Question

Which of the following would be eligible for the Public Service Loan Forgiveness (PSLF) program?

a) Student loan from a private lender

b) Personal loan for a vacation

c) Federal student loan for public service

d) Car loan

Answer 1

The only option eligible for the Public Service Loan Forgiveness program is (c) Federal student loan for public service, as it is a Direct Federal Student Loan, which is a requirement for the PSLF program. Loans from private lenders, loans for personal reasons like vacations, or car loans are not eligible.

Step-by-step explanation:

The Public Service Loan Forgiveness (PSLF) program is a federal initiative designed to forgive the remaining balance on Direct Federal Student Loans after the borrower has made 120 qualifying payments while working full-time for a qualifying employer, typically in the public service sector. Therefore, out of the options provided:

(a) Student loan from a private lender is not eligible for PSLF.

(b) Personal loan for a vacation is not eligible for PSLF.

(c) Federal student loan for public service is eligible for PSLF, assuming all other program requirements are met.

(d) Car loan is not eligible for PSLF.

To apply for PSLF, borrowers must ensure they have federal student loans, which can be obtained after completing the Free Application for Federal Student Aid (FAFSA). Private loans, personal loans for vacations, or car loans do not qualify for this forgiveness program. The purpose of PSLF is to encourage individuals to work in public service by alleviating the financial burden of postsecondary education.

Answer 2

Among the given options, only a federal student loan for public service would be eligible for the Public Service Loan Forgiveness (PSLF) program. Eligibility requires working in a public service role while repaying a federal student loan. Other options like private loans, personal loans, or car loans do not qualify for PSLF.

Step-by-step explanation:

To determine which option would be eligible for the Public Service Loan Forgiveness (PSLF) program, it's crucial to understand the types of loans it covers. The PSLF program is designed for those who have federal student loans and are employed by government or non-profit organizations. Individuals under this program must make 120 qualifying payments while working full-time for a qualifying employer.

Among the options provided:

• Student loan from a private lender is not eligible because PSLF only applies to federal loans.
• A Personal loan for a vacation is ineligible as it is not educational nor a federal loan.
• Federal student loan for public service is indeed eligible for the PSLF program, as it aligns with the program’s intended purpose.
• A Car loan does not qualify as it is not an educational loan and is unrelated to public service employment.

To apply for PSLF, students must first complete and submit the Free Application for Federal Student Aid (FAFSA), and examine the options available to them, which may include scholarships, grants, work-study programs, and various student loans. Once federal loans are obtained, one can consider PSLF if they meet the criteria of service in public roles.