Office of the Vice President for Global Communications

Monday, July 23, 2012

Some college loans may be forgiven for public service workers

U-M employees and students working in or considering a career in public service may qualify to have the remaining balance on eligible federal student loans forgiven through the federal Public Service Loan Forgiveness (PSLF) program.

College financial aid offices around the country are reminding their constituencies about this program, which generally is available to borrowers who are making reduced monthly payments through Income Contingent, Income-Based or Standard repayment plans and who will have a balance on a loan after making 120 on-time monthly payments (10 years). They must be employed full-time in their public service job while making the payments.

PSLF was created in 2007 by the College Cost Reduction and Access Act, designed to encourage individuals to become employed full time and continue to work in public service jobs. Because of the 10-year window of required repayment, the first group of borrowers to experience loan relief will be in October 2017.

Students considering public sector jobs, former students who are employed by a public service organization, or current public employees could benefit from the program. This includes those employed full time by municipalities, local and regional school districts and colleges and universities.

Parents who borrowed through the federal PLUS loan program for dependent students, could also be considered if the parent borrower is working in a public service job.

"Borrowers who are employees of the university, as well as students, past students and parent borrowers who might receive some loan relief should look at this program," said Pamela Fowler, executive director of the Office of Financial Aid and chair of the National Association of Student Financial Aid Administrators. "In this time of economic hardship and struggle, this is a program that could potentially help families."

To qualify, borrowers must not be in default for any of the eligible federal loan types. The Federal Direct Loan Program includes Subsidized and Unsubsidized Direct (Stafford); Direct PLUS loans for parents and graduate students; and Direct Consolidation Loans. Loans made under other federal programs, including Federal Family Education (FFEL), Perkins or some health professions and nursing loans may be consolidated under the Direct Loan program and could qualify for the forgiveness program.

Borrowers may go to for information about what types of loans they have outstanding and their loan servicer information (a federal PIN is required to access loan accounts).

For details about qualifying for the Public Service Loan Forgiveness program, including a list of eligible jobs, visit the U.S. Department of Education's Public Service Loan Forgiveness website or contact the U-M Office of Financial Aid at 734-763-6600.