Forgiving Student Loans through Public Service

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Forgiving Student Loans through Public Service

Graduates burdened under high student debt loads have an additional tool to help them erase their debt, courtesy of Uncle Sam.

The Public Service Loan Forgiveness Program (PSLF) is a U.S. government program created in 2007 to forgive certain federal student loans for borrowers who work full-time in public service jobs. Besides providing debt relief, the program aims to attract more professionals into public service. It was overhauled in 2021 to make eligibility easier, and while its core purpose remains, new rules take effect July 1, 2026.

Here are the main points of the program in a nutshell:

• You must be working full-time for a government or not-for-profit organization.
• Your loans must be Direct Loans.
• You must be repaying under an income-driven repayment plan—starting July 2026, that means the new repayment assistance plan (RAP).
• You must make at least 120 qualifying payments. (Covid-suspended payments still count if you were working full-time for an eligible employer.)

Here are the details.

What loans are eligible?

Only loans under the William D. Ford Federal Direct Loan Program qualify. Perkins loans and loans from the Federal Family Education Loan Program do not—unless consolidated into a Direct Consolidation Loan. Loans from private lenders do not qualify.

The Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program still exists for borrowers denied PSLF due to repayment plan issues, but funding is limited and first-come, first-served.

What jobs are eligible?

The eligibility of a job depends on the eligibility of the employer. Jobs in government organizations (U.S. federal, state, local, or tribal), including the military, and in not-for-profits that are tax-exempt 501(c)(3) organizations qualify. Not-for-profits that are not tax-exempt under 501(c)(3) might still qualify depending on the type of public service they do.

For-profit organizations do not qualify.

If you work for a contractor of a qualifying employer, the contractor, too, must be a qualifying employer.

You must work full-time—at least 30 hours a week or your employer’s definition of full-time, whichever is greater. Multiple qualifying part-time jobs can count if combined hours average 30+ per week.

A note about taxes

In general, debts that are forgiven are required to be counted as income on the borrower’s tax forms, meaning the borrower must pay tax on them. But debts forgiven under the Public Service Loan Forgiveness (PSLF) Program are not considered taxable income by the federal government. Some states may still tax the amount forgiven, so it is important to check your state’s tax rules.

Getting started on the process

Provided that you have met the criteria, you must fill out and submit the Public Service Loan Forgiveness (PSLF) and/or the Temporary Expanded PSLF (TEPSLF) Certification & Application form. You can find respective links to them here and here.

Special opportunities for medical professionals

In addition to the Public Service Loan Forgiveness Program, healthcare professionals might be able to take advantage of several loan repayment programs offered by the Health Resources & Services Administration. For example, registered nurses can have up to 85% of unpaid nursing education debt repaid in exchange for service in medically underserved communities. See here for details.

Special opportunities for teachers

There is a fairly limited federal Teacher Loan Forgiveness Program in addition to the Public Service Loan Forgiveness program. See here for details. There are also limited state and local loan forgiveness programs for which teachers might qualify. See the American Federation of Teachers database for details.

Final note

NOTE: These programs have complex qualification requirements and are subject to change. Always check official sources for the latest updates.