Fewer than 1% Received Loan Forgiveness!

If you are relying on Public Service Loan Forgiveness (PSLF) for your federal student loans, know this. Data suggest that only 0.003% of applicants have had their loans forgiven! Here’s why many applications were denied. I also discuss my decision for paying off my loans without using a repayment program, thereby saving thousands of dollars in interest (and buying my freedom)!

What is PSLF?

PSLF is a program that began in 2007 to forgive the remaining balance on direct federal student loans after making 120 qualified payments over 10 years while working full-time under qualified employers and while under a qualified repayment plan.

Notice my emphasis on “qualified.” There are a number requirements. Bare with me as I name a few:

  • Only Direct Federal Loans are eligible
    • Private loans are not eligible
  • Federal Family Education Loan (FFEL) or Federal Perkins Loan (Perkins Loan) programs do not qualify for PSLF
    • But they may become eligible if you consolidate them into a Direct Consolidation Loan.
  • Only qualifying payments on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF.
    • Any payments made on the FFEL or Perkins Loans before you consolidated them don’t count.
  • You have to be enrolled in a qualified repayment plan
    • Income-based repayment plans qualify.
      • So does the 10-year Standard Repayments Plans, but after the 10 years you would have no balance anyway.
  • Standard Repayment Plan for Direct Consolidated Loans is not the same as the 10-year Standard Repayments Plan, and does not qualify
  • You cannot make a qualifying monthly payment while your loans are in at-school status, grace period, forbearance, or deferment
    • However, check whether you can begin the program during post-doc.
      • Check before making your first payment!

Confused? So were thousands of other people, which is why their applications were denied. Please see Federal Student Aid website for current eligibility requirements.

Photo by Nathaniel Shuman on Unsplash

The Numbers

The first borrowers became eligible for forgiveness in September 2017.

According to the Federal Student Aid (FSA) office, as of June 2018:

  • Approximately 33,000 PSLF applications by 28,000 borrowers were submitted 
  • Approximately 29,000 applications have been processed
  • Almost 300 applications were approved as meeting all requirements
  • This resulted in only 96 unique borrowers having their loans discharged

As a recent article by FedSmith points out, according to the FSA data, 96 out of 28,000 borrowers = 0.003% of applicants with their loans forgiven (which is similar to the percent found eligible by a separate report by the Government Accountability Office).

The Unforgiven Loans

Over 70% of applicants were denied for not meeting requirements due to:

  • Ineligible loans
  • Did not make all 120 payments
  • Employment did not qualify

An additional 28% were denied due to missing or incomplete information

  • These applicants have the ability to resubmit their applications, but in the meantime they are continuing to repay their loans.

Applications Pending

  • Thousands of other applications are still pending. Borrowers continue to make loan payments (and pay interest) while they await a decision.
Photo by niu niu on Unsplash

Why I Chose Not to Apply for Loan Forgiveness

Many of my colleagues and trainees plan to apply for PSLF or similar programs. It’s sad to hear about people who take lower paying public service positions or feel that they cannot leave their job out of concern about how it would affect their PSLF eligibility.

My decision went beyond concern about eligibility.

I hated my student loans. It made me angry to look at them every month and see how much I was paying in interest. The payments were as much as my rent!

I did not want to pay interest for 10 years. Plus, you may have to pay income tax on the debt that’s forgiven.

I had more important uses for the money, including starting to save for retirement, purchasing a house (and working to pay off the mortgage), establishing health savings, putting aside money for a new vehicle and home repairs (including a new roof), and kids’ educations.

After graduating, I kept my costs to a minimum and threw every cent I had toward my loans. Within 3 years of graduating, my student loans were paid!

Photo by Max van den Oetelaar on Unsplash

Choosing Financial Independence

It would be nearly impossible to save for these things and become financially independent if I had 10 years of student loan payments.

A primary goal of financial independence is the freedom to do what you want with your life without worrying about money.

Working in a job I love but that is also emotionally taxing. In order to prevent burnout it’s imperative to me that I go into work everyday because I choose to, not because I feel shackled by golden handcuffs.

Photo by Jason Leung on Unsplash


  • For information on other Loan Forgiveness programs, see StudentAid.gov


  • To learn whether your federal position qualifies for PSLF, see OPM website


  • Better yet, to learn how I paid off my student loans within 3 years of graduating without any forgiveness programs thus saving interest, reducing stress, and taking control of my financial life, see my article on Student Loan Repayment


  • Student Loan calculators can be found at Student Loan Hero
    • for a general idea how increasing your payment can save you time and money, see this calculator from the NY Times


Do you plan to use the PSLF program?

You May Also Like

Avoiding Lifestyle Inflation is Key to Getting Out of Debt

Budgeting for Post-Doc and Early Career

Student Loan Debt for Psychologists: PsyDs vs. PhDs

10 Tips for a Financial Plan that Works

Leave a Reply

Your email address will not be published. Required fields are marked *