How public service workers can get student loans forgiven

You took out student loans to go to college, and then you started a career in public service, as a police officer, a teacher, a nurse, a social worker.

Good news: The government wants to reward you for your service. After 10 years, you could be eligible for student loan forgiveness, wiping out an average of $58,000 in loan debt.

Good news, that is, if you’re one of the 206 people who have qualified for the federal program. Not so much if you’re one of the 41,000 others who have applied and been denied.

The form to request forgiveness is deceptively simple: It’s just two pages, not including instructions. But there are any number of ways to get tripped up. And borrowers who wait 10 years to apply might discover that they’ve made crucial mistakes at some point along the line.

Many of those mistakes can be overcome if caught in time. That’s why the Department of Education encourages borrowers to submit an employment certification form every year, or every time you change jobs. It’s the best way to raise your hand to let the government know you’re interested in loan forgiveness.

Requirements for the program are set by law. Neither loan servicers nor the Department of Education can waive them. But some borrowers say servicers have lied to them about their eligibility for the program in order to keep them in higher-margin loans. So it’s important to understand each of the four major requirements:

Work in a public service job

“Public service job” is defined in the law. It includes full-time employment (at least 30 hours a week) in:

Any level of government, including the military, public safety, law enforcement, the Peace Corps or Americorps;

Public education, including early childhood education;

Social work in a public child or family services agency;

Public interest legal services, including prosecution, public defense, or legal aid in a low-income community as part of a nonprofit organization; Public or school-based libraries; Public service in child care, service for individuals with disabilities, or the elderly;

Any other work at a tax-exempt public charity established under 501(c) (3) of the tax code;

Teaching at a tribal college or ina high-needs area as determined by the Department of Education;

Not qualified: Labor unions, partisan political organizations, for-profit organizations.

Some of these qualifications can get tricky, especially in the non-profit realm. For example: Work for a religious organization could qualify, but time spent on religious activities wouldn’t count toward full-time status.

Have the right kind of student loan

Only direct loans from the U.S. Department of Education are eligible. Stafford loans, Perkins loans, and Parent PLUS loans are not eligible. Rule of thumb: If your loan doesn’t have the word “direct,” it’s the wrong kind of loan.

But that doesn’t mean you can’t still pursue loan forgiveness. Just consolidate your existing loans into a direct loan, and future payments could be eligible.

Have the right repayment plan

There are eight kinds of repayment plans for student loans. To take advantage of the program, borrowers should be in an income-based repayment plan, or get into one as soon as possible. Those plans include:

Pay As You Earn.

Revised Pay As You Earn. Income-Based Repayment Plan. Income-Contingent Repayment Plan.

(If you’re in an Income-Sensitive Repayment Plan, you’re in the wrong kind of loan. Make sure you have a direct loan.)