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How do I know if my Employer is Eligible Public Service Loan Forgiveness?

The Department of Education has several great resources for verifying is your employer is eligible for the PSLF program.

Written By: Michael P. Lux, Esq.

Last Updated:

How do I know if my Employer is Eligible Public Service Loan Forgiveness?

The Department of Education has several great resources for verifying is your employer is eligible for the PSLF program.

Written By: Michael P. Lux, Esq.

Last Updated:

This week we received an email from Dave, who is concerned his employer may not be eligible for Public Service Loan Forgiveness (PSLF). Today we will discuss how to determine PSLF employer eligibility and specific steps to take. If you have a question for the Sherpa, feel free to ask us.

Regardless of whom you work for, the best way to determine if your employer is eligible for PSLF is to submit an employer certification form. Borrowers who complete the employer certification form will receive a count of the number of qualifying payments they have made towards the required 120.

People like Dave, who are worried that their employer might not be eligible, may need to take a couple of extra steps to protect themselves going forward.

A New Shortcut – The Department of Education PSLF Help Tool

When this article was first written, people like Dave had to do a bunch of research into employer eligibility for PSLF.

The Department of Education recently made employment verification much easier. Using the PSLF Help Tool, borrowers can verify employer eligibility and generate the necessary form that needs to be completed.

According to the Department of Education, the process takes about 30 minutes. Borrowers will need their FSA ID and a W-2 or Federal Employer Identification Number (EIN) from their employer.

Dave’s Email About PSLF Employer Eligibility

Hi Sherpa,

Fellow attorney here…and I’m flummoxed.

While my question might seem highly specialized, I still think it could be more broadly helpful.

Anyway:

I’m hoping to continue making qualifying payments for PSLF at my new job at the Tennessee Education Lottery Corporation (TEL). TEL was created by statute in Tennessee as “a body, politic and corporate, and a quasi-public instrumentality, and not a state agency or department, which shall be deemed to be acting in all respects for the benefit of the people of the state through the operation of a state lottery and in the performance of other essential public functions entrusted to it.” TCA 4-51-101(c).

What the hell is a “quasi-public instrumentality?” And is it a “governmental entity” for the sake of PSFL?

To attempt to answer my own questions, the only definition to the phrase “quasi-public instrumentality” in TN statute comes in TCA  4-39-101, which provides chapter definitions for Payment of Taxes by State Vendors and Subcontractors.  

“As used in this chapter:

(3)  “State governmental entity” means a state agency, department, board, or commission, or a public corporation or quasi-public instrumentality that performs essential public functions entrusted to it by the state; and”

Should I start celebrating that my work for the Lottery, a “quasi-public instrumentality” in TN, indeed qualifies for PSLF? Quasi-public instrumentality = state governmental entity under the law, right? Or am I being a first-year law student stretching on an exam?

I think there’s meat on the bone with questions about “quasi-public instrumentalities,” even if my question might be a little specific for the general audience that finds your site.

Thanks for taking the time,

Dave

Answering Dave’s Question

Dave writes with a highly technical legal question. If he were to initiate a lawsuit against the Department of Education, the laws cited might become relevant. Fortunately, for both Dave and the average borrower, a complicated legal analysis is not usually necessary to resolve Public Service Loan Forgiveness Questions.

Employers Eligible for Public Service Loan Forgiveness (PSLF)

Three employer types qualify as public service:

  • Government – Including Federal, State, and Local
  • Non-Profits – 501(c)(3) Organizations
  • A Private Not-For-Profit Organization – Must have one of the following public service activities as the primary purpose:
    • (1) emergency management,
    • (2) military service,
    • (3) public safety,
    • (4) law enforcement,
    • (5) public interest legal services,
    • (6) early childhood education,
    • (7) public service for individuals with disabilities and the elderly,
    • (8) public health,
    • (9) public education,
    • (10) public library services,
    • (11) school library services, or
    • (12) other school-based services.

How Do I Know If My Employer Qualifies?

People in Dave’s position who are not clear if their employer is eligible for Public Service Loan Forgiveness (PSLF) should submit an employer certification form. This form is available on the Department of Education’s website and must be completed by your employer. We recommend anyone pursuing PSLF submit this form every year to ensure the records stay up to date.

Once submitted, the form will be reviewed for verification that your employer qualifies as a public service employer.

Not only with the Employer certification form help you verify that your employer is eligible, but it is also confirms that you are on an eligible repayment plan and that your loans are eligible. Successful form submission will result in FedLoan servicing sending a letter explaining how many qualifying payments you have made towards PSLF. Once you get to 120 certified payments, your loans will be eligible to be discharged.

Does My Old Employer Count Towards Public Service Loan Forgiveness?

Because there isn’t a requirement to “enroll” in PSLF, old employment can be certified and count towards PSLF.

The challenge with prior employers is getting the necessary paperwork signed. For this reason, the sooner you can get your documents submitted, the better.

Strategy Limitations

The steps we have outlined so far constitute what we would consider to be the “best practice” for verifying employer eligibility. However, successful completion of these steps does not guarantee public service loan forgiveness eligibility. Recently, a lawsuit was initiated by four attorneys who received multiple employer certifications from their loan servicer. They were on track for Public Service Loan Forgiveness, but then the Department of Education changed its mind about their qualification under the 3rd definition of public service. Not only were they told their employer didn’t qualify, but the Department of Education retroactively rejected previously certified payments.

If you work for a 501(c)(3) organization or the government, this specific issue isn’t much of a concern. However, borrowers with some ambiguity about their eligibility should follow the case closely.

Don’t Ignore Other Forgiveness Opportunities: Public Service Loan Forgiveness is the most popular forgiveness program, but many other forms of federal forgiveness are available

We suggest that borrowers in this situation create a savings account or conservative investment account to set aside money for a potential PSLF issue. If, for some reason, these borrowers cannot qualify for PSLF, funds are available to pay off the debt aggressively. The saved money will likely earn less interest than the loans generate, so things won’t break even, but it is a good way for borrowers to protect themselves. If PSLF ends up working out, the money is a great head start for a downpayment on a house or retirement.

Bottom Line: Verifying Employer Eligibility for Public Service Loan Forgiveness is Easy

Figuring out whether or not you qualify for Pubic Service Loan Forgiveness should not require a law degree.

For the vast majority of borrowers, it is as simple as submitting a form.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

20 thoughts on “How do I know if my Employer is Eligible Public Service Loan Forgiveness?”

  1. If I worked at two different nursing homes would they both qualify or do you have to have employment at one place for 10 years?

    Reply
    • You do not have to work at the same place for 10 years.

      However, I’d encourage you to submit employer certification forms (ECFs) for both employers as soon as possible. Nursing homes are tricky because some may be eligible and others might not. The best way to find out is the ECF.

      Reply
  2. Hi,

    My children will graduate college soon, and will be looking for jobs. Is there a way to search for qualifying employer? (especially if it allows you to filter by zip code, industry, etc.)

    The PSLF help tool expects you to have the EIN for a specific employer in hand. Thats good for people who already have a job, but it doesn’t help people like us who want to find a qualifying employer

    Thanks!

    Reply
    • Hi Scott,

      That is a great question. USAJobs.gov is a great tool for finding federal government jobs, but I’m not aware of any job search tool exclusively for PSLF jobs.

      A good rule of thumb is that government employers are eligible, as are 501(c)(3)s, but contractors employed by these organizations are not. I think asking about PSLF eligibility during the interview process would be a totally appropriate question.

      Best of luck to you and your kids!

      Reply
  3. I drive school bus for a company that is contracted through the federal government. I have to complete a physical every two years and receive a federal medical certificate. does this require me as public service employee?

    Reply
    • Federal contractors are tricky. If your employer is the federal government, you are definitely PSLF eligible. If your actual employer is a private for-profit company, you are not. The important detail on PSLF eligibility is not the work you do, but who your employer is.

      If you think there is even a chance you qualify, I’d suggest using the Department of Education PSLF Help Tool. It will help verify your status for certain.

      Reply
  4. My wife works in Healthcare, and as far as we know her employer is not a non-profit. However her employer is in partnership with the State of Maine to provide healthcare services to residents. Her employer is listed on the State Dept of health website as a partner as the State doesn’t provide the service directly. Essentially her employer is contracted to provide healthcare services for people who qualify for Medicare, medicaid, etc etc. The State pays her employer, not the clients/patients. Would she potentially qualify for PSLF?

    Reply
    • Based on what you are saying, I think it is unlikely that she qualifies.

      However, given how much money could be saved by PSLF, it is worth spending a few minutes to investigate with certainty. I’d suggest checking out the PSLF help tool. It is the easiest and most efficient way to verify employment eligibility.

      Reply
  5. I have learned a lot of thing from the article of How do I know if my Employer is Eligible Public Service Loan Forgiveness? This is very informative and a lot of thanks for this information.

    Reply
  6. How about this one: Worked at a charter school which is listed as a government entity under its chart contract, but was paid thru a management company (likely not a non-profit). Am I correct that this time does not count towards PSLF?

    Reply
    • I can’t say for certain, so my suggestion would be to try to get your time certified. If they say your employer isn’t eligible, bummer, but at least you know for sure. The form doesn’t take long to fill out and the potential benefit is massive.

      Reply
    • Hello, I too have asked this specific question on several forums over the years without any response or further understanding. For starters, IcI not turn in a form to find out if it qualifies because 1)I have declined employment opportunities as they likely won’t qualify (ie don’t work for one currently) and 2) have enough denial issues already working in a capacity that 100% should qualify, so getting approved when a position is outsourced to a for profit management company seems like an impossibility. The tough reality seems to be that the (already low paying positions) I’m qualified for in my desired areas have almost exclusively been outsourced by governmental entities (public education, public social services) to management companies. Usually the school district: writes job description, posts job, conducts interview, makes offer, you work in the district (for less money)…BUT your actual employer is not the district. I’d love to have someone tell me I’m wrong. The situation is entirely backwards to the actual purpose of PSLF.

      Reply
      • This is definitely an issue that should be addressed.

        It might sound ridiculous, but actual benefit to the public is not a consideration for PSLF. The Department of Education looks at who you technically work for, rather than the work that you do.

        Given the many issues that there have been with PSLF, it seems likely that some new legislation will have to be drafted to clean things up. Hopefully they find a way to be more inclusive of work that actually performs a public service.

  7. City bus driver for PSLF. Keolis Transit Service is contracted to serve as public transportation system. I’m a city bus driver do I qualify for PSLF

    Reply
    • The actual job doesn’t matter… it is the employer that matters. If your employer is the city or a non-profit, you will likely be eligible. The only way to know for certain is to complete the employer certification form.

      Reply
    • After a quick google search, it looks to me that Waste Management is a large publicly traded for-profit company. As such, they probably will not qualify as a PSLF employer. You can always send in an employer certification form to check definitively, but I would be shocked if it was approved.

      Reply

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