Q. How can I calculate possible repayment schedules?

A. Repayment calculators can be found at www.finaid.org. For an income-based repayment calculator go to www.finaid.org/calculators/ibr.phtml.

 

Q. I have graduated and have already consolidated my loans. Can I reconsolidate them into a Federal Direct Consolidation loan in order to take advantage of the public service forgiveness provision?

A. No, unfortunately once you have consolidated your loans you cannot reconsolidate. If you have a federal loan not yet consolidated, you may have options. 

 

Q. Is the amount forgiven taxable?

A. Yes it is. For some, this may be a sizeable amount. Please see examples provided.

 

Q. I do not know if I will be working in public service in 10 years. What should I do? 

A. Only individuals who are committed to public service and expect to perform at least 10 years of public service should consider consolidating their loans into a Direct Consolidation Loan. 

 

Q. Will I lose eligibility for loan forgiveness if I miss or am late with a loan payment?

A. There is currently no information (provision, rule, etc.) that addresses this. There will likely be “technical amendments” that will clarify the law.

 

Q. Do I need to consolidate my loan to take advantage of the Income-Based Repayment Option?

A. No.

 

Q. What is defined as “public service”?

A. “(i) a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education (including early childhood education), social work in a public child or family service agency, public interest law services (including prosecution or public defense or legal advocacy in low-income communities at a nonprofit organization), public child care, public service for individuals with disabilities, public service for the elderly, public library sciences, school-based library sciences and other school-based services, or at an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code.”

 

Q. I’m not sure I’ll be working in public service in 10 years, but want to make sure I can take advantage of the program just in case. Are there disadvantages to consolidating with the Federal Direct Program?

A. Possibly. The Federal Direct Consolidation loans may be more expensive than some Stafford and Grad PLUS loans from lenders that offer repayment incentives or discounts, and may be as expensive. or less expensive than others that do not offer repayment incentives or discounts.