Public Service Loan Forgiveness (PSLF) is still a critical pipeline for federal student loan borrowers that provides debt forgiveness after ten years of public service. However, policy changes and actions of recent presidential administrations created more complexity. Step-by-step detailing of what it now takes to qualify, and more recent policy impacting eligibility, follows.
Qualifying employment: The cornerstone of PSLF
To be eligible, borrowers must work full-time for:
- Federal, state, local, or tribal governments, or public school systems and the military.
- 501(c)(3) nonprofits like public hospitals or charities.
- Non-501(c)(3) nonprofits with qualifying public services (for example, emergency management, early childhood education, public health).
- Religious groups, as long as their primary purpose is focused on qualifying public services.
The March 2025 executive order places controls, excluding employers who are involved in activities that are considered to be of “substantial illegal purpose” like violating federal immigration policy or discrimination. Even though the legality of this action is in question, it makes nonprofits that are involved in politically oriented advocacy aware of increased observation.
Full-time work requirements
Borrowers must work a minimum of 30 hours a week or their employer’s full-time definition, whichever is more. Several part-time jobs with qualifying employers may be aggregated to satisfy this requirement. Time spent on religious observance (e.g., worship services) qualifies as full-time if part of job responsibilities.
Eligible loan types and repayment plans
Only Direct Loans are eligible, including:
- Direct Subsidized/Unsubsidized Loans
- Direct PLUS Loans (for parents or graduate students, if consolidated with the borrower’s own loans)
- Direct Consolidation Loans
FFEL or Perkins program loans need to be consolidated into a Direct Loan to be eligible. Private loans are not eligible.
Repayment plan requirements
Borrowers need to enroll in:
- Income-Driven Repayment (IDR) plans, including SAVE, PAYE, or IBR.
- The 10-Year Standard Repayment Plan, though that does not have any balance left to forgive after 120 payments.
- Extended or Graduated Repayment plans do not count.
120-Payment requirement
Qualifying payments
- A total of 120 payments are required that do not have to be consecutive.
- Only payments made after October 1, 2007, under enrolled plans while working full-time for a qualifying employer are eligible.
- COVID-19 forbearance months (March 2020–August 2022) qualify if loans were in “in repayment” status and employment criteria were satisfied.
- Default, in-school deferment, or non-participating forbearance do not qualify.
Recent policy changes to eligibility
The March 2025 executive order places vague barriers in the way of entities engaged in:
- Climate change activism
- Diversity, equity, and inclusion (DEI) programs
Future applicants from these industries may be barred while existing enrollees are allowed to continue being eligible. Court challenge is anticipated since the order bypasses traditional rulemaking procedures.
Increased payment crediting
Reforms recently permitted:
- Lump payments of 12 months’ worth of future credits.
- Military deferments are credited towards PSLF.
Application process and best practices
- Utilize the PSLF Help Tool to generate forms and confirm employer eligibility.
- Submit PSLF form annually or with change of employment to monitor progress.
- Consolidate non-Direct Loans prior to applying.
Common pitfalls to avoid
- Repayment plans: Borrowers on Extended or Graduated plans need to transition to IDR.
- Part-time work: Several qualifying jobs need to average 30 hours/week collectively.
- Employer misclassification: Verify eligibility via the federal employer database.
The PSLF program still provides significant relief for public servants, but policy shifts in 2025 require caution.
Related article:
What to do if your student loan forgiveness is blocked and you are enrolled in SAVE
Bad news for student borrowers: Trump plan curbs loan forgiveness
