Student Loans

Public Service Loan Forgiveness

The whole remaining balance discharged after 120 qualifying monthly payments while working full time for a government or a qualifying non-profit. Tax-free, and the only forgiveness that still is.

What it takes

  • 120 qualifying monthly payments. They do not have to be consecutive.
  • Direct Loans. FFEL and Perkins loans have to be consolidated first, and consolidating now moves you into the RAP and Tiered Standard world.
  • A qualifying plan for each of those payments. The income-driven plans and the ten-year Standard plan qualify. Graduated, Extended, the Standard plan on a consolidation loan, and the new Tiered Standard do not.
  • Full-time employment by a qualifying employer throughout, and still employed by one when the application goes in.

What it does not cover

  • Tiered Standard is the automatic default for anyone entering repayment with a loan from 1 July 2026, and it earns no credit. A public service worker who never picks a plan is working for nothing towards this.
  • For a borrower with any loan disbursed on or after 1 July 2026 who is in RAP, only payments made in full and on or before the due date count. Deferment and forbearance months do not, apart from economic hardship deferment.
  • For-profit employers do not qualify, and neither do labour unions or partisan political organisations.
  • Payment counters on StudentAid.gov are not currently displaying, pending court-ordered system changes.

Which employers count

  • Federal, state, local and tribal government of any kind, including the military.
  • Organisations exempt under section 501(c)(3).
  • Other non-profits where a majority of full-time staff are devoted to qualifying public services.
  • Full-time AmeriCorps or Peace Corps volunteer service.

And which do not

  • For-profit organisations, including for-profit government contractors.
  • Labour unions.
  • Partisan political organisations.

Federally tax-free

Permanently excluded from federal income under section 108(f)(1). State treatment can differ.

State treatment is separate and this site does not guess at it. Check your state.

This one is being litigated

The rule letting the Secretary disqualify an employer for a substantial illegal purpose, which would have narrowed who counts as a qualifying employer for Public Service Loan Forgiveness.

U.S. District Court for the District of Columbia, vacated in its entirety on 30 June 2026, one day before it was to take effect.

The pre-existing definition of a qualifying employer governs. The Department's own site confirms the employer certification language has no effect. Whether it is being appealed is not established.

Read more about the case

Project what it would write off

Sources

  1. Public Service Loan Forgiveness, U.S. Department of Education. Checked on . Backs the 120 qualifying payments and which plans qualify; that Tiered Standard payments do not qualify; the qualifying and non-qualifying employer categories; that the vacated employer rule has no effect.
  2. Teacher Loan Forgiveness, U.S. Department of Education. Checked on . Backs the $17,500 and $5,000 amounts and who each applies to; the five complete and consecutive years requirement; that the same service cannot count towards PSLF.
  3. Total and Permanent Disability discharge, U.S. Department of Education. Checked on . Backs the three qualification routes; the automatic discharge through quarterly data matches; the three-year monitoring period and that a VA-based discharge has none.
  4. Closed School discharge, U.S. Department of Education. Checked on . Backs the 180-day window and the automatic discharge one year after closure; the refund of payments and deletion of adverse credit history.
  5. Court actions affecting income-driven repayment, U.S. Department of Education. Checked on . Backs that the tax exclusion covered discharges from 1 January 2021 to 31 December 2025; that a milestone reached before 2026 remains covered if the discharge is processed later.

Checked on .