Kate Wood

So PSLF is separate entirely from your actual repayment plan.

So most people who are on PSLF are kind of looking to pay as little as they can right before that balance is forgiven.

So in many cases, folks are on one of the income driven repayment plans because those generally have

Lower monthly payments, unless you were particularly high income, then you might be seeing a payment that would be comparable to what you'd get on one of the standard plans.

But for a lot of people, income driven is going to give them a lower payment.

So folks are picking a repayment plan.

They're making 10 years worth 120 qualifying payments, whatever repayment plan they're on.

And then those 120 qualifying payments are what will eventually get them PSLF.

So PSLF is separate from the forgiveness that you hear about with the other income-driven repayment plans.

In those cases, depending on which plan you're on and when you entered it and a lot of other things, the earliest that you would see forgiveness would be after 20 years worth of payments.

With the new plan that's coming up, the repayment assistance plan, it's going to be 30 years worth of payments.

So one other difference about PSLF, in addition to the, you get forgiveness after 10 years, which is a huge plus.

The other good news is that after you reach that 120 payment mark, your remaining loan balance is forgiven and you will not have to pay taxes on it.

You might've heard a lot in the news lately about the idea of a student loan tax bomb.

PSLF forgiveness is not going to be affected by that because PSLF is never taxed at the federal level.

The whole student loan tax bomb topic is a topic for another time for sure.

But bottom line here, that does not apply to PSLF borrowers.

So this is another aspect where it kind of depends, at least for our listener, Sydney, where she is in her program.

If this is a program that she's already begun, she is not going to be subject to these new rules either until she finishes the degree or for three years.

But if this is a brand new program that she's starting and if she takes out new loans for it, she would be subject to this.