A public service loan forgiveness program was established by the College Cost Reduction and Access Act of 2007 to assist students who pursue careers in public service. Eligible borrowers who work for 10 years on a full-time basis in public service, may apply to have their remaining student loan debt (including principal and interest) forgiven.
The definition of “public service job” as defined in Title IV of Public Law 110-84 includes full-time jobs in government, military service, law enforcement, public health, public education, social work in a public child or family service agency, public interest law services, teaching as a full-time faculty at tribal colleges and universities, employees of tax-exempt 501(c)(3) organizations and many other types of full-time positions.
In order to be eligible, the borrower must make 120 monthly payments after October 1, 2007 on a Federal Direct Loan (i.e. Federal Direct Stafford Loans [Subsidized and Unsubsidized], Federal Direct PLUS Loans, and Federal Direct Consolidation Loans). Perkins Loans are only eligible for forgiveness if they are included in a Federal Direct Consolidation Loan. The payments do not need to be consecutive; nevertheless, the borrower must be employed in a public service job for each of the 120 monthly payments.
On January 31, 2012, the U.S. Department of Education released an employment certification form. It is the responsibility of the borrower to initiate the process of obtaining certification employment from the employer. The employer would need to sign the form and write-in the organization’s name and address, federal EIN, type of organization, the dates during which the borrower was employed at the organization, whether the borrower was full-time or part-time and the borrower’s average number of hours per week. If the borrower is unable to obtain certification from an authorized official, the borrower may provide information about his or her employment. The U.S. Department of Education will request additional evidence of qualifying employment. The form is not required to be filed; however, it is recommended that the borrower submit the form annually, or whenever the borrower changes employers, to make certain that the qualifying service is recorded correctly. The U.S. Department of Education will inform the borrower whether the reported employment satisfies the requirements for forgiveness upon submission of the form. In addition, borrowers will have the ability to track their progress toward obtaining loan forgiveness. Though not yet available, borrowers will need to file a Public Service Loan Forgiveness application in order to obtain loan forgiveness.
This program is targeted at borrowers having high debt and low income. Also, borrowers should keep in mind that if they stop working full-time in a public service job, they will not attain loan forgiveness. Even though borrowers will not be able to begin applying for loan forgiveness until 2017, they should begin to maintain documentation of their full-time employment in a public service job on an annual basis. It should also be noted that federal law does not currently include an expiration date for this program.
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