4 secrets to ensuring you meet the qualification requirements for Public Service Loan Forgiveness (PSLF) as a nurse or medical technician.
Pubic Service Loan Forgiveness (PSLF) is a government program that offers a path to federal student loan forgiveness for public servants. This can include nurses and other medical technicians that work in the public sector. If you work for a city, municipal or county hospital, there’s a strong chance you can qualify for student loan forgiveness… if you qualify correctly.
The instructions below offer guidance on how to meet four critical criteria for PSLF qualification as a nurse. You can learn more about loan forgiveness, in general, through Debt.com’s main information page for PSLF.
Secret to Qualifying #1:You must have the right types of loans to enroll in the right federal repayment plan
PSLF only applies to federal student loans taken out through either the Federal Direct or FFEL student loan program. You can also include Stafford and even Perkins loans if you consolidate them with your other Direct or FFEL debts. In other words, you may need to consolidate using something like a Federal Direct Consolidation Loan first.
Once you have your loans consolidated, you must enroll in a federal hardship-based student loan repayment plan. You have three options:
- Income Based Repayment (IBR)
- Income Contingent Repayment (ICR)
- Pay as You Earn (PayE)
These programs match your student loan payments to your income level and family size. This makes it easier to keep up with the payments even on a limited budget. To qualify, your Adjusted Gross Income (AGI) must be no more than 150% of the Federal Poverty Line (FPL) in your state for your family size.
As you can see, there are several gateways you must pass through to even become eligible for PSLF. You must at least enroll in one of the hardship-based repayment plans. In some cases, you may need to consolidate first to ensure all your debts qualify for forgiveness.
And the hoops don’t stop there…
Secret to Qualifying #2: You must be employed in the public service sector
Public Service Loan Forgiveness only applies if you work in the public sector. If you work as a Registered Nurse at the local county hospital, you most likely qualify. However, an RN who works at a private nursing home facility would not qualify because it’s a private company.
If you’re unsure if you work in a position that qualifies forgiveness, fill out the Employment Certification Form through StudentAid.gov. This can help you certify that your employment qualifies. It’s recommended that you should re-certify each year or at least anytime you change jobs. This gives you the best assurance that you will qualify for PSLF after all this work.
Note: The Department of Education does not require annual certification for you to qualify for forgiveness. If you have faith that your employment qualifies, you can skip certification if you really want to do so. It’s just not recommended.
Secret to Qualifying #3: If you do everything right, the federal government will forgive your balances after 120 qualified payments
That’s right. If you do everything right and start immediately, the earliest you will qualify for PSLF will be in 10 years. You must make 120 qualified payments to the federal repayment plan you choose. You can even switch to a different hardship-based repayment plan, as long as you stay in one of the programs listed above.
So, if you enroll in an IBR and then decide to switch to PayE because your payments are still too high, you still qualify for PSLF and the clock doesn’t reset. Continue making payments and after 120 you can officially apply for PSLF.
During that time, you can also switch jobs, but you must maintain employment in the public sector. Again, your safest bet is to re-certify your new position through the Employment Certification form.
It’s also important to note that “qualified payment” can mean a few things. It primarily refers to a scheduled payment that you make on time. However, in some cases depending on your repayment plan, you may also qualify to not make a payment.
For example, let’s say you enroll in PayE. If your income is 75% or less than the FPL in your state, your payments may be reduced or eliminated. You pay $0, but the federal government credits that you made a qualified payment. Your balances don’t change, but you avoid penalties and maintain eligibility for PSLF. This usually only happens on PayE. Payments that you miss during forbearance or deferment do not count as qualified payments. To say the least, it’s complicated.
Secret to qualifying #4: All the rules listed above could change if the DOE decides to amend or cancel PSLF entirely
The final secret to qualifying for PSLF is also the most startling… and troubling. PSLF is a government relief program – some would say an “entitlement” program. That means that the program is subject to change by the federal government. The current administration, spearheaded by Betsy DeVos, may adjust the rules for Public Service Loan Forgiveness. They may also decide to cancel the program entirely.
Under the previous administration, the DOE under President Obama expanded PSLF to make more people eligible for forgiveness. That’s why PSLF is often called “Obama Student Loan Forgiveness” even though the program originated under President Bush in 2007. In fact, as you can see, the first nurses to qualify for PSLF would do so this year in 2017. The first nurses who started the process back in 2007 should receive forgiveness around October.
There is already some concern that nurses and other public service professional who thought they would qualify may not. If the rules change, then even ongoing Employment Certification may not prevent rejection for forgiveness. Public professional are holding their breath this year in the hopes of seeing their colleagues qualify for forgiveness. Once the first loans get forgiven, everyone may breathe easier.
Still, this shows how critical it is to be proactive and get into these programs as soon as possible. In general, if you enroll in a program prior to a regulation adjustment, you often still qualify under the old rules. But if you apply the day after the rules change, you may be out of luck. This means it’s essential to enroll in a hardship-based repayment plan quickly and apply for employment certification. It’s your best chance to ensure you can receive federal student loan forgiveness.