Student Loans: Will Public Service Forgiveness Apply If You Leave the Job?

Happy elementary school teacher giving high-five to her student during class in the classroom.
Drazen Zigic / Getty Images/iStockphoto

One of the biggest topics of 2022 has been student loan forgiveness. It hit a fever pitch in August when the White House announced a huge step in trying to mitigate the looming financial crisis for 45 million borrowers that owe a combined $1.6 trillion by offering one-time relief payments of $10,000 ($20,000 for Pell Grant holders).

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However, the initiative soon was hit with roadblocks as a federal court judge ruled the Biden administration’s move illegal and prevented the program from moving forward. While this plays out in the courts — and borrowers wait with bated breath for answers — there is another viable option for student loan forgiveness for many people, the PSLF program. The PSLF (or public service loan forgiveness) program provides cancellation of federal loans after a certain period of time for many holding public sector positions.

As GOBankingRates previously reported, there are several kinds of employment that fall under this umbrella, including active or veteran military members, public school teachers, first responders, postal workers and others.

Per the Federal Student Aid division of the U.S. Department of Education, it’s said that “the PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.”

If You Leave Your Public Service Job, Do You Still Qualify For PSLF?

But, what if you leave your public service job — will you still be able to qualify for the PSLF plan?

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Forbes spoke to student loan expert Mark Kantrowitz, who said if your leave from the public service sector is temporary, you’re still in luck since “the 120 qualifying payments do not need to be consecutive.”

That means that any payments already established and credited towards the 120 needed for the PSLF program will remain intact and eligible. If you then resume working in the public service field, any payments from that point on will also count towards that 120-credit benchmark.

For example, if you were working as a public school teacher for eight years and made 96 student loan payments, those would remain in your balance. If you then decided to become a personal trainer for a few years, any student loan payments during that time would not count. But, if you resume teaching in a public school after that time, you’d need to make 24 more student loan payments to then fully qualify for the forgiveness.

The other thing to keep in mind, said Kantrowitz, is during the interim you are not working in a public service field, “any payments you make on the student loans will reduce the loan balance and thereby reduce the amount that will eventually be forgiven if you return to a public service job.”

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More: How the Student Loan Payment Pause Is Benefiting Borrowers Currently Eligible for Forgiveness

The bottom line, according to Forbes, is that “leaving public service won’t automatically disqualify you from achieving loan forgiveness through PSLF,” but doing so “could seriously set back your student loan payoff timeline if you decide to switch industries or make a big career change.” That being said, it’s worth it to weigh your options if offered a new career opportunity. For example, if the new job represents a huge salary jump, it might still be worth it to make the move.

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About the Author

Selena Fragassi joined GOBankingRates.com in 2022, adding to her 15 years in journalism with bylines in Spin, Paste, Nylon, Popmatters, The A.V. Club, Loudwire, Chicago Sun-Times, Chicago Tribune, Chicago Magazine and others. She currently resides in Chicago with her rescue pets and is working on a debut historical fiction novel about WWII. She holds a degree in fiction writing from Columbia College Chicago.
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