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August 10, 2014

Only Direct Loans Are Eligible for Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) is available for Direct Loans ONLY.  If you have older federal loans from the FFEL Program, Perkins loans, or Health Professions Student Loans, you may consolidate those into a Direct Consolidation Loan (which is eligible for PSLF) and then start making payments towards forgiveness.  Any payments you may have made on the ineligible loans before they were consolidated into Direct do not, cannot and will never count toward the required 120 qualifying payments. Sorry.  I don’t make the rules, here.

Also, Perkins Loan borrowers should be aware that certain cancellation and other benefits available under the Perkins Loan Program would be lost if you choose to consolidate.

Sadly, joint FFEL Consolidation Loan borrowers are not permitted to reconsolidate into a Direct Loan so joint FFEL Consolidation Loan borrowers just plain can’t get PSLF.  That stinks.

Private and other nonfederal education loans can be icky; for example, they are not eligible for PSLF.  Defaulted Direct Loans are not eligible for PSLF but may become eligible for PSLF if you cure the default by consolidating or rehabilitating the loan.

By Heather | Category: Public Service Loan Forgiveness  
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