The Pros and Cons of the Public Service Loan Forgiveness (PSLF) Program

Overview

I think there are a number of undergraduate and graduate student that realize there are a number of ways to address their student loan debt. Individuals with large amounts of government issued student loans should seriously consider the Public Service Loan Forgiveness (PSLF) program.

The PSLF program forgives the remaining balance on your eligible student loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

Below I highlight some pros and cons to the PSLF program.

Pros/Benefits

• After 10 years of no missed payments, the PSLF program forgives your qualifying non-private student loan debt balance (student loans go bye-bye)

• No tax implications to the remaining balance that is forgiven through the program

• You can focus on other personal/financial goals (i.e. saving for a down payment on a property, vacation, etc.)

• Careers in the government and non-profit sectors are examples of jobs that can qualify for PSLF

• Experiences within the government and non-profit sectors may help you transition into non-traditional Pharmacist roles

• You retain the ‘benefits’ that come with federal student loans

Cons/Risks

• Specific criteria need to be met to qualify for the program:

  • Must be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization

  • Must work full-time

  • Must have have qualifying student loans

  • Must pay your student loans under an income-driven repayment plan

  • Must make 120 qualifying payments (i.e. 10 years of no missed payments)

• Need to personally track and ensure proof of your qualified payment and qualified employment history over a 10-year time frame

• Depending on your career aspirations and trajectory, you may hurt your opportunities for long term earning potential

  • Examples include: missing out on the possibility of working at a company that is acquired, ‘delaying’ career progression that may result in logarithmic compensation in the private sector, etc.

• Congress can change or end the PSLF program

  • Concerns about this are negligible at this time, but should be monitored

• Important paperwork must be completed properly

Summary

In conclusion, if you have an exorbitant amount of qualifying student loan debt, have plans to work at the FDA then eventually join the private sector (i.e. a pharmaceutical or biotechnology company), or have a job that can qualify you for PSLF, then you should seriously consider the PSLF program. However, it is important to fully understand the benefits and risks associated with the PSLF program as seeking PSLF is a 10-year commitment that requires careful planning and execution.

For more detailed information about the PSLF program, please visit the student.aid.gov website, and for some interesting statistics visit this website.

Author’s Note

If you think I can be of help to you with navigating the PSLF program and aligning the program with your personal and career goals, then please reach out.