Prepared by Federal Student AidU.S. Department of EducationFebruary 3, 2010The Questions & Answers (Q&As) that follow provide information about the Public Service LoanForgiveness (PSLF) Program that is available to most borrowers with loans made through theWilliam D. Ford Federal Direct Loan Program (Direct Loan Program
). We have grouped theQ&As into four categories: General Information, Eligible Loans, Qualifying Payments, andQualifying Employment. Following each answer is the date we posted that response. We willinclude a new date each time we add a question or when we update a previously posted response.
Public Service Loan Forgiveness – General InformationQ1 What is the Public Service Loan Forgiveness Program?
A1 The Public Service Loan Forgiveness (PSLF) Program was established to encourageindividuals to enter and continue in full-time public service employment by forgiving theremaining balance of their William D. Ford Federal Direct Loan Program loans (DirectLoans
) after the borrower has made 120 qualifying monthly payments (beginning anytimeafter October 1, 2007) while employed full-time by a public service organization. (February 3,2010)
Q2 What are the borrower eligibility requirements for loan forgiveness under the PSLFProgram?
A2 You must be employed full-time by a public service organization (see Q&A #26) when youmade each of the required 120 monthly loan payments on your Direct Loan and at the timeyou apply for loan forgiveness, after making the last of those 120 payments. (February 3,2010)
Q3 Are loan amounts forgiven under PSLF considered taxable income?
A3 No. According to the IRS, student loan amounts forgiven under PSLF are not consideredincome for tax purposes. (February 3, 2010)
Q4 Is income a factor in determining my eligibility for PSLF?
A4 Not directly, but you will not have any remaining balance to be forgiven after 120 paymentsunless, at some point, your payments have been reduced through your use of the Income-Based Repayment (IBR) Plan or the Income-Contingent Repayment (ICR) Plan (seeQ&A#15). (February 3, 2010)