Public Service Loan Forgiveness (PSLF) was created in 2007 in order to help people who choose to work for certain types of employers with their student loans. Federal/State/Local government employees, 501(c)3 employees, and a handful of other kinds of not-for-profit employers qualify for their employees to take advantage of this program. PSLF is straightforward. It requires that you work full-time for a qualifying employer for 10 years while making 120 on-time monthly payments in order to have your remaining student loans forgiven without any further tax consequences.
Since the program was enacted in 2007, this means the first forgiveness applications are beginning to roll in for processing, and things aren’t going well. Fewer than 100 applications out of over 28,000 were found to have met the requirements for forgiveness! What gives? Is the PSLF program something that you should be counting on going forward? Or, should you resolve to pay your loans in their entirety?
Damian is the lead Financial Concierge on Your Money Line, the financial help line serving all Pete the Planner® Financial Wellness clients. Damian is a CERTIFIED FINANCIAL PLANNER™ professional and loves answering your money questions. Despite sharing a last name and sense of humor, Damian and Pete are not related.