Personal Finance

The government may forgive your student loans if you meet these demands

Key Points
  • Directions are now out for how people previously rejected for public service can reapply.
  • But you need to have been denied for the "right" reason and still meet many other requirements.
Public service employees have another chance at loan forgiveness
The government may forgive your student loans

Your application for public service loan forgiveness was denied? You're far from alone.

Now the Department of Education has issued directions for some student loan borrowers who work in public service jobs to reapply for a second chance at debt relief.

Congress authorized the $350 million "fix" to the popular, yet challenged student loan program in its March spending bill. The Department of Education was given 60 days to put out an application.

It may soon be easier to declare bankruptcy on your student loans
It may soon be easier to declare bankruptcy on your student loans

Now it has come out with one, dubbed the "temporary expanded public service loan forgiveness" opportunity.

Don't let the word "expanded" get your hopes up, though. The second chance is available only to people who still meet several demands.

The (many) qualification requirements

The U.S. Capitol in Washington, DC.
Getty Images

First, to apply you still need to have made the 120 qualifying and on-time payments under the program and have already been rejected for public service loan forgiveness.

But not all those rejected can apply — only those borrowers who were initially denied because of their repayment plan. Specifically, if you were deemed ineligible because you were enrolled in a graduated or extended loan repayment program instead of an income-driven one, you should reapply.

One important note: Your most recent payment on whatever plan you were in, as well as your payment made 12 months ago, must be as much as you would have paid on the income-driven repayment plan.

If you learn your payments were too low, you might consider switching into an income-driven repayment plan and reapplying for the fix-it fund in a year. The Department of Education warns, however, "This opportunity is temporary, has limited funding, and must be provided on a first come, first served basis."

Other technical reasons that commonly lead to disqualification remain.

You still need to have a loan from the federal direct program — not a Federal Family Education Loan, Perkins loan or any kind of private loan.

The program also has a narrow definition of a public service worker: generally someone employed by the government or a 501(c)(3) organization.

If you're unsure whether your employer qualifies, you can fill out the Department of Education's employer certification form to find out.

How to apply 

Sadeugra | Getty Images

If you're one of those lucky people who meet all of the above requirements, you'll want to send an email to FedLoan servicing — the agency that handles public service loan forgiveness — as soon as possible.

Include your name and date of birth in your email to Simply state that you request the Education Department reconsider your eligibility.

If you don't meet all those requirements, you can try to switch into an income-driven repayment plan or finish the 120 payments and then go through the process of getting formally rejected from Fed Loan, and then reapply for the fix-it fund — so long as it hasn't run out.

More from Personal Finance
These are the ways student loans stop people from buying a house
Student loan nightmare: Some borrowers have to start over
People with massive student debt hope Trump will let them declare bankruptcy