Overwhelmed With Student Debt? Consider This Public-Service Loan Forgiveness and Repayment Plan
A Public Service Loan Forgiveness Program has been set up to help public service members, especially physicians. Since many graduates have become overwhelmed with debt recently, this program offers a realistic solution for recent grads to get out of debt. Public Service Loan Forgiveness (PSLF) is a program that takes 10 years to complete, and it has many different payment options along the way to help members of the public arena with their student loan debt. If you do qualify for PSLF you can be accepted as early as residency, so you can start gaining control over your student loan debts now.
Your Loan Type May Qualify
There are certain criteria that applicants are judged on when applying for PSLF, and they must meet all criteria in order to qualify for this assistance program. Federal Student Loans accumulated during university and graduate programs are eligible for forgiveness. The loan in question must be federally funded in order to qualify for PSLF. This includes federal funding received through Stafford and Perkins, and there are some other loans that are backed by the federal government.
Qualification Depends on Where You Work
One of the main requirements for PSLF is that the applicant works for a government agency or a non-profit for the entire duration of the program. The government agency who employs you can be at the federal, local or state level. Qualified applicants may also work for a non-profit agency that has 501c3 status, and there are some non-profit agencies qualify without this status. Knowing whether your place of employment is for profit or an eligible nonprofit is vital information used to determine eligibility, and can be helpful when deciding where to work after residency if you plan to remain in the PSLF Program.
Making Payments with the PSLF Program
Making payments is a requirement of the program. If you’re going to stay enrolled in the program then all of your payments for the 10 years must be on-time, for the complete amount, and you must remain employed at a non-profit or government agency. The good news here is that during any training programs you will experience lower monthly payments, for this is meant to make the transitions easier for public service people. As long as you make your payments on time and remain at an eligible place of employment this program could prove to be a helpful path to get your student loans settled.
When to Start Applying for PSLF
Since it takes 10 years to complete the PSLF Program and the government will only forgive your loan if you complete the entire program, you should start applying as soon as possible. You can apply as early as residency or fellowship programs, and if you are accepted to an employer that does not qualify for the program it will not be a problem. For example, let’s say you leave residency to work at a for-profit employer that does not qualify for the program… In this case you surely have your reasons for leaving the program, and there are no fees associated with leaving the program before it ends.
Staying in the Program
In order to stay in the PSLF Program you must make each and every one of the 120 payments on time and the payments must be paid in the full monthly amount. Additionally, you have to submit a form every year to FedLoan Servicing. This form is called an employment certification. It must be submitted yearly or anytime you decide to change jobs.
What Happens After You Qualify
As long as you continue making correct payments on time and stay employed with an eligible employer your loan will be forgiven at the end of the 10 year period. The PSLF Program is new, so the process is still being created and revised. When you make your last payment toward your loan and turn in your application you will receive forgiveness for the remaining balance. In order to better understand the PSLF Program requirements and how this information can benefit you it is best to work alongside a qualified individual who knows how to assist you.
Start the Program Today to Save for Tomorrow
The sooner you start the 10 year program the better. Your loan responsibilities will change over time, so it is best to start as early as possible. If you start in residency or fellowship your payments will start off lower, and when your loan is forgiven it will cover more of your costs associated with education. As time progresses you may have more liabilities and assets, so it’s helpful to have guidance for loan and tax purposes.
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