March 13, 2009
Student Loan Forgivenes as of Feb. 2009
Last month, the federal Dept. of Education released new guidelines about qualifying for Public Service student loan forgiveness program.
- The borrower must not be in default on the loans for which forgiveness is requested.
- The borrower must be employed full time by a public service organization –
- When making the required 120 monthly loan payments (certain repayment conditions apply – see below);
- At the time the borrower applies for loan forgiveness; and
- At the time the remaining balance on the borrower’s eligible loans is forgiven.
loan repayment requirements:
- The borrower must have made 120 separate monthly payments beginning after October 1, 2007 on the Direct Loan Program loans for which forgiveness is requested. Earlier payments do not count toward meeting this requirement. Each of the 120 monthly payments must be made for the full scheduled installment amount within 15 days of the due date
- The 120 required payments must be made under one or more of the following Direct Loan Program repayment plans–
- Income Based Repayment (IBR) Plan (not available to parent Direct PLUS Loan borrowers)
- Income Contingent Repayment Plan (not available to parent Direct PLUS Loan borrowers)
- Standard Repayment Plan with a 10-year repayment period
- Any other Direct Loan Program repayment plan, but only payments that are at least equal to the monthly payment amount that would have been required under the Standard Repayment Plan with a 10-year repayment period may be counted toward the required 120 payments.
The borrower must be employed full time (in any position) by a public service organization, or must be serving in a full-time AmeriCorps or Peace Corps position. For purposes of the Public Service Loan Forgiveness Program, the term “public service organization” means –
- A federal, state, local, or Tribal government organization, agency, or entity (includes most public schools, colleges anduniversities);
- A public child or family service agency;
- A non-profit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code (includes most not-for-profit private schools, colleges, and universities);
- A Tribal college or university; or
- A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services –
- Emergency management;
- Military service;
- Public safety;
- Law enforcement;
- Public interest law services;
- Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten);
- Public service for individuals with disabilities and the elderly;
- Public health (including nurses, nurse practioners, nurses in a clinical setting, and full-time professionals engaged in health care practioner occupations and health care support occupations);
- Public education;
- Public library services; and
- School library or other school-based services.