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Many people want to go into public interest work, but worry about how to repay expensive student loans. If you work for the government, you may be eligible for tens of thousands of dollars in student loan forgiveness for federal employees.
See what programs you may qualify for, how much money you could get for your student loans, and how to apply for forgiveness.
- Student loan forgiveness programs for federal employees
- What if I need more help paying off student loans?
Student loan forgiveness programs for federal employees
Federal employees can take advantage of many different programs designed to help people repay their student debt.
Some of these programs are open to any qualified borrowers, including those who work for eligible nonprofits as well as the federal government. These options include:
- Public Service Loan Forgiveness
- Perkins Loan cancellation
In addition to these options, though, there is also a special program just for individuals who work for the federal government — the federal student loan repayment program. While your loans aren’t forgiven through this program, your government employer will help you repay all or a portion of your debt.
Federal student loan repayment program
Under this program, the federal agency you work for will repay up to $10,000 per year of eligible federal student loans, including:
- Direct Loans, including Direct Subsidized and Unsubsidized Loans, PLUS Loans, and Direct Consolidation Loans
- Federal Family Education Loans (FFEL)
- Perkins Loans
- Loans made or insured under the Public Health Service Act, including loans for disadvantaged students, primary care loans, nursing student loans, and health education assistance loans
The maximum amount you can have repaid under this program is $60,000. However, employees must also make a three-year service commitment to a federal agency in order to be eligible for any repayment help. If you quit or are fired before your service is complete, you may need to repay any loan money you received.
Federal agencies determine who is eligible for federal employee student loan forgiveness, but in general, the program is open to highly qualified candidates and current employees.
There is no specific application, but the Office of Personnel Management instructs current employees or potential candidates to contact their employing agency for further information, as each agency has its own implementation rules.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is another avenue through which federal employees can earn student loan forgiveness. It’s not restricted to just federal employees, though — anyone who works for a qualifying employer can benefit from it.
The program is available to borrowers with Direct Loans who work for an eligible nonprofit or federal, state, or local government agency. To qualify, you must work full time and make 120 on-time payments under an income-driven repayment plan. After you complete your 120 payments, any remaining balance of your eligible federal loans can be forgiven.
You will need to apply for this program, which you can do by using the Public Service Loan Forgiveness help tool. If your employer qualifies, you’ll use this same tool to certify your employment each year and, once you’ve met the requirements, apply for loan forgiveness.
What to do if you need more help paying off student loans
Taking advantage of these options for student loan forgiveness can be helpful in repaying eligible federal loans, but you may still need some extra assistance. That’s especially true since you’re still responsible for making your monthly payments while you work toward loan forgiveness.
Thankfully, there are a number of options you can use, including:
- Research non-government loan assistance: Look for other loan repayment assistance programs, which may be offered through schools or public or private organizations — especially if you’re doing public service work or are employed in health care, law, or teaching.
- Change your repayment plan: Income-driven repayment plans are required if you want to qualify for Public Service Loan Forgiveness. However, income-driven plans also enable you to set your monthly payment based on a percentage of your income — a potentially useful strategy if your payments are too high.
- Refinance student loans: This could be a good option for private student loans, which aren’t eligible for income-driven payment plans or most loan forgiveness or repayment assistance programs. Refinancing your loans can reduce your interest rate, which can lower both your monthly payment and total payoff costs in some circumstances. Be cautious refinancing federal loans, though, as doing so means you’ll lose access to all federal loan benefits.
The right option for you will depend on what loans you have, as well as the type of assistance you need and the kinds of programs you’re eligible for based on your job and income.
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Frequently asked questions
Do federal jobs pay off your student loans?
With some federal jobs, you may be eligible for the federal student loan repayment program. This program provides payment for up to $10,000 of eligible federal loans each year, with a maximum payout of $60,000 total. You will need to make a three-year service commitment.
Government workers with eligible loans may also qualify for Public Service Loan Forgiveness, which will forgive any remaining debt after you make 120 payments while working for a qualifying employer.
Can you negotiate student loan repayment assistance with a federal agency?
You can ask the agency you are employed by, or are interested in working for, if you might qualify for the federal student loan repayment program. The Office of Personnel Management recommends discussing eligibility directly, as each agency must develop a plan regarding how it will implement this repayment assistance.
Can you double-dip into PSLF and other forgiveness programs?
It may be possible to qualify for both PSLF and other forgiveness programs. For example, you could qualify for both PSLF and the federal student loan repayment program, assuming you’re eligible for both. But depending on how loan assistance is applied to your student loans, it may not count toward the 120 required payments for PSLF.
Check out Federal Student Aid for more information, or contact the administrators of your forgiveness programs.