correct payments only to find out they weren’t signed up for the correct plan.

Another situation where payments won’t qualify for PSLF is when you are working part-time. PSLF payments MUST come from when you are working full time. PSLF payments don’t have to be consecutive to qualify though. (In other words, if you take a few months off of work, the clock won’t reset on you. The time will just pick back up when you start working full time again).

How you can avoid being denied student loan forgiveness under PSLF

Make sure you fill out the Employment Certification form correctly every year. Make sure the year you apply for forgiveness (when you become eligible) that you and your employer have filled out the form correctly. Make sure you have the correct loans (direct loans) for the duration of the 120 payments (10 years) of payments you are making. Make sure you are actually working full time while you are making payments under PSLF. Finally, make sure you are enrolled on a payment plan that qualifies for PSLF.

Use this checklist:

public service loan forgiveness

So, what happens if you get to the end of your ten years or 120 payments and you find out that you are rejected from public service loan forgiveness? You have a couple of options depending on what repayment plan you signed up for. If you chose the standard repayment plan, you’ll simply keep making payments until your balance is $0 (which should be close given that the standard plan is 10 years and you’ll likely have been making payments for 10 years). If you chose one of the income driven repayment plans, you’ll keep making those minimum payments for 10-15 years depending on which plan you chose. At the end of those years, you’ll again have to cross your fingers and hope they’re actually forgiven. The huge bummer about the income driven plans versus public service loan forgiveness is that you have to pay taxes on the amount of your loans that is forgiven as if it were part of your taxable income the year they’re forgiven.

In the end, there is still a ton of uncertainty around public service loan forgiveness. And that’s why I personally chose to forgo public service loan forgiveness, even though I work in the public sector. Instead, I refinanced my student loans with a private lender and honestly, it has given me SO much peace of mind. You can check to see what kind of interest rates you qualify for (without impacting your credit score) by clicking here. Our interest rate after we refinanced was HALF of what it was under REPAYE! We decided to refinance after having Travis at the Student Loan Planner crunch our numbers to help us figure out which plan was best for us.

If you aren’t sure if you can afford your payments if you refinance your student loans, I definitely recommend contacting Travis. He’ll run your numbers for you and show you which of the all the repayment plans is best for you (PSLF, any of the income driven plans, refinancing, etc). Danny and I saved hundreds of thousands of dollars by contacting him! (literally. that is not an exaggeration sadly. Ha).

Are you seeking forgiveness with PSLF? What do you think about PSLF? I’d love to hear from you! 

P.S. If you’re just getting started dealing with your debt, student loans or otherwise, check out my (free) Debt Payoff Starter Kit! It will help you create and crush your financial goals, prioritize your debt so you know what to pay off first to get out of debt FAST so that you can move on with your life (financially).

public service loan forgiveness


  1. The unpredictability of PSLF was why we have avoided it as well, and with my husband working full-time for the state, we could probably qualify. The other risk is that your qualifying job is put in jeopardy at some point or you want to move into the private sector before you’ve finished your ten years. We had a friend who was working for the state and banking on PSLF, but about 5 years in his job situation became very tough and every day he was worried about being fired. He eventually left for a private sector job that paid about the same, but now they have their student loans to deal with (which had grown during years of not paying on them). Ten years is a long time and anything can happen.

  2. My husband is a physical therapist working at a non-profit hospital and is going through PSLF. We have read up a ton on the process, so are regularly doing all of what you suggest in your article. The whole thing makes me really nervous, so we aren’t assuming it is a sure thing. We have chosen to invest, are buying a rental property, etc. so we will have some assets to offload in the event it doesn’t work out. If it does work in our favor, then great, we will have built up a nice group of assets.

    What I find most concerning regarding PSLF, though, is the number of people who are blindly going through “the program” without actually taking the steps to certify their loan and employer. I have spoken to a number of colleagues and friends who are simply assuming it will be forgiven without actually reading up on the ins and outs of the program. I worry for the financial state of these individuals when they wake up one day and realize their loans won’t be forgiven after all.

    1. It sounds like you are definitely doing PSLF the right way! Make sure you save all of your paperwork each year when you certify so that you have proof/a paper trail. 🙂 I love your idea to invest and focus on other assets to offloan if things go south. I agree completely– not going through the program blindly is key! Good luck to you and your husband!

  3. PSLF never seemed like it would be that great for the student-turned-employee. Who wants to keep debt around for 10 years? I didn’t even realize there were so many roadblocks to qualifying for PSLF, which you have illuminated clearly. Better than hanging on to debt for 10 years & hoping to qualify for the program, go crazy & pay the debt down yourself as fast as possible. Do some creative house hacking, sell stuff, or pick-up a side hustle to get our of debt in 3 years instead of 10.

    1. Baby Boomer Super Saver, you are out of touch with the times. Unlike your generation, where a high school diploma could get you on a decent paying career path to support yourself and a family, current generations MUST pursue higher education in order to succeed in today’s world. Also, the cost of higher education has significantly increased since your time. I agree getting out of debt is the simple solution, but unless you know of any “side hustles” that make 100k per year your solution is far from attainable. Perhaps El Chapo is hiring?

  4. To baby boomer super saver, did you have 6-figure student debt and successfully pay it off in 10 years? Did you do so working an underpaid job and supporting a family or even yourself? I say “underpaid” instead of “low-paying” because there are many jobs in which the work demands expertise and hard work and dedication and an advanced degree in a very specific field–and still pays a very low salary or wages. Not everyone who struggles is some dead beat who doesn’t understand how money works. And someone who racks up that much debt does so because Mom and Dad were not the Warbuckses, they entered college at a time when good schools were charging +/-$30,000/year, and they needed to get an advanced degree to enter their field. But thanks for the advice?

  5. This is the most straightforward and concise article I’ve found about PSLF. If only the federal government and the student loan lenders could make their information so clear! I’m doing all these things and planning to apply for forgiveness in about 5 years. You are totally right about making sure every detail is accurate. I had my employment certification form denied this year because my supervisor forgot to write her title on the form. I’m wondering if small details like this led to so many people being denied this year. Luckily, I can just resubmit the form. And I agree with T above. I’m not seeking forgiveness because I’m a freeloader or an idiot with money. I am passionate about my career in social work and I couldn’t have done it without this program.

    1. Thanks Rachel! I wish I didn’t feel so cynical about it, but it’s obviously in the gov’t/loan servicer’s best interest (pardon the pun) to not make the information very clear. I think you are exactly right– those small details prevented thousands of people from qualifying for PSLF this go around. I’m hoping we see improvements in that number as applicants become more educated and (dreaming big here) the federal govt is more clear about how to make sure applications qualify. Good luck with your application! Sounds like you are on the right track as you’ve educated yourself. Grateful for social workers like you!

  6. Hi I really liked your post, though I can’t really click on the link to call Travis… lol do you have an email you can share with me?


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