Military families may rely on a variety of financial aid packages to help afford a higher education; including scholarships, grants, and loans. If your service member has federal loans, he or she will want explore the Public Service Loan Forgiveness (PSLF) program.
The PSLF is a program for federal student loan borrowers who work in a range of public service jobs, including military service. The program forgives remaining debt after 10 years of eligible employment and qualifying loan payments. In most cases eligibility is based on whether you work for an eligible employer. Your job is eligible if you:
• are employed by any nonprofit, tax-exempt 501(c)(3)organization
• are employed by the federal government, a state government, local government, or tribal government (this includes the military and public schools and colleges); or
• serve in a full-time AmeriCorps or Peace Corps position.
PSLF applies to federal Stafford, Grad Plus, or consolidation loans as long as they are in the Direct Loan Program. Borrowers with Federal Family Education Loan Program (FFELP) loans must switch to the Direct Loan program to participate in this benefit.
In order to qualify for loan forgiveness the borrower must make 10 years (or 120 monthly payments) after October 1, 2007. Qualifying payments are made through the Direct Loan program. To count, the payments must be made while working full-time in an eligible job. “Full-time” means 30 hours per week or the standard for full-time used by the employer, whichever is greater. If your service member meets all of the eligibility criteria the earliest the remaining debt could be forgiven under the program is October 2017.
With advanced planning, the PSLF is another tool your family can use to help make higher education affordable. Since federal student loan interest rates reset each July , now is a good time to explore the PSLF program to see if it is right for you and your family.