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out-pacents Student Loans

First come First Serve to Benefit from Direct Loan Forgiveness Boost

Public Service Loan Forgiveness Plan Gets a Temporary Boost

Have you been working toward public service loan forgiveness, but then were told you were not qualified? Are you sure all your payments have been qualifying payments? Have you confirmed that your employer is a qualifying employer? The public service forgiveness program for Direct Loans has come with lots of questions. The first eligible borrowers were allowed to apply for forgiveness last year, but some were left with the same debt and more questions.

PAs who have borrowed for their PA education may be able to have some of their loans forgiven, but it is important to know what loans are eligible and what you need to do to have them forgiven. Also, it is important that you stay up to date with any changes as it can affect your planning. The most recent change from congress allows some student loan borrowers to still qualify if they were previously in a non-qualifying payment plan.

If you were previously told that you did not qualify for the public service loan forgiveness plan because you were not in the correct repayment plan, now you may qualify. Previously graduated or extended repayment plans were ineligible for forgiveness, but with the boost in the budget some of the loans paid under these plans may count as qualifying payments now.

In order to qualify, the same requirements from the Public Service Loan Program remain – your loans are from the Direct Loan orogram, all your payments were in full and on time, and you have made 120 qualifying loan payments while working for a qualifying employer.

One caveat to this boost is that the forgiveness will be given on a “first-come, first-served” basis, until the money runs out. You’ll be able to start applying in about 60 days, so if you think you might be eligible you will want to get your application in first.

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Don’t be left in the dark with your student loans, and if you’re planning on public loan forgiveness make sure you’re on the right track:

  1. Make sure you have the right loans

Depending on the type of loan you have, there might be different rules for forgiveness. For Public Service Loan Forgiveness qualifying loans include Direct Loans. If you have any private loans, these are not included.

One way to get your private loans or any other loans included in the Public Service Loan Forgiveness plan is to consolidate all of your loans into a Federal Direct Consolidation loan.

Another type of loan that you might have is a Perkins Loans, and for those working in the medical field such as PAs you can have these loans cancelled under a different set of rules.

The important thing to know is that different loans have different rules for cancellation or forgiveness. In order to take advantage of any of these plans, you need to know what loans you have and what the rules are to have them forgiven.

  1. Make sure you have the right employer

For the Public Service Loan Forgiveness Plan it is less about what you’re doing for work and more about the type of employer. “Qualifying employers under the Public Student Loan Forgiveness program include government organizations (federal, state, local or tribal), not-for-profit organizations that are tax exempt under Section 501(c)(3) and some other not-for-profits that provide public service.”

Just because you work in a public service field does not qualify you for forgiveness. If the hospital or organization you work for is a for-profit business, than they would not qualify.

If you have a lot of student loans and think forgiveness might be something you want to try for, make sure when you’re looking for a job that the employer qualifies. Many hospitals are not-for-profit and will qualify, but not all of them are.

  1. Confirm you’re on track

You don’t have to wait the 10 years and 120 payments to find out if you qualify. You can confirm, on an annual basis, that what you’re doing will qualify for forgiveness. Use the qualification form to make sure your employer and loan types qualify for forgiveness. Also, make sure you’re in the correct repayment plan.

  1. Watch for new developments

As mentioned in the first part of this article, things seem to always be changing with student loans. With each new congressional bill comes a different rule. Make sure you stay on top of these changes so you don’t miss out on opportunities, or worse, plan on having your loans forgiven and finding out you don’t qualify, after years of repayment.

Are you planning on student loan forgiveness? Have you already applied? Don’t forget to sign up to receive future posts by email, please comment below the original post and share with your friends!