Public Service Loan Forgiveness Application is LIVE!!

This is a big time in student loan land. This week the official application for Public Service Loan Forgiveness (PSLF) is out! You can find the application here.

“I have big student loans I want to be forgiven, what does this mean for me?”

Well, if you entered the PSLF program right when it opened up in October 2007, and have been on a qualifying repayment plan (PAYE, REPAYE, IBR, ICR) there’s a chance you could be making your 120th qualifying payment soon and are ready to submit for the forgiveness of the remaining balance.

However, for most people, this is not likely. Most people have entered the program later on and may still have some time until they are ready to submit for forgiveness.

Here’s the good news…

In all honesty, we didn’t even know if any of this would be happening. Until now, there was never even an application. Just stated requirements.

It's been a 10-year window of hope until you can get your loans forgiven and has had a lot of people taking big risks and potentially lower paying jobs in the public service sector banking on this all coming through.

It still remains to be seen how long the processing time will be until all balances say $0.

But, even though no one’s loans have been ‘officially’ forgiven from PSLF yet, the application and defined requirements bring a big breath of relief to many hopefully borrowers.

What if you don’t work in public service? Can I still get my loans forgiven?

Sure, you can. You will just be on a 20 or 25-year forgiveness timeframe. Today may be that halfway point.

The big difference between the two programs is that with PSLF, the complete remaining balance is forgiven TAX-FREE.

If you choose the longer term forgiveness programs, as of now, the balance forgiven will be taxable income.

Does that sound scary?

It could be, but it is also expected that by the time the second round of student loan forgiveness comes in, that Congress will enact something to help current borrowers.

With 44 million borrowers currently and $1.4 trillion of outstanding education loans, this could be a huge impact on the economy.

There is also talk of President Trump implementing a new forgiveness plan so we will see how that goes.

The big question for many borrowers is if they should pursue forgiveness or simply sacrifice for a few years and pay off the debt.

A general rule of thumb is that if you can pay off the debt in less than 5 years, it may make sense to do so. But, if you’re in a situation where it doesn’t seem like the math on paying off will ever make sense, then maybe the best idea is to go after the most forgiveness possible and take what money you can to invest in your current situation.

If you should need help figuring this whole thing out, what direction to take, what student loan forgiveness program to pursue, how to save for an emergency fund, house or even a vacation next year, set up a free consultation with me personally at kisplanning.com/apply.