Government contractors can qualify for the Public Service Loan Forgiveness Program, but they must work for a qualifying employer.* This includes working full-time for a government agency or a nonprofit organization that’s tax-exempt under Section 501(c)(3) of the Internal Revenue Code. Unfortunately, if you work part-time, are self-employed, or are an independent contractor for a for-profit company, you’re not eligible for PSLF.
Use the PSLF Help Tool on the Federal Student Aid site, StudentAid.gov, to check if the Education Department believes your employer is eligible for the program.
If it turns out that your employer qualifies, make sure you meet the other eligibility requirements. To be eligible for the PSLF Program, you must:
Have Direct Loans or Federal Family Education Loans (FFEL) that have been consolidated into a Direct Consolidation.
Make 120 qualifying payments under a qualifying repayment plan, i.e., an income-driven repayment plan.
Submit a PSLF form signed by each qualifying employer you’ve worked for since the PSLF program started.
A qualifying payment is one that is made on time, for the full amount due, under one of the IDR plans — Income-Based Repayment, Income-Contingent Repayment, Pay As You Earn, or Revised Pay As You Earn.
Related: Types of Income-Driven Repayment Plans
If you want to participate in the PSLF program, double-check that you meet the eligibility criteria right away rather than waiting several years.
The big thing to review is the type of loans you have. Loans made through the Federal Direct Loan Program are eligible — including Parent PLUS Loans. Loans made through the FFEL or Perkins Loan student loan program are not — at least not automatically. If you consolidate those loans into a Direct Consolidation Loan before May 1, 2023, you can get PSLF credit for payments made before applying for consolidation. Read more about the PSLF Waiver.
Make sure you understand the requirements and are eligible by speaking with your student loan servicer, the Education Department, or a student loan lawyer like me.
Related: Does Forbearance Count Towards PSLF?
* An eligible employer for PSLF includes full-time employment with the local, state, federal, or tribal government agencies, not-for-profit organizations that provide public service, military service, and volunteer service with the AmeriCorps or PeaceCorps. It does not include work with labor unions and partisan political organizations.