Public Service Loan Forgiveness and Income-Based Repayment

The College Cost Reduction and Access Act is a complicated piece of legislation that, if you take advantage of it, can help you retire college and grad school debt early. Learn as much as you can about public service loan forgiveness so you can reap all the benefits entitled to you.

Income-Based Repayment (IBR)

Caps monthly direct and guaranteed (FFEL) student loan payments based on the borrower’s income and family size.

According to IBRinfo, “For most eligible borrowers, IBR loan payments will be less than 10 percent of their income – and even smaller for borrowers with low earnings. IBR will also forgive remaining debt, if any, after 25 years of qualifying payments.”

Besides taking out the right kind of loan to start with, it’s important to note that if you are married and file your taxes jointly with your spouse, your spouse’s income counts when calculating your monthly payment. Married borrowers can have their IBR payment based on their income alone if they file their taxes separately from their spouse.

Public Service Loan Forgiveness (PSLF)

Retires the Federal direct or guaranteed (FFEL) student loan debt of public service professionals who’ve been making ten years of qualified payments on their loans. Guaranteed (FFEL) loans are only eligible for PSLF if they are consolidated or reconsolidated into Federal Direct.

Counting as public service includes full-time paid work for:

  • 501(c)(3) nonprofit employment
  • Government (federal, state, local, tribal)
  • Military
  • Public school and most college employment
  • National and international service participation (like full-time AmeriCorps positions and Peace Corps — during which you can set it up to make monthly $0 payments).

You can put both of these new programs to work for you — so you can make income-based payments for ten years, and then retire your debt, if you qualify for participation.

Also note that it’s really all up to you to:

  • access the programs and
  • to keep track of your payment and employment records…so that you can prove your eligibility.

Resources to Help You

Many twists and turns exist in the path to understanding the new law as you try to take full advantage of these programs.

Below are some places to learn more:

Ask Heather Jarvis —

Heather Jarvis is a leading expert on student loan repayment and loan forgiveness.


Student Loan Borrower Assistance —

The National Consumer Law Center provides information about repayment options, avoiding and getting out of default, and dealing with collections agencies.