Summary: Equal Justice Works Student Debt Relief Webinar Series
In May 2009, Equal Justice Works presented a webinar series covering the types of employment, loans and payments that qualify for Public Service Loan Forgiveness under the College Cost Reduction and Access Act (CCRAA).
Here are some highlights from the webinar. Listen to a podcast of the program.
- Employment qualifying for public service loan forgiveness under the CCRAA includes: government (local, state and federal but not U.S. Congress members); 501(c)(3) non-profits; AmeriCorps; Peace Corps, and private "public service organizations" *.
* This includes employees who provide "public interest law services" for a "public service organization". Public interest law refers to legal services provided by a "public service organization" funded at least in part by a local, state, federal or tribal government and is not organized for profit, a labor union, a partisan political organization, or an organization engaged in religious activities.
- Employment must be full-time and paid (not volunteer). Under CCRAA, full-time employment is working one or more jobs for at least 30 hours per week on average; a contractual or employment period of at least eight months with an average of 30 hours per week (includes teachers with summers off); and meeting the employer's standard of full-time employment (unless the qualifying employment is with two or more employers).
- Under the current CCRAA definition, government contract workers do not qualify.
- Military service qualifies.
For complete details, please see Equal Justice Works' qualifying public service employment summary: www.equaljusticeworks.org/files/qualifying_employment.pdf.
- ONLY Federal Direct loans are eligible for Public Service Loan Forgiveness. Most federal student loans (Stafford loans and GradPLUS loans) come from one of two major federal student loan programs: the Federal Family Education Loan (FFEL) program or the Federal Direct loan program. Private banks and lending institutions such as Sallie Mae, Access Group and Citigroup issue FFEL program loans. Federal Direct loans are federal student loans issued directly by the U.S. Department of Education. Most schools participate in one or the other federal student loan program.
- FFEL loans can be consolidated into Federal Direct loans and made eligible for public service forgiveness. The CCRAA provision creating the right to reconsolidate went into effect July 1, 2008.
- If FFEL loans were already consolidated, they may be reconsolidated into Federal Direct loans.
- Parent PLUS loans are not eligible.
- Commercial loans borrowed from state or private lenders are not eligible for public service forgiveness.
- Both undergraduate and law school loans are eligible if consolidated into Federal Direct loans.
- Perkins loans are eligible if included in the Federal Direct consolidation, but because Perkins loans have their own cancellation provision, this may not be beneficial. (Determine this by using the calculator under MORE RESOURCES.)
For more information, view Equal Justice Works' eligible loans summary: www.equaljusticeworks.org/resources/student-debt-relief/public-service-loan-forgiveness/eligible-loans.
To determine the types of loans you have, (1) request a PIN from the Dept. of Education ( www.pin.ed.gov); and (2) look up your federal student loans in the National Student Loan Data System ( www.nslds.ed.gov).
After July 1, 2009, contact your lender directly to sign up for the Income-Based Repayment plan.
- The CCRAA's Income-Based Repayment plan is the plan of choice for public service forgiveness. The plan caps the amount a borrower can be required to pay on federal guaranteed student loans annually. Under this plan, minimum monthly payments are required for maximum forgiveness. This plan is available in July 2009. Repayments are capped at 15% of discretionary income. To take advantage of this repayment option, borrowers must demonstrate partial financial hardship.
- Other repayment plans that qualify for public service forgiveness: Income-contingent and standard 10-year repayment plans.
- Repayment plans that do not qualify for public service forgiveness: payments made when not in qualifying full-time public service employment; payments made toward non-qualifying loans (FFEL, commercial loans, etc.); payments made under fixed term repayment plans swith terms of more than 10 years (ex. 15, 20, 30 year repayment plans); late payments; and payment made while in default..
- Borrowers must make 120 qualifying payments to be eligible for public service forgiveness.
- Private loans do not count toward partial financial hardship status.
For complete details, visit Equal Justice Works' qualifying payments webpage: www.equaljusticeworks.org/resources/student-debt-relief/public-service-loan-forgiveness/qualifying-payments.
- Calculators and other tools: See which repayment plan is best for you.
- Income-Based Repayment Email Updates: www.IBRinfo.org
- Student Debt Forum: Post questions and discuss concerns with other borrowers on Equal Justice Works' website
- Public Service Loan Forgiveness Checklist
- Apply for Federal Direct loan consolidation: www.loanconsolidation.ed.gov/