I am a public service employee, which of my federal loans qualify for the Public Service Loan Forgiveness program?
Federally guaranteed student loans are provided under the Federal Direct loan program and the Federal Family Education Loan (FFEL) program.
Only Stafford (subsidized and unsubsidized), Grad PLUS and consolidation loans borrowed under the Federal Direct loan program qualify for the Public Service Loan Forgiveness program. Should you have FFEL loans held by private banks and lending institutions, you must consolidate or reconsolidate those loans into Federal Direct. See checklist at equaljusticeworks.org.
Can I consolidate Perkins loans?
Yes, you can consolidate Perkins loans into a Federal Direct consolidation loan if you include at least one FFEL or Direct loan. All Perkins loans consolidated into the Direct Loan Program will be included in the unsubsidized portion of the Federal Direct consolidation loan. Before you consolidate a Perkins loan please review deferment and cancellation benefits that you may be foregoing. There are grace period and cancellation provisions that you may not want to lose through consolidation.
For more info: http://ifap.ed.gov/sfahandbooks/attachments/0203SLGCh6Consolidating.pdf
Can I consolidate private loans that are not federally-guaranteed?
That depends on your lender. Private lenders do not offer a fixed interest rate, and consolidation benefits may depend on your credit rating and the current financial market.
Some of my federal student loans have a variable interest rate. Should I consolidate?
You may want to consolidate your variable-interest rate Direct loans because of the currently low rate of 2.48%. If you have FFEL loans with a variable interest rate and want to qualify for the Public Service Loan Forgiveness program, you must consolidate or reconsolidate those loans into Federal Direct.
All my Federal Direct loans have a fixed-interest rate, should I consolidate?
Since fall 2006 all federally-guaranteed loans have a fixed interest rate, and there is no benefit in consolidating any of those loans at this time unless you borrowed those loans under the Federal Family Education Loan (FFEL) program. Check out the pros and cons of consolidation at: http://www.studentloanborrowerassistance.org/understand-loans/consolidation-loans/
How do I consolidate?
Go to the Department of Education's Consolidation Self-Help Packet, Consolidation Website, or call 1-800-848-0979 for more information.
As a public service employee, which repayment plan should I choose?
In order to qualify for the Public Service Loan Forgiveness program (PSLF), you must be enrolled in one of the following repayment options:
• Income Based Repayment (IBR)
• Income-Contingent Repayment (ICR)
• 10-year repayment plan
All of my Federal Direct loans are in a standard repayment plan. Do my payments qualify for the Public Service Loan Forgiveness (PSLF) program?
• Yes, if you are referring to non-consolidation loans.
• No, if you have consolidated your loans. Your consolidation loan payments on a standard repayment plan do not qualify for PSLF. The length of a consolidation loan with a standard repayment plan is between 10 and 30 years, depending on your total education indebtedness. If you decide not to enroll in IBR, but want your consolidation loan payments to qualify for the PSLF, ask the Direct Lending Servicing representative for a grandfathered 10-year repayment plan.
For more information, check out the Direct Consolidation Loans FAQ. Please note: Direct Loan Servicing has not yet updated all of their webpages with the new IBR option.