3.) Any student loan won't do
The type of student loan will also determine whether or not it qualifies for loan forgiveness under the PSLF program. According to the Department of Education, only loans made under the Direct Loan Program - William D. Ford Federal Direct Loan - will qualify. Therefore loans made under the Federal Perkins Loan (FPL) and Federal Family Education Program (FFEL) will not qualify.
However, there is a work-around. Borrowers can consolidate these loans into the Direct Loan program to take advantage of the PSLF program. But keep mind, you should do your homework or speak with a financial advisor to determine whether consolidating will make sense for your unique financial situation.
4.) Do the math
Since the program allows for forgiveness after ten years, you should consider doing the math first. Selecting the best payment plan is essential. Obviously, if the borrower is repaying the loans subject to a ten-year standard repayment plan, subsequently there will be no remaining balances to be forgiven. However, other payment plans may extend payment terms. Although these plans allow for lower payments, they can also have higher accrued interest payments.
Again, take time to understand what payment plan works best for you. Also, get an understanding of the pros and cons of each payment plan. Most importantly, understand while this program may be a good fit for some it may not be the best fit for all.
For more information and to determine if you qualify, visit the
Federal Student Aid website
Remember: your choice, your future.
--Written for MainStreet by Kemberley Washington, a certified public accountant and professor. Follow her on Twitter or connect with her on Facebook.