Are you familiar with any programs that could assist a low-income
social worker who has used up his hardship deferments? Any assistance
would be appreciated. I'm in a low-paying county, being paid a low
income to assist disabled persons, and need help with my student
— Dave W.
If your loans are federal student loans, such as Federal Stafford or
Federal Grad PLUS loans, you should consider the public service loan
forgiveness program enacted by Congress as part of the College Cost
Reduction and Access Act of 2007. After ten years of full-time
employment in a public service job, any remaining debt (including
interest) will be forgiven. This forgiveness is tax-free under
current law because it depends on work in a specified occupation.
Public service loan forgiveness is not available for private student
loans or Parent PLUS loans.
Public service jobs include employment as a social worker in a public
child or family service agency as well as working for a tax-exempt
501(c)(3) charitable organization, among numerous other occupations.
To be eligible for public service loan forgiveness, your loans must be
in the Direct Loan program. If your loans are not already in the
Direct Loan program, you can move them into the Direct Loan program by
consolidating them at
You can do this even if you have previously consolidated your loans.
After your loans are in the Direct Loan program, choose the
income-based repayment plan. Only three repayment plans are eligible
for public service loan forgiveness — standard 10-year
repayment, income-contingent repayment and income-based repayment
— and income-based repayment usually yields the lowest monthly
Generally speaking, public service loan forgiveness will yield a
financial benefit if your debt exceeds your income. But individual
circumstances may vary, so it is best to use an
income-based repayment calculator
to evaluate whether and how you will personally benefit from public
service loan forgiveness.
Public service loan forgiveness is a back-end loan forgiveness
program, with the forgiveness occurring after completion of the
service. Public service loan forgiveness is not retroactive, so you
don't get any credit for the time you've already worked as a social
worker. The clock starts as soon as your loans are in the Direct Loan
program and in one of the three eligible repayment plans. (If your loans
were already in the Direct Loan program in one of the three repayment
plans, October 1, 2007 is the earliest start date.) Deferments and
forbearances do not count toward the 10-year requirement, which is
based on the number of monthly payments (120 payments) as opposed to a
particular duration of time.
The FinAid site provides additional information about public service
loan forgiveness at