Q: Are consolidated student loans eligible for PSLF?

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Consolidated federal student loans are eligible if they are made under the Direct Loan Program. Depending on when you consolidated, your consolidation loan may be made under the Federal Family Education Loan Program or the Direct Loan program.

The Public Service Loan Forgiveness Program only offers loan forgiveness to federal Direct Loans.

So if your consolidation loan isn't a Direct Consolidation Loan, it's not eligible for the PSLF program.

Are FFEL consolidation loans eligible for PSLF?

FFEL consolidation loans are not eligible for student loan forgiveness under the PSLF program.

You can fix this, however, by applying for a new loan consolidation and choosing FedLoan Servicing as your loan servicer. (FedLoan Servicing is the authorized loan servicer for processing PSLF applications.)

The resulting consolidation loan will change the FFEL consolidation loan into a Direct Consolidation Loan. The new consolidation loan will now qualify for forgiveness.

Here's one thing you should know about the new loan:

Any monthly payment amounts you made towards the FFEL loan do not count towards loan forgiveness under the PSLF program. Said differently, there's no retroactive credit for the loan payments you made. You're starting at 0 payments with the new consolidation loan.

Click here to learn How to Consolidate Federal Student Loans?

How do I know if I have FFEL loans?

The easiest way to find out if you have loans made under the FFEL program is to check the US Department of Education's studentaid.gov.

This website shows you:

  • all of the federal student loans you borrowed
  • the type of loans you have (FFEL Loans, Perkins Loans, Direct Unsubsidized Loans, etc.)

Another option is to contact your loan servicer. The representative should be able to tell you what type of loans you have.

(My preference, however, is for you to use studentaid.gov. You'll be able to see for yourself what type of loans you have, the loan balance, the repayment plan you're in, etc.)

Quick reminder about PSLF requirements

Here are the Public Service Loan Forgiveness eligibility requirements:

  • you work for a qualifying employer (qualifying employment includes federal or state government organizations or non-profit organizations)
  • you work full-time (full-time employment is at least 30 hours per week)
  • you make 120 qualifying payments (i.e., on-time, and under a qualifying repayment plan)
  • you have eligible loans (i.e., Direct Loans)

A qualifying repayment plan is any of the income-driven repayment plans:

  • Revised Pay As You Earn (REPAYE)
  • Pay As You Earn (PAYE)
  • Income-Based Repayment Plan (IBR)
  • Income-Contingent Repayment Plan (ICR)

Monthly payments made under the Standard Repayment Plan don't qualify for your qualifying payments.

While we're at it, here's a list of all the eligible loans for PSLF:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct Plus Loans (Grad and Parent)
  • Direct Consolidation Loans

When do you need to submit the Employment Certification Form for PSLF?

You should submit the Employment Certification Form every year.

Typically, I submit the form for my clients at the same time I submit their annual income-driven repayment recertification form.

If you haven't submitted this form before and you've worked in other public service jobs, you can submit a form for your old jobs as well.

Hopefully, your loans are with FedLoan Servicing. But if they're not, you'll want to submit your Employment Certification Form to FedLoan. Once you do that, your eligible federal loans will be transferred from your current loan servicer to FedLoan.

Download: Public Service Loan Forgiveness Employment Certification Form

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