Student loan forgiveness program for government employees

Many federal jobs qualify for student loan debt repayment help up to $10,000 per year. Under 5 U.S.C. 5379, agencies may repay the student loans of federal employees in order to attract or keep highly qualified individuals. These repayments may not amount to more than $60,000 in total.

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In order to receive student loan debt repayment help, an employee must:
Higher Education Act
What student loans are eligible for forgiveness?
Will student loans be forgiven for public service?

Selection of employees to receive assistance with repaying student loans must be in accordance with merit principles. This authority is not an entitlement. As with any incentive, it is used at the discretion of the agency. If an agency chooses to use it, the agency will need to develop a plan that describes how it will be implemented within that agency.

People interested in participating in this program must contact the agency in which they work or wish to work for details.

Note: The Veterans Affairs Department operates several student debt repayment programs for its own employees with different terms. See www.vacareers.va.gov/Benefits/EducationSupport.

In order to receive student loan debt repayment help, an employee must:

sign a service agreement to remain in the service of the paying agency for a period of at least three years, unless involuntarily separated, and to repay all benefits received if separated for cause or poor performance; and
maintain an acceptable level of performance in order to receive continued benefits.

The repayment authority is limited to student loans authorized by the Higher Education Act of 1965 and the Public Health Service Act. These are federally insured loans made by educational institutions or banks and other private lenders.

Higher Education Act

The Higher Education Act covers guaranteed student loan programs such as: Stafford Loans; Supplemental Loans; Plus Loans; Federal Consolidation Loans; Defense Loans (made before July 1, 1972); National Direct Student Loans (made between July 1, 1972 and July 1, 1987); and Perkins Loans. Loans covered under the Public Health Service Act include: the Nursing Student Loan Program loans, the Health Profession Student Loan Program loans; and the Health Education Assistance Loan Program loans.

The level of academic degree for which a student loan was obtained is not a consideration in determining eligibility for this incentive. However, the loan must be made under the appropriate parts of the Higher Education Act of 1965 or the Public Health Service Act in order to be a qualifying loan for this incentive.

Also, loan repayments are only allowable for tuition paid to colleges or universities accredited by a nationally recognized accrediting agency or association recognized by the Department of Education.

Agencies may not use this incentive to retain employees who leave for positions in other federal agencies. Similarly, agencies may not use this incentive to recruit current federal employees from other agencies.

Note: The authority can be used to help pay off a student loan held by a parent for a child’s education, such as a Plus loan, if the parent is a federal employee. It cannot be used for such loans if the federal employee is the child, however.

The repayment is includible in the employee’s gross income and in wages for federal employment tax purposes notwithstanding the agency’s repayment of the loan directly to the lender.

See also, Government Employees Eligible to Have Student Debt Forgiven

The Office of Congressmember Karen Bass has consolidated information on the current Public Service Loan Forgiveness program, as well as on the President’s recent announcement on student loan cancellation:

Important Links

Borrowers can apply for up to $20,000 in student loan debt relief now here or aquí.
For an income driven repayment plan before your payments restart, click here.
If you don't know what kind of student loan you have, click here.
If you have worked in public service in federal, state, tribal, or local government or for a non-profit organization, you may be eligible to have some of your federal student loan debt forgiven, thanks to temporary changes to the Public Service Loan Forgiveness (PSLF) program. Under this limited waiver, borrowers can receive credit for payments that otherwise would not have qualified for PSLF. Apply by October 31, 2022 for a PSLF waiver here.
For help with individual questions, you can call the Department of Education Federal Student Aid Call Center: 1-800-4FED-AID (1-800-433-3243)

President’s Announcement on Student Loan Forgiveness

On August 24, President Biden announced the Administration will cancel up to $20,000 in student debt for Pell Grant recipients and up to $10,000 in student debt for non-Pell Grant recipients. This relief will be available to borrowers earning less than $125,000 annually or households earning less than $250,000 annually. You may use this link to apply now through December 31, 2023.

The expected timeline for relief after completing the application is 4-6 weeks. As previously indicated in media outlets, approximately 8 million borrowers will receive relief automatically since the Department of Education (ED) already has their relevant income data. However, borrowers can still complete an application if they are unsure whether ED has their income data. The Department is advising borrowers to apply before November 15th to receive relief before the end of the payment pause but will continue to process applications after payments resume. These details along with frequently asked questions are laid out on the FSA website here or aquí.

Additionally, information regarding the payment pause extension, including information about requests for refunds for payments made during the payment pause, can be found here.

Public Service Loan Forgiveness program

If you are a government employee or employed by a not-for-profit organization for more than 10 years, you may be eligible to have some of your federal student loan debt forgiven, thanks to temporary changes to the Public Service Loan Forgiveness (PSLF) program. Under this limited waiver, borrowers can receive credit for payments that otherwise would not have qualified for PSLF. However, time is running out to take advantage of this tremendous opportunity. Borrowers with federal student loans have until October 31, 2022, to apply for PSLF and/or consolidate non-Direct federal student loans to get the benefit.

This waiver applies even if you did not make the payment on time, pay the full amount, or if you were on the wrong repayment plan. It also applies to loans that typically do not qualify for PSLF, including Federal Family Education Loans, Federal Perkins Loans, Federally Insured Student Loans, National Defense Student Loans, and more. Please check your eligibility before it’s too late and tell your family members and friends who may be eligible to check their status as well. Visit www.pslf.gov for more information and to apply for forgiveness. Apply for a PSLF waiver here.

Potential Scams Related to the Student Debt Relief Plan

Recently, the Federal Trade Commission (FTC) issued an important Consumer Alert to help people avoid potential scams related to the recently announced Student Debt Relief Plan. The FTC wants the public to know that access to the loan forgiveness program is free. Anyone claiming to be able to sign people up for the program, get them in early, or guarantee eligibility is a scammer. Never pay someone who promises early or special access, or guaranteed eligibility for the program. Those are scams and should be reported at ReportFraud.ftc.gov.

Make sure you work only with the U.S. Department of Education and their loan servicers, and never reveal your personal information or account password to anyone. Emails to borrowers come from , , or .

Listen to a telephone town hall with student loan debt experts here:

What student loans are eligible for forgiveness?

Generally, most federal student loans qualify for forgiveness, including Pell Grants, government-owned FFEL loans, and Direct Loans such as Parent PLUS and Grad PLUS loans. Certain loans from the Federal Perkins Loan Program and FFEL loans with private lenders are excluded. All private student loans are also excluded.

Will student loans be forgiven for public service?

If you have worked in public service (federal, state, local, tribal government or a non-profit organization) for 10 years or more (even if not consecutively), you may be eligible to have all your student debt canceled.