October 17, 2019

By Ana Helhoski, MarketWatch

Pursuing student loan forgiveness entails a decade of meticulously recorded payments, hours on hold with your servicer and infinite patience. Success, however, arrives without much fanfare.

Public defender Shelly Tomtschik was in court when she got the email notifying her that the quest was over:

“Congratulations! After final review of your Public Service Loan Forgiveness (PSLF) application and payment history, we have determined that you have successfully made the required 120 monthly payments in order to have the loans listed below forgiven.”

“It wasn’t hitting me,” says Tomtschik, 40, of Baldwin, Wisconsin. “I thought it would be more official or something.”

Tomtschik is among the first federal student loan borrowers to get their loans canceled tax-free through the federal Public Service Loan Forgiveness program. The program, launched in 2007, forgives any outstanding balance after 120 qualifying payments for borrowers who take traditionally lower-paying public service jobs.

But the process is tricky. Just 864 of the 88,006 applications filed had been approved as of March 2019, based on the most recently available data from the Education Department. The average amount forgiven: $59,244.
What it takes to get public student loan forgiveness

To qualify for PSLF, borrowers must make 120 monthly, on-time payments while working full time in public service for a qualifying employer. You also must:

Ensure you have only federal direct loans. Some borrowers will need to consolidate into a direct loan. Private loans aren’t eligible.

Enroll in an income-driven repayment plan. Your payments will be a portion of your discretionary income.

Make sure your loans are serviced by FedLoan Servicing, the only company that processes PSLF applications. You can do this by submitting an employer certification form.

Submit employer certification forms to prove you worked for a qualifying government or nonprofit employer while making all 120 payments.

Apply while you’re still working for an eligible employer.

Tomtschik and another successful applicant, Bonnie Svitavsky, a librarian in Washington state, might add another requirement: Document everything.

Svitavsky, a 38-year-old supervising librarian at Pierce County Library, made payments for two years before she found they wouldn’t count toward PSLF. That’s because her loans weren’t enrolled in an eligible repayment plan.

“It was disappointing, to say the least,” she says.

To avoid any future surprises, Svitavsky set alarms to submit certification forms and logged the details of calls to FedLoan.

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