FAQ’s

The Student Loan Forgiveness F.A.Q.

Use our free FAQ below to get answers to all of your forgiveness questions. If you have additional questions feel free to schedule a free consult below:

Let's Talk

What employers are eligible?
Any U.S. federal, state, local, or tribal government agency is considered a government employer for the PSLF Program. This includes employers such as the U.S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts (including entities such as public transportation, water, bridge district, or housing authorities). Or an organization that is tax-exempt under section 501(c)(3) of the Internal Revenue Code.
What non-profits are not eligible?
If the organization is a labor union or a partisan political organization, it isn’t an eligible PSLF employer. In addition, if you perform religious activities as part of your job, there are limitations on your ability to have your employment qualify for PSLF.
How many hours do I have to work at a Qualified Employer?
You must be employed full-time with a Qualified Employer while making payments on your student loans. Full-time employment for Public Service Loan Forgiveness is defined using your employer's definition of full-time employment and at least 30 hours per week.
If you are employed by more than one Qualified Employer, you must be employed a total of at least 30 hours while making payments on an Income Driven Repayment plan.
Are the loans that are forgiven in PSLF taxable?
No.
Is the loan amount forgiven at the completion of PSLF taxable?
No.
Is there an income limit for PSLF?
No.
Is there a cap on the total amount forgiven tax free?
No.
I do not work during the summer. Does that count?
Yes. If you have a contract for at least 8 months of the year and the employer considers you full-time and average at least 30 hours a week during the contract period.
I work for a charter school. Is that a Qualified Employer?
If the school is a non-profit, then yes. However, some charter schools have a component of for-profit such as a management company for their payroll function. If you are paid by the for-profit part of the company, then no. Check with your treasurer or HR professional.
I work for a hospital run by a for-profit management company. Is that a Qualified Employer?
If the hospital is 100% non-profit, then yes. However, some hospitals have a component of for-profit such as a management company or their payroll function. If you are paid by the for-profit part of the company, then no. Check with your treasurer or HR professional.
What if I quit or lose my job?
Your PSLF Qualifying Payment eligibility is paused until you are re-employed. You do not lose any previous qualified payments.
What if I work two part-time jobs at two Qualified Employers?
If each employer certifies employment and the average combined hours worked is 30 hours or greater, then yes.
What if I change jobs to another Qualified Employer?
The past employer(s) must complete the second half of the federal Employment Certification form and you submit the first two pages of the form to FedLoan per the instructions on the form. (Note if your loans area not already at FedLoan, then this action will cause them to be transferred there.)
Does my employment qualify for PSLF if I am working out of the country?
If you work for a US based Qualified Employer, then yes.
What if I start working in the for-profit sector full time?
You are not eligible for PSLF unless you are working for a qualifying non-profit employer. PSLF is a serious 10 year commitment and not finishing the program could potentially make your loan balance higher than when you started. This happens because while you are on an Income Driven Repayment plan you could be paying less than the minimum amount which doesn’t cover some or all the interest. Once you leave the Income Driven Repayment plan that interest will capitalize and add to your principal balance, which then makes your monthly loan payment higher.
You can always go back to a Qualifying Employer as you do not lose your past qualifying payments and the interest that was capitalized during the time you left will be forgiven at the end of PSLF.
How do I know if I am enrolled in an Income Driven Repayment plan correctly? (e.g. on the best IDR plan, all loan types qualify for forgiveness, and all my loans are included)?
Determine your eligibility and which plan best fits your situation by using the parameters above. For a loan to be eligible for forgiveness it must say “Direct”. Private loans are not eligible for forgiveness and FFEL and Perkins loans are not eligible for forgiveness unless they are consolidated into a Direct loan. In order to be sure that all of your Qualifying loans are in your IDR add them all up and make sure that is the same total of all IDR loans combined.
What are the factors that drive my Income Driven Payment?
• Adjusted Gross Income:
\t◦ An increase in income will increase the income driven payment amount and a decrease in income will decrease the income driven payment amount. The effect of the change in income may not be dramatic based on the other factors.
• Household size:
\t◦ Each additional member of the Household removes about $6,600 from your adjusted gross income.
\t◦ Household count rules differ between the IRS and PSLF. Regarding dependents, if you are paying greater than 50% of a household member’s financial support, they are eligible to be a household member.
• Pre-tax Deductions:
\t◦ 403b & 457 retirement savings, Tax Sheltered Annuities and Health Savings Accounts all lower adjusted gross income.
What repayment plans do not qualify?
• Extended repayment
• Graduated extended repayment
• Standard Consolidation
What loan types qualify for PSLF?
• Direct Stafford, subsidized and unsubsidized
• Direct Consolidation (Cannot contain a Parent Plus loan unless ICR is chosen)
• Direct Grad Plus
Should I include my Perkins in PSLF?
You will want to consider pursuing Perkins forgiveness if eligible under Perkins loan forgiveness guidelines. The consideration should include the length of time left for full Perkins forgiveness. Contact your Perkins servicer for more information. If ineligible for Perkins forgiveness, then it could make sense to consolidate to make it PSLF eligible. The Perkins is serviced by your school or a servicer the school contracts it with.
What loans never qualify?
Non federally insured loans such as Private student loans, State student loans, and student loans issued by your college of attendance.
Can my spouse’s loans be combined with mine?
No, not in the federal loan program.
Can I get the Parent Plus loans that my parents took out for me into my name?
No, not in the federal loan program.
What if my loans need to be consolidated in order to be make them eligible?
If possible, it might make sense depending on your situation to only consolidate what is needed in order to make them eligible.
How do I enroll in an Income Driven Repayment plan?
1. Go to: https://studentaid.gov/
2. Manage Loans
3. Lower My Payments
4. Apply for an Income-Driven Repayment plan
5. Choose the correct form (new applicant vs. returning)
6. Fill out the application as accurately as possible
7. When using the IRS Data Retrieval Tool, you must fill out your information exactly as it is shown on your most recent 1040.
Why won’t the IRS Data Retrieval Tool work for me?
The most common reason the IRS Data Retrieval Tool does not work is when the exact address or wrong address is used when filling it out. When filling out your address you need to reference your most recent federal tax return and copy the information EXACTLY as it is stated. Another reason is a freeze has been put on the IRS file by yourself or the IRS. If you cannot get the Data Retrieval Tool to work you are able to upload the first two pages of your most recent 1040 to your current loan servicer after you have filled out the remainder of the application.
What if my Income Driven payment is $0? Does that count and how do I make a $0 payment?
Yes. The $0 payment counts towards PSLF. The loan servicer will recognize the $0 and continue to bill $0 until it is time to re-certify your Income Driven Repayment plan.
Can I pay extra each month to speed up the 120 payments?
No. For a payment to count as a Qualified Payment towards the 120 payments, you must pay the exact amount (to the penny) of the disclosed Income Driven monthly payment amount.
What if I miss a payment?
If you miss or are late on a payment it does not count towards the 120 qualified payments. Payments made within 15 days, before or after the scheduled due date, count.
What will happen to my PSLF payments if I go on Maternity/Paternity Leave?
If you qualify for Family Medical Leave (FMLA your payments will be qualifying for PSLF. Some employers do it that way and others look at maternity leave as a leave of absence. Please check with your employer to know for sure.
What if I want to take a break from working during PSLF?
The 120 payments do not need to be consecutive. After returning to PSLF, you will need to re-enroll in an Income Drive Repayment plan and continue working at a Qualified Employer.
I just consolidated my loans and now I am receiving multiple emails from my servicer regarding my payment amount.
While filling out the consolidation application you should have also filled out an Income Driven Repayment plan application. When an Income Driven Repayment application is first being processed the servicing system first calculates and discloses the 10-Year Standard payment before the Income Driven Repayment payment is calculated and disclosed.
Why does my spouse have to go through the income certification process?
The IRS wants a full family picture, so it is mandatory. If the spouse will not go through the process you will lose that family member in your household size and will lose about $6,600 that the spousal deduction takes off your adjusted gross income (Which may impact your loan payment amount).
Does my spouse have any legal or financial responsibilities for my student loans?
No.
What if I am separated, and/or getting divorced and my spouse will not do their part of the income certification?
If the spouse will not go through the process you will lose that family member in your household size and will lose about $6,600 that the spousal deduction takes off your adjusted gross income. The spouse income is not included in the calculation for the IDR as well.
What is Re-certification?
Recertification is an annual and mandatory process in the Public Service Loan Forgiveness program. After the initial enrollment, you must recertify your Income Driven Repayment plan every year. During this process you are providing your proof of income by using the Dept of Education’s IRS Data Retrieval Tool, which references your most recent federal tax return that is on file with the IRS. You are able to re-certify your Income Driven Repayment plan up to 90 days before the anniversary date.
What if I miss my Re-certification date?
If you miss your recertification date, you have about one month before your payment plan is changed to the 10-Year Standard payment or the Alternative Post REPAYE plan, which results in a payment that could be higher than what you were paying on an Income Driven Repayment plan. Payments made on the 10-Year Standard payment plan still count as qualified payments towards the 120, but do not earn any additional forgiveness.
What is Employment Certification?
Employment certification is exactly what it sounds like. You are certifying that 1. your employer is an eligible non-profit or government agency and 2. that you are a legitimate employee that works 30+ hours a week at the employer and 3. counting all of the qualified payments made while working for that employer. Once you submit your first Employment Certification form to FedLoan Servicing, it will result in your all your eligible federal loans being transferred from your current servicer to FedLoan Servicing. The transfer of loans happens because FedLoan Servicing is the only loan servicer that is designated by the US Dept of Education and set up to support the entire process of Public Service Loan Forgiveness. After the initial Employment Certification form is accepted and verified and all the loans are transferred, every Employment Certification after that can be uploaded directly to the FedLoan website.
Who completes my federal Employment Certification form?
You will fill out the first page and your employer, usually the HR department or the assistant principal, will fill out the second page. Always check the second page and confirm your employer filled out the required sections with accurate information, especially concerning their governmental or non-profit status, before sending to FedLoan Servicing. The start date has to be in a MM/DD/YYYY format.
What is NSLDS?
National Student Loan Data System that the federal government set up. This is a downloadable text file with all the information pertaining to your federal loans.
How do I view my NSLDS report?
Go to NSLDS.Ed.Gov, login with your FSA ID and follow the instructions on how to download the text file.
When is the best time to enroll in an Income Driven Repayment plan?
After you have completed all schooling. If you start making qualified payments on your under grad loans and then start making payments on your grad loans later, you will have, for example, 10/120 qualified payments on your undergrad loans and 0/120 payments on your grad loans so you will start from the beginning on every new loan you take out. In the end you end up making more payments than you should. This is called two streams of repayment.
How do I document my income if it has significantly decreased and my most recent federal tax return does not reflect that?
You will use what is called Alternative Documentation. After you submit an Income Driven Repayment application on Studentaid.gov you will go to your loan servicer(s) site and upload an image of your most recent paystub making sure the number of pay periods per year is listed and any pre-tax deductions are clearly marked as such.
What is the authoritative income document for PSLF?
The Adjusted Gross Income from the federal tax return. Alternative Documentation can be used when federal tax information is not available or in times of losses in income.
What if I have not filed taxes in the last 2 years?
That is OK. You will use what is called Alternative Documentation. After you submit an Income Driven Repayment application on Studentaid.gov you will go to your loan servicer(s) site and upload an image of your most recent paystub making sure the number of pay periods per year is listed and any pre-tax deductions are clearly marked as such. The same process is used when there is a significant decrease in income.
What if I declared bankruptcy in the past?
If your loans are not currently in default, then any prior bankruptcy does not matter.
What am I capable of doing on Studentaid.gov vs. my loan servicer’s website?
Enrolling in Income Driven Repayment plans, re-certification of Income Driven Repayment plans and loan consolidation. On the servicer website you can request forbearances, check the status of your loans, check your payment amount and ask your servicer any questions regarding your loans. Studentaid.gov communicates directly with your loan servicer for Income Driven Repayment and consolidation activities.
To download your NSLDS you can go to: https://nslds.ed.gov/nslds/nslds_SA/ (which can also be accessed through the studentaid.gov website).
Can I waive my in-school deferment loan status in order to start making qualified payments on an Income Driven Repayment plan?
Yes.
Can I waive my Grace Period loan status in order to start making qualified payments on an Income Driven Repayment plan?
The only way to waive Grace Period loan status is by consolidating all your federal loans that are in Grace Period.
Can my loan servicer(s) change?
Yes, unless you are already with FedLoan Servicing. Otherwise, when the first Employment Certification is filed your loans will be transferred to FedLoan Servicing where they will remain for the remainder of the Public Service Loan Forgiveness program. *Note: the loan terms remain the same regardless of which servicer has your loans.
What if I have my own student loans and Parent Plus loans for my kid(s)?
You are looking at two different Income Driven Repayment plans; Income Contingent Repayment plan (ICR) for the Parent Plus loans (after they are consolidated) and whatever Income Driven Repayment plan is best that you qualify for.
I have high interest rate, inflexible, Private loans what can be done about those?
This is one of the most financial beneficial strategies that we utilize but it is a bit complicated for this knowledgebase.
What if I have more than one loan servicer?
It is OK. The situation does not increase your monthly payment amount. If you would like one servicer you can consolidate the loans to one servicer, but only if you have not started making any qualified payments. You can also wait to file your Employment Certification form, which will result in all your federal loans being transferred to FedLoan Servicing.
Can I pursue Teacher Loan Forgiveness (TLF) at the same time as PSLF?
Yes, but the payment you make towards your student loans will not count towards PSLF. It might make sense to focus on PSLF and not do TLF if your loan forgiveness eligibility is much greater than The Teacher Loan Forgiveness amount.
What if I am almost done with a 5-year Teacher Loan Forgiveness plan?
Finish the requirements of Teacher Loan Forgiveness and if it makes sense for you to pursue Public Service Loan Forgiveness, in regard to the loan balance that will be forgiven, then you should pursue PSLF after TLF.
I understand comparing the 10-Year Standard monthly payment to my Income Driven Repayment payment in order to learn about forgiveness possibilities. What if my only goal is to have the lowest possible monthly payment that I can afford?
Best way to evaluate the next best alternative is to take the Income Drive Repayment payment and compare it to the Graduated loan consolidation payment first. Then compare it to Extended Graduated payment. If the Income Driven Repayment is lower, then the comparison is a no brainer. If Income Driven Repayment is higher continue the comparison. Take the monthly payment amount of the Extended or Graduated payment and calculate how much more you will pay, as compared to the Income Driven Repayment over 120 payments. Hold that number. Then calculate the payment sums made after the 120 payment for the remainder of the Extended or Graduated term. Subtract the higher number from the lower and this is the overall savings of going with the Income Driven Repayment plan. Is it enough to make the Forgiveness plan worth it?
My significant other lives with me. Can I claim them as a Household member?
Yes, if you provide over 50% of their financial support and can prove it.
My child’s significant other lives in my house. Can I claim them as a Household member?
Yes, if you provide over 50% of their financial support and can prove it.
Is it 10-years or 120 payments?
120 payments.
What happens if I die?
At death outstanding debt is forgiven.
What if I become disabled?
If you are permanently disabled and unable to work per a doctor's orders, your federal loans will be forgiven.
Should I keep records of everything?
Yes. Be prepared to recreate the whole timeline just in case your forgiveness is denied; each completed Employment Certification, each Recertification, each repayment schedule and a full history of all payments made.
I just made my 120th Qualified Payment. What do I do now?
You will need to submit a final Public Service Loan Forgiveness form titled: Application for Forgiveness. On the form it will give you an option to check a box saying that you DO NOT want a forbearance while your application is being processed. Make sure you check that box, continue working and making your scheduled Qualified Payments until your application is processed. When the process is complete you will receive notice that your loans have been forgiven and all loan balances should be $0. Any payments made after the 120th payment will be returned to you.
What if I live in a Community Property state that does not allow me to file my federal taxes Married Filing Separate?
Check with legal or tax counsel in your state.
When does it makes sense to change plans before Recertification?
This is called Early Recalculation and is a strategy that should be used when there is:
• A large decrease in income
• Separation or divorce
• Pregnancy
Can I be certain that PSLF will be around when I make my 120th payment?
There is no guarantee, but the Promissory Note that you signed when you received the loans outlines the eligibility for Public Service Loan Forgiveness. It is a written contract with the federal government. If Congress breaks the contract it will do so for tens of millions of people.

The Student Loan Refinancing F.A.Q.

Use our free FAQ below to get answers to all of your refinancing questions. If you have additional questions feel free to schedule a free consult below:

Let's Talk

Is there a fee to refinance my loans?
No.
How much can I lower my interest rate?
On average, interest rates can be lowered by 2-3%. It will depend on your credit score and debt to income ratio.
How does lowering my interest rate save me money?
Less interest accrues each month, so you save money.
What factors determine my creditworthiness and interest rate?
History of repaying current debts.
• Length of time at your current residence.
• Debt to income ratio.
• Level of education.
Can I refinance federal loans and private loans together?
Yes.
Are variable rate loans offered?
Yes, both fixed and variable.
What are the lengths of the loans?
Anywhere from 5-25 years. The shorter the term the lower the interest rate.
Why do shorter length loans have lower interest rates?
Lenders feel that there is less risk the shorter the loan period.
Is the Interest I pay on my private student loans tax deductible?
Yes, the lender will provide you with an annual 1098-E tax form.
Who will service my new private loan?
Various lenders compete for your business based on credit profile. Once a lender has been chosen, the loan repayment information, including loan servicer, will be communicated to you.
Who do I contact regarding questions about my new private loan?
The new lender will reach out and communicate the contact and loan payment information.
Can a cosigner be added to lower the interest rate?
Yes, if the cosigner creditworthiness is better than the borrower.
When will the loan terms be disclosed?
Before you accept the loan.
Can the monthly due date be adjusted to line up with my pay period?
Yes, depending on your lender.
How is loan amount of my refinance calculated?
The lender reaches out to each loan holder that you have identified for the loan refinance to obtain the payoff amount including principal and interest. All the payoff amounts are added up and become the new loan principal balance.
Is there a right of recission period after I refinance my loans?
Yes, 3 business days after the final loan disclosure.
Can I consolidate with my spouse’s loans?
No.
Is there an in-school deferment option if I go back to school?
Typically, yes if you are enrolled in school more than half time, but interest continues to accrue.
Is there a type of loan deferral if I experience financial hardship?
That is at the lender’s discretion
Is there a grace period for newly refinanced loans?
No.
If I have a co-signer is there a process for removing them from the loan?
Typically, 12 months of on-time payments will need to be made and then credit underwriting.
What happens to my private loans if I die?
Private student loans are not forgivable. The lender will attempt to collect from the estate. There are some lenders that do provide loan forgiveness at death. Reach out to us to discuss.
What happens to my private loans if I become permanently disabled?
You can pay for disability insurance when you are obtaining the loan.
Are there late fees? If so, when and what amount?
Yes, 20% of the accrued interest for the month.
Can I set up Auto Pay and is there a discount if I do so?
Yes, most lenders provide a .25% interest rate reduction.
Can a private loan be refinanced or consolidated into a federal loan?
No.
Can I refinance a federal Parent Plus loan that my parents borrowed for me, into my name?
Yes.