FedLoan Servicing is a servicer of federal student loans.
As a federal loan servicer, they offer the student loan forgiveness programs that the U.S. Department of Education provides, including:
- Public Service Loan Forgiveness
- Income-Driven Repayment Plan Forgiveness
- Teacher Loan Forgiveness
Let's go over each loan forgiveness program, including their eligibility requirements.
FedLoan Offers Public Service Loan Forgiveness Program (PSLF)
The Public Service Loan Forgiveness Program offers loan forgiveness for your federal Direct Loans after you make 10 years of payments (120 qualifying payments) while working full-time for a qualifying employer.
Let's break this statement down.
Click here to learn How to Qualify for the Public Service Loan Forgiveness Program
PSLF only forgives Direct Loans
The PSLF program only forgives federal loans made under the Direct Loan Program. It does not forgive your private student loans. And it does not ordinarily forgive your student loan debt made under the Federal Family Education Loan Program (FFEL) or the Perkins Loan Program. I say ordinarily because you can make those loans eligible by converting them into a Direct Consolidation Loan.
Click here to learn How to Get Student Loan Forgiveness for FFEL Consolidation Loans
You get PSLF forgiveness after you make 120 qualifying payments
FedLoan Servicing is tasked with keeping track of the number of qualifying payments you've made towards the Public Service Loan Forgiveness Program.
So what are qualifying payments?
Under the PSLF program, your monthly payments count if you make them on-time and under a qualifying repayment plan.
Click here to learn Does Income-Driven Repayment Qualify for PSLF?
Your payments are on-time if they're made within 15 days of the date their due. Qualifying repayment plans are each of the income-driven repayment plans:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
It does not include payments you make under any other repayment plan, including the 10-Year Standard Repayment Plan.
FedLoan Servicing has been accused of not correctly counting loan payments. I try to avoid that happening to my clients by submitting the Employment Certification Form each year when we complete their annual recertification application. I also contact FedLoan each year to check how many PSLF payments they've credited towards my clients' accounts.
You have to be a full-time employee to qualify for PSLF
You're eligible for the Public Service Loan Forgiveness Program if you work full-time in qualifying employment as a public servant.
You're a full-time employee if:
- your employer considers you a full-time employee or
- you work at least 30 hours per week on average
You can still qualify for the program if you own you're self-employed at your own nonprofit organization.
Click here to learn more about How to Get Student Loan Forgiveness for Working at a Nonprofit
You have to work for a qualifying employer to qualify for the PSLF Program
For the PSLF Program, your employer is a qualifying employer if it is the:
- federal government
- state government
- local government
- tribal government
- a government agency
- 501(c)(3) non-profit organization or
- a qualified tax-exempt, non-profit organization that offers a public service.
AmeriCorps or PeaceCorps are considered public service organizations for PSLF purposes. So if you served in either organization, you worked in a public service job.
Click here to see List of Qualifying Employment for Public Service
FedLoan Offers Income-Driven Repayment Student Loan Forgiveness
If you don't have a public service job, Fedloan will still forgive your federal loans. But it's going to take at least twice as long.
Each of the IDR loan repayment plans will forgive your student loans after 20 to 25 years of payments.
Of course, that's a long time.
But depending on your monthly payment amounts, you may end up paying a lot less than you borrowed to pay for your higher education.
Unlike the PSLF program, you'll have to pay taxes on the student debt that's forgiven at the end of the IDR repayment option you chose. Depending on your interest rates and your student loan payment amounts, a colossal tax bomb could be waiting on you when your loans are forgiven.
Click here to learn more about Do Student Loans Get Forgiven After 10 Years?
Teacher Loan Forgiveness
FedLoan also offers the Teacher Loan Forgiveness Program for teachers who work at an eligible low-income elementary school, secondary school, or educational service agency for at least 4 academic years.
This program offers the least amount of student loan forgiveness to most eligible student loan borrowers. But it's the fastest.
Teachers who qualify for this program can get either $5 thousand or $17500 of their eligible loans forgiven.
Click here to learn How to Apply for Student Loan Forgiveness for Teachers?