Jeffrey Wolfe graduated from Ohio University in 2011 with $110,000 in student loan debt after pursuing a master’s degree program in music therapy.
When he scored his “dream job” as director of music therapy for the Institute for Therapy through the Arts in Chicago, he discovered there was one other big perk.
Because the organization is a 501(c)(3) not-for-profit, he was eligible for the Public Service Loan Forgiveness Program: a federal program that forgives the remaining balance on federal direct student loans for individuals who make 120 on-time monthly payments — or for 10 years — and work full time for a qualifying employer.
“As long as you make payments for those 10 years, the rest is going to be wiped out, and that’s a beautiful thing,” he says. “That’s actually a very affordable education.”
[Get six true answers about public service student loan forgiveness.]
Although the 2018 White House budget calls for cutting the program, education officials have said it would only affect people taking out loans on or after July 1, 2018 — if it gets axed at all. Congress would still have to act on the proposal, either in its current form or with modifications, such as a cap.
Experts say supporters should still be optimistic about the future of the program, given that it has bipartisan support and popularity among a wide spectrum of constituencies. It was enacted in 2007 under then-President George W. Bush.
“I think that this is a time when students and borrowers who have graduated should be optimistic about the program’s future,” says Isaac Bowers, director of law school engagement and advocacy at Equal Justice Works, a nonprofit that works with public interest lawyers. “It is not certain at all that any capping or elimination will occur.”
For those pinning their hopes on the program, you can take three steps now to try to make sure you qualify.
“Public service loan forgiveness is not a give away,” Bowers says. “It is a program for people who are dedicating their careers, or a substantial part of their careers, to public service, and you do have to do that full-time , paid work for a qualifying employer.”
[Discover three surprising student loan repayment facts.]
Step 1: Take Out or Consolidate into Federal Direct Loans
The first step to Public Student Loan Forgiveness is when someone is still in school. Only federal direct loans are eligible. Older loans, such as those under the Federal Family Education Loan program or the Perkins loan program, do not qualify but may become eligible if you consolidate them into a direct loan.
However, only payments made on the newly consolidated loan will be counted toward the 120 payments that the program require s .
For Wolfe, this meant consolidating his direct loans with loans serviced through Student Assistance Foundation. Wolfe says he made an initial mistake of not including all his loans on the consolidation application because he didn’t know where to look. He found out that even small mistakes can be costly; it took him more than a year and countless phone calls to resolve the error with his servicer, FedLoan Servicing, he says.
You can find all your federal loans by logging into My Federal Student Aid. Generally, direct loans will have “direct” in the name.
Step 2: Enter an Income-Based Repayment Plan
You must make your payments through a qualifying repayment plan. These include all income-driven repayment plans — plans that base your monthly payment on your income — and include the income-based repayment, income-contingent r epayment plan, Pay as You Earn and Revised Pay as You Earn.
“There are repayment programs such as a ‘ graduated ‘ or ‘ extended ‘ repayment,” says Natalia Abrams, executive director of the non profit organization Student Debt Crisis. “Those don’t count. So you need to make sure you’re in correct repayment.”
[Check out three tips for securing student loan forgiveness.]
Step 3: Make Sure You’re Working for a Qualified Employer
Qualified employers include government organizations at any level, not-for-profits that are tax-exempt under section 501(c)(3) of the tax code and certain other types of not-for-profits. Volunteering with AmeriCorps or Peace Corps also qualifies.
Because there’s no formal enrollment into the program — the first qualified applicants will hit 120 payments in October this year — experts recommend that current borrowers submit an employment certification form to the Department of Education each year for an “initial determination” that their employer qualifies.
Bowers says there are two advantages to this: The Department of Education will keep track of your progress toward forgiveness , and it will let you know if you’re doing something wrong, such as not being on a qualified repayment plan.
“The good thing about the employee certification form is that once you send it in, if you’re not in the right programs, you will get denied, but at least you will know,” Abrams says.
Wolfe says that when his employer was going through a reorganization in 2015, it was important to him and some of his colleagues that it remain a nonprofit.
“Being able to qualify for public student loan forgiveness, that’s an employee benefit,” he says.
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Prepare Wisely for Public Service Loan Forgiveness originally appeared on usnews.com
