SafeHarbor Financial | PSLF Program
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What is it & what benefits does it offer?

In 2007 congress created the Public Service Loan Forgiveness Program (PSLF) thanks to the College Cost Reduction and Access Act. This program was designed to reward and encourage highly qualified graduates to pursue careers in the public service sector, or with non-profit organizations. If you qualify for the program, you will be required to make 120 income based, on-time payments (10 years), and the balance remaining of your student loans will be forgiven. In certain cases, the monthly payment may be as low as $25.00 per month depending on the income and family size of the applicant. *The Public Service Loan Forgiveness Program (PSLF) is only applicable to federal student loans. Private loans are not eligible.

Do I Qualify?

Realize that certain steps need to be taken to qualify for this program. Unfortunately, many borrowers incorrectly believe that they qualify simply because they work in the public sector, their loans will be forgiven in ten years. This is not the case for most borrowers due to incorrect loan types and not being enrolled in the correct type of repayment plan.

What Types of Loans Qualify?

To be eligible for the Public Service Loan Forgiveness Program, you must have the following loan types:

  • Direct Subsidized or Unsubsidized Loans
  • Direct Stafford Subsidized or Unsubsidized Loans
  • Direct Consolidated Loans
  • Direct PLUS

Unfortunately private loans will not qualify under any circumstance. It’s important to know that loans in default will not qualify. If you have another type of federal loan, it too will not qualify for the PSLF program. Most borrowers do not have Direct Loans and with that status will not qualify for the program. But fortunately there is a way to convert your federal loans into Direct Loans. The Direct Loan Consolidation program takes all of your existing federal loans and consolidates them into one new Direct Loan. If you do not have Direct Loans but wish to apply for the Public Service Loan Forgiveness Program, you will need to consolidate your loans first. And, we can help you take that first step – no problem! Call today 1-855-569-4009.

 

Safe Harbor is unique in that we are a financial planning firm. Our primary goal is to help you – the client – no matter where you are on your path to creating financial security, identify specific financial goals such as creating more cost effective ways to pay off your student loans.

How Much Can Be Forgiven?

Currently, there is no maximum amount that can be forgiven.

120 Qualifying Payments

Once you have Direct Loans, you must also be making payments in the Income Based Repayment Plan, Income Contingent Repayment Plan, or Pay As You Earn Plan. All three of these plans give you a monthly payment amount that is calculated on your income and the size of your family.

 

All payments must be made on time to count as one of your 120 qualifying payments. What does “On Time” mean? On time is defined as being within 15 days of the scheduled payment date. Payments that are made in a lump sum, or in advanced for future months will not be counted as qualifying payments.

What Types of Employment Qualify?

Qualifying employment is any employment with a federal, state, or local government agency, entity, or organization or a non-profit organization designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC). The type or nature of employment with the organization does not matter for Public Student Loan Forgiveness purposes. Additionally, the type of services that these public service organizations provide does not matter for Public Service Loan Forgiveness purposes. Call today 1-855-569-4009.

A private non-profit employer that is not a tax-exempt organization under Section 501(c)(3) of the IRC may be a qualifying public service organization if it provides certain specified public services. These services include emergency management, military service, public safety, or law enforcement services; public health services; public education or public library services; school library and other school-based services; public interest law services; early childhood education; public service for individuals with disabilities and the elderly. The organization must not be a labor union or a partisan political organization. Generally, the type or nature of employment with the organization does not matter for Public Service Loan Forgiveness purposes. However, when determining full-time public service employment at a not-for-profit organization you may not include time spent participating in religious instruction, worship services, or any form of proselytizing.

What is Considered Full Time Employment?

You must be considered a full time employee by your employer and must work a minimum of 30 hours per week. Time spent participating in religious instruction, worship services, or any form of proselytizing may not be counted as part of that 30 hour minimum. For teachers of other employees within a public service organization that are under contract for at least 8 out of 12 months, you will meet the full-time standard if you work at least 30 hours per week during your contract period. If you work in two separate public sectors, or non-profit jobs, you will meet the requirement if the combined hours at both positions is 30 hours or more per week.

How Do I Get Started?

Safe Harbor is unique in that we are a full service, financial planning firm. Our primary goal is to help you – the client – no matter where you are on your path to creating financial security, identify specific financial goals such as assisting you with qualification and entrance into the Public Service Loan Forgiveness Program. We assist you with the actual process of identifying the most efficient way of accomplishing this objective and helping you save thousands of dollars in the process.

Sounds great, right? But it can get tricky. There are many marketing companies out there whose names include words such as: “Student Loan Help”, or “Student Loan Forgiveness” who make it sound as though you can simply call them and have your loans forgiven. The problem is these companies charge anywhere from $600 to $1500 for their services, which usually only include sending you an application to complete and send off to a loan servicer.

At Safe Harbor, all of our Personal Financial Services Program clients receive special additional services, such as our consolidation loan services, for very little or nothing in addition to their program. Student Loan Consolidation documentation services, for example, only cost $50(including the Public Service Loan Forgiveness Program).

So take the time and give us a call. Our advisors will pull up your loans, explain your options through consolidation in just a few minutes, and there is no obligation find out just how much you can save. Call today 1-855-569-4009.