How does the public service loan forgiveness work

The Public Service Loan Forgiveness Program forgives what is left on your loan after you have made 120 monthly payments. You have to use a Direct Loan for this and be under a qualifying repayment plan. That means if you make payments every month, in 10 years, you are qualified for the Public Service Loan Forgiveness Program. You also must be working under a qualified employer and be working full-time. This program helps public employees that are in high-demand careers stay on the job and remove student debt.

What Public Service Employers Qualify?

federal, state, local, or tribal government organizations




A 501(c)(3) nonprofit

A not-for-profit that’s not 501(c)(3)-designated but meets other requirements related to public service.

AmeriCorps (in a full-time capacity) 

Peace Corps

Others serving communities

Waiver Change 2021-2022:

In October 2021, a waiver was introduced to help students count all payments from any repayment plan toward PSLF eligibility. It gives borrowers credit for any payments on any loan, and the waiver only runs through October 31, 2022

Loans eligible for PSLF

  • Federal direct/Stafford loans (subsidized)
  • Federal direct/Stafford loans (unsubsidized)
  • Federal direct PLUS loans
  • Federal direct consolidation loans

Loans not eligible for PSLF

Perkins loans

Federal Family Education Loans (FFEL)

The payment plans that qualify are:

Revised Pay As You Earn (REPAYE)

Pay As You Earn (PAYE)

Income-Based Repayment (IBR)

Income-Contingent Repayment (ICR)

Always consider how much student loans you will have left for forgiveness after 10 years of payments. This program works best if you have a high loan balance compared to your salary. If your loan balance is low, or your pay is high enough, then you may have already paid off most or even all of your loans in 10 years.

Other Loan Forgiveness programs:

Income-driven repayment forgiveness. Once you apply for an income-driven repayment plan your payments are capped based on your income. At the end of the repayment terms any balance that isn’t paid is forgiven automatically.

Teacher Loan Forgiveness. If you are a teacher who has been employed full-time for five years in a low-income public elementary or secondary school you may be eligible for Teacher Loan Forgiveness.

Student loan forgiveness for nurses. Nurses may qualify for Public Service Loan Forgiveness, Perkins Loan cancellation and the NURSE Corps Loan Repayment Program. Some of these are highly competitive but they may help to pay a large portion of unpaid loans.

State-sponsored repayment assistance programs. There are state programs that can help professionals with a small portion of their debt. Each state’s requirements vary.

Military student loan forgiveness and assistance. Military personnel in the Army, Navy, Air Force, National Guard and Coast Guard may qualify for their own programs. Contact your military Loan Repayment Program.

Perkins Loan cancellation. If a person works in a public service job for five years a percentage of the loan is paid off each year.