A charter school qualifies for the Public Service Loan Forgiveness program if it is a qualified employer. A qualified employer for the purposes of the PSLF program is an employer that's either a government (e.g., a public charter school) or a nonprofit entity (e.g., 501(c)(3) private school).
The easiest way to find out your school's status is to ask your human resources department. If your school qualifies, you'll still need to meet the other program requirements:
- work full-time
- make 120 qualifying payments
- make the loan payments under a qualifying repayment plan and
- have Direct Loans (a Direct Loan is the only type of federal student loan that qualifies for the PSLF program).
If your school doesn't qualify, then you'll want to look into other student loan forgiveness programs the US Department of Education offers (e.g., Teacher Loan Forgiveness program).
In the next section, we'll review the PSLF eligibility requirements you can al.
But before we do that, let's talk quickly about applying for the PSLF program.
Technically, you don't have to apply for the Public Service Loan Forgiveness program until you make your 120th payment.
Until then, the one thing you should do annually is complete the Employment Certification Form. This form proves to your loan servicer that you spent the past year working full-time at a qualified employer.
With my clients, I typically send this form and the income-driven repayment plan each year.
You're considered full-time if either your charter school considers you to be a full-time or you average at least 30hrs per week on average.
What are qualifying payments?
A qualifying payment is a payment made within 15 days of the due date.
You can make your monthly payment up to 15 days early or 15 days late and still get credit as a qualifying payment.
I've seen borrowers not get credit from their loan servicer, FedLoan Servicing, because they paid by check and the check didn't post to their account until 15 days after the due date. Because of this, I urge you to look into setting your payments up on autopay.
What plans qualify?
Not all of the student loan repayment plans offered by the Department of Education meet the PSLF program's eligibility requirements.
This requirement was a big reason why many teachers had their applications for forgiveness denied.
For years, they had been paying their loans under the wrong repayment plan.
If your application was denied because you made your payments under the wrong plan, reapply for forgiveness. But this time, submit the Temporary Expanded Public Service Loan Forgiveness application. The federal government created the TEPSLF program specifically to help school teachers like you get student loan debt forgiven.
Only the monthly payments you make under an income-driven repayment plan count towards the 120 payments you need to get your Direct Loan balance forgiven.
You don't have to make the loan payments consecutively. So if you miss a month because you were in a deferment, that's okay. You could also miss several years and not worry about getting kicked out of the program.
The only thing that matters (at least in terms of payment) is that you make 120 qualifying payments.
What loans qualify?
Only Direct Loans qualify for PSLF forgiveness. This includes Direct Consolidation loans and Direct Subsidized and Unsubsidized loans.
If you borrowed most of your student loan debt before 2010, you might have some federal loans that aren't Direct Loans.
You may have:
- Federal Family Education Loans (FFEL)
- Federal Stafford Loans and
- Perkins Loans
Loans made under those loan programs don't qualify. To get them to qualify, you have to consolidate them into a Direct Consolidation Loan.
Be careful about doing this. You typically don't want to consolidate these with your other Direct Loans. If you do, you'll lose the forgiveness you've already earned towards the Direct Loan.
You can consolidate your federal student loans for free at studentaid.gov.
Other loan forgiveness options
If your charter school isn't a public school or a qualifying nonprofit employer, then you still have two options to get your federal student debt. Both the Teacher Loan Forgiveness Program and the Income-Driven Repayment plan you're in will forgive your federal student loan debt.
Teacher Loan Forgiveness eligibility
This program offers elementary school teachers, special education teachers, and secondary school teachers of mathematics or science up to $17,500 in loan forgiveness.
To qualify for this program, you must be a highly qualified teacher that teaches full-time for 5 complete and consecutive years at a qualifying school.
Search this teacher loan forgiveness school list (aka, Teacher Cancellation Low Income (TCLI) Directory ) to see if your school is a qualifying school.
You're a highly qualified teacher if:
- you have a bachelor's degree
- you are fully certified in the state you're teaching in and
- have not had any licensing or certification requirements waived for any reason.
Click here to download the Teacher Loan Forgiveness Application 2020.