PSLF provides student debt relief to firefighters struggling to repay federal student loans.
In most cases, city fire departments do not require education beyond a high school diploma or GED. However, if you want to advance or have a goal to become chief, you may need a higher education .
But there’s a catch. The debt you incur for a degree can easily outstrip the income you receive as a firefighter. Even with the income boost of a higher education, you can struggle to pay off your debt. Student loan payments can keep you living paycheck to paycheck. Meanwhile. the debt prevents you from accomplishing other life goals, like homeownership.
Fact: The 2017 salary range for firefighters ranges from $33,528 to $55,879, according to Salary.com.
Fact: 68% of for-profit and nonprofit college graduates have student loan debt, with an average balance of $30,100*
The unintended trap of student loans
The Department of Education designed federal student loans so its easy to qualify. Qualification is not based on your credit; it’s based need. But that means your debt-to-income ratio does not factor in during loan approval.
So, unlike a regular loan, you can get a federal student loan even if you don’t (and won’t) have the income to pay it back. Given the current cost of tuition and attending school, you simply may not make enough money to repay your loans.
That’s especially true for anyone who works in the public service sector, like a firefighter. Cities and municipalities usually employ firefighters, so the income can be modest. You don’t do what you do for a huge paycheck.
Still, that’s a problem if you took out student loans to advance your career as a firefighter. Luckily, Public Service Loan Forgiveness (PSLF) offers a solution to help you get out from under your student loan debt burden.
True or false: The majority of fire departments require EMT training if you want to be a paid employee of the department.
Tip: Roughly 70% of fire departments require EMT training.
How Student Loan Forgiveness for Firefighters Works
Qualification for PSLF is not immediate. You have to take a number of steps first. If you start now and follow the steps below, you would be eligible for loan forgiveness in 10 years.
- First you must enroll in a hardship based federal repayment plan.
- It’s also recommend that you complete the Employment Certification Form and submit to certify your employment eligibility for PSLF.
- You then make 120 qualified payments to your repayment plan; you can change plans as long as you maintain enrollment in the three programs above.
- During that time, you should re-certify your employment annually or anytime you change jobs. This ensures you continue to work for a department that qualifies you for PSLF.
- After 120 payments (10 years) you apply for PSLF. Once approved, the federal government forgives the remaining balances on all federal student loans included in your repayment plan.
Maintaining eligibility for PSLF
As you can see from the instructions above, qualifying for loan forgiveness all depends on maintaining eligibility. You must meet the qualification for forgiveness throughout the ten years of repayment. This can be challenging.
- You can’t move out of the public service sector. Firefighters usually qualify for PSLF because city and municipal employment counts as public service. However, you can’t switch careers, work for a company and still get your loans forgiven
- You must make ALL qualified payments during the 10-year term. It’s important to note if you enroll in PayE and your income is especially low, some payments may be waived. This counts as making a qualified payment.
Employment certification is not a requirement to qualify for forgiveness through PSLF. However, the Department of Education through StudentAid.gov recommends getting certified early and maintaining it. It’s the only way to affirm you can earn forgiveness in 10 years.
Important Warnings about 2017 Loan Forgiveness
People often think Public Service Loan Forgiveness is Obama Student Loan Forgiveness. In fact, the Department of Education created and implemented PSLF under George W. Bush. The program started back in 2007.
Interestingly enough, that means the first loans the government will forgive should happen this year. If you’ve been a firefighter since 2007 and met all your eligibility requirements, you may be looking forward to forgiveness… finally.
However, we must note that PSLF is a federal program. As a result, it is subject to change by the Department of Education. The program can also be ended entirely. Some people consider it to be an entitlement program. As such, it’s possible that the current DOE headed by Betsy DeVos may alter loan forgiveness as it exists today.
What does this mean for your chances of forgiveness?
By design, qualifying for PSLF is a process 10-years in the making when it finally happens. Even before that, the DOE also controls the federal repayment plans. That means the IBR, ICR and PayE programs may change, too.
The good news is that program changes and end dates often don’t affect those already enrolled. For instance, HAMP is a federal mortgage relief program that ended in January of 2017. If you started your application by December 31, 2016, you could still qualify, You just couldn’t apply after January 1.
This means you need to act as quickly as possible. The further along you are in the process, the better your chances of staying in the program under the old rules. Enroll in a hardship repayment program that works for your budget. Receive certification that you work in a qualified employment position. Keep that certification up. This maximizes your chances for forgiveness.