Forgiveness and PSLF · guide
Public Service Loan Forgiveness: the rules in 2026
Public Service Loan Forgiveness cancels the remaining balance of a borrower's Direct Loans, tax-free, after 120 qualifying monthly payments made while working full time for a qualifying employer. Full time means at least 30 hours a week on average; qualifying employers are governments at every level, 501(c)(3) nonprofits and certain other nonprofits that provide public services. The 2025 law kept the program and added on-time payments under the Repayment Assistance Plan to the list of qualifying payments, so the new income-driven plan works for public servants. It did not add the new Tiered Standard plan, which qualifies only when its payment is at least the 10-year standard amount, about $341 rather than $262 on a $30,000 balance. A separate rule, effective July 1, 2026, removes from the list of qualifying employers any organization the Department determines has a substantial illegal purpose, for months after that determination. For a nurse at a nonprofit hospital with $110,000 of loans, two children and a $68,000 income, RAP payments of $240 for ten years would leave about $160,400 to forgive.
How far you are from PSLF
Payments left
66
| Years left at one payment a month | 5.5 |
| RAP payment, single, no dependent | $217 |
| Paid until forgiveness on RAP | $14,300 |
PSLF survived the 2025 law and gained a plan. Here is who qualifies, which payments count and what changed on July 1, 2026.
Checked by Radif Partners · Editorial policy · How we calculate
The four conditions
Every qualifying month needs all four at once. The loan must be a Direct Loan not in default; FFEL and Perkins loans qualify only after consolidation into a Direct Consolidation Loan. You must be employed full time by a qualifying employer, or serving full time in AmeriCorps or the Peace Corps. The payment must be made under a qualifying repayment plan. And it must cover the full scheduled amount. After 120 such months, which need not be consecutive, the remaining principal and interest are forgiven (34 CFR 685.219).
Which plans qualify
| Plan | Counts for PSLF? |
|---|---|
| Repayment Assistance Plan | Yes, on-time payments (added by the 2025 law) |
| IBR, PAYE | Yes |
| ICR | Yes, for payments received by June 30, 2028 |
| 10-year standard plan | Yes, but it repays the loan in 120 months, leaving nothing to forgive |
| Tiered Standard | Only if the payment is at least the 10-year standard amount |
| Graduated, extended and other plans | Only if the payment is at least the 10-year standard amount |
The practical rule follows: a public servant who expects forgiveness wants the lowest qualifying payment, which means an income-driven plan. A borrower placed on Tiered Standard by default, which happens to anyone with a loan made after July 1, 2026 who does not choose, should switch to RAP to start counting. The PSLF calculator compares RAP and IBR payments over the months left.
A nurse's ten years
Take a registered nurse at a nonprofit hospital, $110,000 of graduate and undergraduate loans at an average of 7.2%, two children and an income of $68,000. On RAP she pays $240 a month. Over 120 payments she pays about $28,800 and the remaining $160,400 is forgiven with no federal tax. On a 10-year standard plan she would have paid $1,289 a month and left nothing to forgive. If her income rises, RAP payments rise too and the forgiven amount shrinks, but she never loses eligibility because of income.
Employers and the July 2026 rule
The definition of qualifying employer now excludes organizations that engage in activities with a substantial illegal purpose, a term the Department defined in its rule of October 31, 2025 (90 FR 48966). The determination is made employer by employer, after notice and an opportunity to respond, and applies only to months after it is made: borrowers keep full credit for work performed before. Employers certify their status when they sign PSLF forms. Most public servants, in government, schools, hospitals and charities, will see no change; the employer rule page gives the definitions and the process.
Counting and certifying
Keep your count current. Certify employment at least once a year and whenever you change employers, so that a closed or unresponsive employer does not leave a gap you cannot document later. Check that months spent in qualifying deferments or forbearances were credited; for borrowers not on RAP, cancer treatment, economic hardship, military service and several other periods count. When Direct Loans are consolidated, the weighted average of their qualifying payments carries over to the new loan. Lump sums paid ahead count for the months they cover up to limits set in the regulation.
Parents, graduate students and other special cases
A parent with parent PLUS loans can earn PSLF through the parent's own public service job, but only after consolidating the PLUS loans into a Direct Consolidation Loan repaid on a qualifying plan. For such a consolidation the qualifying plans are narrow: ICR until June 30, 2028, and IBR if the consolidation was repaid under ICR, PAYE or IBR at least once by then; RAP is not available for it. The parent PLUS repayment page explains the sequence. Graduate students who borrow in 2026-27 under the new caps of $20,500 a year, or $50,000 for professional programs, can count PSLF from their first job just like before; the cap changes how much they owe, not whether PSLF applies.
AmeriCorps and Peace Corps volunteers in full-time service count by explicit rule. Borrowers whose employer status is unclear, such as a nonprofit that is not a 501(c)(3), should check the employer's status before counting on PSLF: the Department keeps a database of qualifying employers, and the PSLF form asks the employer to certify both its status and, since the 2026 rule, that it does not engage in activities with a substantial illegal purpose. When an employer cannot or will not certify, the regulation allows the Department to determine qualifying employment from other documentation the borrower provides, such as pay records.
How long it really takes
Ten years is the minimum. Gaps in full-time qualifying employment, late payments on RAP, months on a non-qualifying plan, and months in forbearances that do not count all add time. A borrower who keeps every month qualifying from the first payment reaches forgiveness after exactly 120 payments. A borrower who discovers after five years that their payments were on a non-qualifying plan has lost those months, which is why checking the plan and the employer early matters more than any later optimization.
Leaving public service
Qualifying payments do not expire. A borrower who leaves a public service job after 60 payments and returns five years later keeps the 60 and resumes counting. In the meantime the loans stay on whatever plan you choose; RAP is often a sensible holding plan because its on-time payments keep the balance from growing and count toward RAP's own forgiveness. What breaks a PSLF plan is refinancing into a private loan, which ends federal eligibility for good, as the refinance calculator explains.
Taxes and the forgiven amount
PSLF forgiveness is excluded from federal income by section 108(f)(1) of the tax code, a rule the 2025 law did not change. That sets PSLF apart from forgiveness at the end of RAP or IBR, which lost its broad federal exclusion on January 1, 2026. For borrowers who qualify for both paths, the tax difference adds to the time difference: ten years and no federal tax against twenty to thirty years and a possible tax bill. Details on taxes on forgiveness.