The Public Service Loan Forgiveness (PSLF) Program is the only program that offers forgiveness on all qualified loans tax-free after a 120 qualified monthly payments.

Only Direct loans in good standing are eligible for forgiveness. Federal Family Education Loan (FEEL), private loans and defaulted loans are excluded.

Qualified payments do not need to be consecutive. However, non-qualified payments are not ideal and will increase the total amount you have paid.

You are required to work at least 30 hours per week or what is considered full-time at your place of employment (whichever is greater). You can also work two part-time positions totaling to 30 hours as long as you are working for qualified employers that are considered:

  • Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
  • Not-for-profit organizations with qualifying public services
  • Any local, state, federal, or tribal government organization
  • Volunteer organizations, like the Peace Corps and AmeriCorps

Lastly, you are required to enroll under a qualified Income Driven Repayment Plan described below

Loan Forgiveness Through Income Driven Repayment Plans: Income based Repayment (IBR); Pay As You Earn (PAYE); Revised PAYE; etc.

  • Your monthly payments will depend on your family size and income (hence the name ‘income-driven’)
  • It is best to re-certify by submitting documentation annually even if your earnings and family size is unchanged
  • If you are married filing jointly, both you and your spouse’s income are taken into consideration
  • It forgives your loans after 20 -25 years of payments depending on your plan and when you borrowed; after 10 years if under PSLF
  • You will have to pay income taxes on your forgiven balance (HUGE TAX BOMB = or > than original principal), unless you are also enrolled in the PSLF program.

Note: If you are not in the PSLF program, you may receive a large tax bill. You may be exempt or partially responsible for your tax bill on forgiven loans if you qualify for insolvency meaning your total liabilities > total assets immediately before your loans are forgiven. Then again, why would you plan to have a negative net worth 20-25 years from now? Here’s a great post on insolvency.

You can find additional loan forgiveness plans with their details listed at and at

I Made 12 Qualifying Payments Under The PSLF Program – Then I Quit

As a physical therapist, there are many opportunities to work in non-profit organizations, so the PSLF program was a clear choice to affordably repay my debt.

After many hours of research, I successfully enrolled in the PSLF program and I planned to work for a hospital based outpatient clinic for 10 years to have my loans forgiven.

I estimated that I would have paid 1/4th of what I initially borrowed by the end of the PSLF program. If working for the same employer did not work out, I figured I would find another qualified employer easily. 

All being said and done, I thought my plan was foolproof. I made 12 qualifying payments.

Then deciding student loan forgiveness is not for me.

What Changed?

What I failed to consider was the possibility of not enjoying where I worked. I spent the first year of my career in a toxic work environment. There were many people who were fun to work with, but it only takes one person to make your work life a living hell.

I knew it was really bad when I stopped enjoying life outside of work. It worsened after work place bullying ensued even after I fractured my leg in car accident. After receiving both informal and formal advice, I decided to get a fresh start at my career. I began to look for other qualified employers defined by the Public service loan forgiveness (PSLF) program.

There was no luck even after months of searching. I can admit I was picky with potential employers for fear that I would end up in another toxic environment.

Things were not getting better at work.  I decided to stop framing my employment opportunities around eligibility for student loan forgiveness and prioritized my health and happiness. Within a week, I gladly accepted an offer in the private sector.

I still had the option to put my progress on loan forgiveness on hold while making unqualified payments and re-enter once I find a qualified employer, but I was not interested in extending the length of my repayment beyond 10 years. Instead, I laid out a plan to pay off my loans as aggressively as possible.

Why I Am Grateful For My Decision

My employment outlook is no longer limited to specific types of organizations. After a couple years, I had more time to search for employment at a fantastic local company with supportive colleagues, a flexible work schedule and with a competitive compensation package.

I no longer have the uncertainty of whether my loans will be forgiven under the PSLF program as you are only eligible to apply for loan forgiveness after making 120 qualified payments. As the program was created in 2007, the first recipients of this loan forgiveness was fairly recent. Apparently, there has been some difficulty with recipients receiving loan forgiveness reported by NPR here.

I no longer need to spend precious time submitting annual re-certification paperwork and ensuring HR completes my employment verification correctly.

My wife and I now simplify taxes by filing jointly allowing opportunities to claim tax credits and deductions that is not available to those filing separately. Most borrowers will file separate to keep their monthly payments low.

I can now increase my income by working over-time, multiple jobs, or side-hustles without paying more towards my student loan balance that would be forgiven regardless.

Best of all,I am now debt free to the federal government. With most of my debt and uncertainty out of the way, I can allocate time and energy to my passions and goals.

Things to Consider If You Are Going The Public Service Loan Forgiveness Route

Political Landscape Changes

With news about the Trump Administration dismantling PSLF and other repayment options, it is uncertain whether or not you will be a beneficiary or a victim of this program.

A lot can happen in 10 years. The political landscape may directly or indirectly impact how much you may benefit. For example, revised tax laws may make it more beneficial to file jointly, but will also increase your monthly payments if your spouse earns an income. If you are accepted into the program today, any future change to the program may not effect you. However, there are no rules stating that the federal government needs to grandfather you in if the program changes it’s payout, program requirements, or if the program becomes terminated. 

It is evident that the current U.S. government will be looking to free up their budget at the expense of students nationwide. Trump’s budget plan for 2019 already proposes to cut funding for education by 5%. That’s not all, the U.S. State Secretary of Education, Betsy Devos, is proposing a plan to cut $13 billion of funding for student loan forgiveness and debt relief for those who borrowed after July 2019. This will make it more difficult for students who seek student loan forgiveness. Read more about it at

Personal Factors

Do you plan on relocating? Despite the number of qualified employers in my area, it was difficult to find one to suit my interests.

How much will your monthly payments be based on your salary? How much more will you pay based on bonuses, raises, or other income sources? Use studentloanhero’s calculator to help.

If your monthly payment < monthly accrued interest, you will see your student loan balance increase each month. Can you tolerate the accumulating mountain of student loan debt with the uncertainty of loan forgiveness looming over you?

If you made the decision to also opt out of student loan forgiveness make sure you check out my post on how to pay off of your student loans fast.

Updated: October 29, 2018

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