Start the clock on loan forgiveness

Each July 1, interest rates and other federal student loan terms change. This year, in addition to a drop in costs for many new federal loans, borrowers in public service professions can take a major step toward student loan forgiveness.

PublicService Loan Forgivenes (PSLF) is a new federal program that will forgive remaining federal student loan debt after 10 years of qualifying loan payments and eligible full-time employment. The program is designed for borrowers whose income is low relativeto their debt for at least some of their time while in a public service job. Public service includes employment by federal, state, local or tribal governments (including the military and public schools and colleges), and by nonprofit 501(c)(3) organizations.

However, even if you're in an eligible job and have a lot of student debt relative to your income, you will only qualify for loan forgiveness if you are in the Direct Loan Program. The sooner you start making eligible payments, the better.

  • Starting July 1, 2008, borrowers who have already consolidated their federal loans with a private lender in the FFEL program (like Sallie Mae or other financial institutions), can reconsolidate into the Direct Loan program to become eligible for Public Service Loan Forgiveness.
  • Once in the Direct Loan program, you must also choose one of these three repayment plans to qualify: Income-Contingent Repayment, Income-Based Repaymen (IBR), (available July 2009), or Standard (10-year) Repayment.
  • Borrowers who have not yet consolidated their federal loans can apply for a Direct consolidation loan at any time, and those who already have Direct Loans can switch repayment plans at any time. October 2007 was the earliest that qualifying payments started counting towards 10-year loan forgiveness.

Anyone who thinks they might be eligible for Public Service Loan Forgiveness (PSLF) would be wise to begin making qualifying Direct Loan payments as soon as possible. You should also save your pay stubs to prove eligible employment.


New Downloadable IBRinfo Brochure

We've produced an introductory brochure about Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF), which you can share with your colleagues, students, employees, or anyone else who might be interested.

  • You can download the full color, double-sided, legal-size brochure and distribute copies yourself, or
  • You can email us at, and-while supplies last-we will send up to 100 copies to your school or office free of charge. (If you need more than 100 copies, let us know and we will try to accommodate.)
(This announcement was emailed to IBRinfo subscribers on June 17, 2008.)  
Income-Based Repayment and Pay As You Earn are two ways to help keep monthly payments affordable based on your income and family size. Visit the Department of Education’s Repayment Estimator to find out what your payments might be.

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