It’s no secret that millions of American students have availed student loans to pursue higher education. In fact, according to statistics, there are around 43.2 million student loan borrowers who each have an average debt amount of $39,351! To attain a bachelor’s degree at a public university, the typically borrow will total an average of $30,030 in debt.
The good news is that students who want to pursue careers in public service may be able to have their debt forgiven through the Public Service Loan Forgiveness Program (PSLF). As part of the College Cost Reduction and Access Act of 2007, student borrowers who have chosen careers in public service can become eligible for tax-free loan forgiveness under the PSLF program.
But, what is considered public service for student loan forgiveness?
How Student Loan Forgiveness Works
Before defining what constitutes public service, it’s important to understand how the PSLF program works. Simply put, after making 120 qualifying payments, eligible borrowers who work full-time for federal, state, tribal, or local governments, as well as those who work for non-profit organizations, will be released from their obligation to pay the remaining balance on their federal direct student loans. Making qualifying payments can take 10 years, but as of April 2020, an average balance of $66,066 has been forgiven through the PSLF program!
It is important to note that to be considered a full-time employee, you must render at least 30 hours per week with a qualified employer while making the 120 qualifying payments. These payments, however, don’t need to be made consecutively.
Additionally, you’ll be required to submit a Public Service Employment Certification Form in order to prove that you are indeed worked and/or are working for a qualifying employer.
What Qualifies as Public Service for Student Loan Forgiveness?
To define what makes up public service employment, here’s a list of qualifying common job sectors by category:
Working For a Non-Profit Organization
This includes organizations that are exempt from paying taxes under Section 501(c)(3) of the Internal Revenue Code. Also included are organizations that are not exempt from paying taxes under that code, but do provide qualifying services, which include the following:
Public Safety
- Military services on behalf of the U.S. armed forces or National Guard
- Law enforcement services such as the prevention, control, or reduction of crimes, or the enforcement of criminal law
Public Interest Law
- Legal services provided by an organization partially or fully funded by a U.S. federal, state, local, or tribal government
Public Education
- Early childhood education including Head Start, state-funded pre-kindergarten, and licensed or regulated child care
- Teaching as a faculty member at a tribal or college university
- Teaching as a faculty member in a subject area that has a shortage of educators
- Public library services
- School library services
- Other school-based and public education services
Public Health
- Services provided by nurses, nurse practitioners, nurses in a clinical setting, and other-full-time professionals engaged in occupations practicing healthcare as defined by the Bureau of Labor Statistics SOC Code Series 29-1000
- Health support occupations as defined by the Bureau of Labor Statistics SOC Code Series 31-0000
- Certain community and social service occupations as defined by the Bureau of Labor Statistics SOC Code Series 21-1000
Other Public Services
- For the elderly
- For individuals with disabilities
- Social work for a public family or child service agency
- Emergency management
- Government, but excluding time served as a member of Congress
Full-time volunteers for the AmeriCorps or Peace Corps are also recognized as qualified employment for the PSFL.
What Doesn’t Qualify As Public Service for Student Loan Forgiveness?
If you’re working for the following employers, you probably aren’t eligible for the PSLF:
- For-profit businesses
- For-profit government contractors
- Labor unions
- Partisan political organizations
- Religious organizations, unless your job is unrelated to proselytizing, worship services, or religious instruction
Be in the know
While PSLF isn’t a perfect program, and it may take a long time before you can apply, it still pays to know whether or not you could be eligible! Take note of the requirements, as well as the eligible careers that can help you get tax-free relief from your federal direct student loans!
