Pharmacy technicians, like many professionals, have the opportunity to utilize a range of federal student loan forgiveness programs. These encompass the Public Service Loan Forgiveness Program, the Income-Driven Repayment Plan Forgiveness Program, and the Perkins Loan Cancellation Program.
Of these, the Public Service Loan Forgiveness Program frequently offers the most significant relief, making it a primary option for many in this profession.
These programs are not limited to pharmacy technicians. They are accessible to all borrowers with federal student debt.
This article will give you an overview of these loan forgiveness programs, explain their eligibility criteria, and how these programs can potentially reduce your student loan debt.
Continue reading to learn more.
Public Service Loan Forgiveness for Pharmacy Technicians
A Path for Pharmacy Technicians One of the most notable programs accessible to pharmacy technicians is the Public Service Loan Forgiveness (PSLF) Program.
This federal initiative absolves the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer, which includes most public service organizations.
Pharmacy Technicians Full-time employment requirement:
To be eligible for the PSLF Program, pharmacy technicians must be employed full-time by a qualifying employer. This typically includes government organizations at any level (federal, state, local, or tribal) and not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code.
Types of qualifying employers:
Qualifying employers for pharmacy technicians often include hospitals, pharmacies within non-profit organizations, and government health organizations. However, it’s important to verify with your employer or the loan servicer to ensure your employment qualifies for PSLF.
PSLF Program Requirements
To qualify for the PSLF program, pharmacy technicians must work full-time. This is generally considered to be at least an annual average of 30 hours per week or, for contractual or employment period-based jobs, the number of hours your employer considers full-time.
Have federal Direct Loans:
Only Federal Direct Loans are eligible for PSLF. If you have other types of federal loans, like Federal Family Education Loans (FFEL) or Perkins Loans, you can consolidate them into a Direct Consolidation Loan to qualify.
Make 120 qualified monthly payments
Pharmacy technicians must make 120 qualifying payments on their loans while employed full-time by a qualifying employer. It’s important to note that these payments do not have to be consecutive.
Make payments under a qualifying repayment plan
The payments must be made under a qualifying repayment plan, which includes all of the income-driven repayment plans.
Eligible Loans for Forgiveness Direct Loan requirement
As mentioned earlier, only Direct Loans are eligible for PSLF. This includes Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. Non-qualifying loans and
How to make FFEL and Perkins Loans Qualify for PSLF
Other federal loans, such as the Federal Family Education Loan (FFEL) Program and the Federal Perkins Loan Program, do not qualify for PSLF. However, they can become eligible if you consolidate them into a Direct Consolidation Loan.
How to Apply for the PSLF Program Steps to apply
Complete and submit the Employment Certification for Public Service Loan Forgiveness form annually or whenever you change employers.
Make 120 qualifying payments on your Direct Loans while working full-time for a qualifying employer. Once you’ve made your 120th qualifying payment, you can submit the PSLF application to receive loan forgiveness.
Importance of the Employment Certification Form
The Employment Certification Form is crucial as it helps you monitor your progress toward meeting the PSLF eligibility requirements.
It’s advised to submit this form annually or whenever you change employers to ensure you’re on the right path.
Part-time Pharmacy Technicians and Public Service Loan Forgiveness
While the PSLF program generally requires full-time employment, part-time pharmacy technicians aren’t necessarily excluded. If you work in more than one qualifying part-time job simultaneously, you may still be eligible for PSLF. The key is that you must work an average of at least 30 hours per week across those jobs.
Income-Driven Repayment Forgiveness
Another option for pharmacy technicians seeking student loan forgiveness is the Income-Driven Repayment Plans (IDR) Forgiveness.
IDR plans calculate your monthly student loan payment based on your income and family size.
If you still have a remaining loan balance after 20-25 years of payments (the exact duration depends on the specific IDR plan), that remaining balance is forgiven.
IDR Loan Forgiveness VS PSLF
While PSLF and IDR Forgiveness can provide Loan Forgiveness for pharmacy technicians burdened with student loan debt, key differences exist.
PSLF can provide forgiveness in 10 years and doesn’t tax the forgiven amount, while IDR Forgiveness takes 20-25 years and may result in a tax liability for the forgiven amount.
Requirements for qualification
To qualify for IDR Forgiveness, pharmacy technicians must have eligible federal student loans and a high debt relative to their income. The specific requirements can vary based on the specific IDR plan.
Types of federal student loans that qualify for IDR Forgiveness :
Most federal student loans are eligible for at least one of the IDR plans. This includes Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans made to students, and Direct Consolidation Loans that did not repay any PLUS loans made to parents.
Some FFEL Program Loans and Federal Perkins Loans may also be eligible if they are consolidated into a Direct Consolidation Loan.
Income-Driven Repayment Plan
Repayment programs that offer loan forgiveness There are four main IDR plans that offer loan forgiveness: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR).
Each of these plans has different terms and eligibility requirements, but all offer forgiveness of the remaining loan balance after a certain repayment period.
Non-qualifying repayment plans
Standard repayment plans and graduated repayment plans do not offer loan forgiveness. If you’re on one of these plans, you would need to switch to an IDR plan to qualify for forgiveness.
Qualifying Payments for IDR Forgiveness Repayment Plans
To qualify for forgiveness under an IDR plan, you must make your full, scheduled, monthly payments on time. Any payments made while your loans are in deferment, forbearance, or default do not count as qualifying payments.
Total number of payments required
The total number of payments required depends on the specific IDR plan. For IBR, PAYE, and REPAYE plans, any remaining balance is forgiven after 20-25 years of qualifying payments.
State-Based Student Loan Repayment Assistance Programs
These programs often target specific professions and have the potential to provide significant financial relief. It’s worth exploring whether pharmacy technicians are included in these initiatives within your state.
How State-Based Programs Work
State-based programs vary widely in their terms and benefits. Some offer loan repayment assistance, while others provide loan forgiveness.
The amount of assistance and the length of the service commitment required also vary by state and program.
Finding State-Based Programs
To find state-based programs for pharmacy technicians, check with your state’s higher education agency or the financial aid office at your school. You can also check our “student loan forgiveness by state list.”
Pharmacy Technicians with Student Loans in Default or Wage Garnishment
Getting Student Loans Out of Default
If your student loans are in default, don’t lose hope.
It’s important to address this issue promptly, as defaulting on your student loans can have serious financial consequences.
Stopping Wage Garnishment
If your wages are being garnished due to defaulted student loans, there are steps you can take to stop the garnishment.
These include negotiating a repayment plan with your lender, consolidating your loans, or applying for loan rehabilitation.
Perkins Loan Cancellation Program for Pharmacy Technicians
If you have Perkins Loans, you may be eligible for the Perkins Loan Cancellation Program. This program offers up to 100% loan cancellation for pharmacy technicians and other qualifying public service professionals.
Private Student Loan Forgiveness Options for Pharmacy Technicians
While federal and state programs offer various loan forgiveness options, it’s important to note that private student loans operate differently.
Private lenders typically do not offer loan forgiveness.
However, there are still strategies that pharmacy technicians with private student loans can employ to manage their debt effectively.
Refinance your private student loans
Refinancing can potentially lower your interest rate, reduce your monthly payment, or shorten your loan term.
However, remember that refinancing with a private lender means you’ll lose access to federal loan benefits, including income-driven repayment plans and potential loan forgiveness.
Loan Repayment Assistance Programs
Some employers, states, and professional organizations offer loan repayment assistance programs (LRAPs) that can help pay off private student loans. These programs typically provide funds to repay a portion of your student loans in exchange for a certain period of service or employment in a specific profession or location.
Student loan forgiveness is a challenging landscape for many pharmacy technicians, but many options exist for reducing or wiping out that debt.
The right program for you will depend on your specific circumstances, including your career, personal finance goals, and the type of loans you have.
Remember, it’s crucial to do your research, understand your options, and make informed decisions about managing your student loans.
If you’re a pharmacy technician seeking guidance on managing your student loans, don’t hesitate to reach out. Book a consultation today with a student loan advisor to explore your options and take the first step toward financial freedom.
What should I do if my application for loan forgiveness is denied?
You can contact your loan servicer to understand why your application was denied. If it was due to missing or incorrect information, you might be able to correct the issue and reapply. If you’re still not satisfied, you can submit a dispute with the FSA Ombudsman Group of the U.S. Department of Education.
Can I apply for both the PSLF Program and IDR Forgiveness at the same time?
Yes, you can. In fact, to be eligible for PSLF, you need to be enrolled in an IDR plan. The key is that under PSLF, the remaining balance of your loan could be forgiven after 120 qualifying payments (roughly 10 years), whereas with IDR forgiveness, forgiveness occurs after 20-25 years of payments.
What happens if I switch employers while trying to make my 120 qualifying payments for the PSLF Program?
If you switch employers, the key factor is whether your new employer qualifies under the PSLF program. If they do, your payments can continue to count towards the required 120. If not, those payments while you’re employed with the non-qualifying employer won’t count towards PSLF.
What should I consider before consolidating my loans to qualify for PSLF or IDR Forgiveness?
You should consider the types of loans you have, the interest rates, and the terms of the new consolidation loan. Also, remember that any qualifying payments made towards PSLF before consolidating will be reset to zero, so you’ll need to make 120 qualifying payments on the new consolidation loan.
If I’m working multiple part-time jobs, how can I ensure they qualify for PSLF?
For PSLF, if you work in more than one qualifying part-time job at the same time, you may meet the full-time employment requirement if you work an average of at least 30 hours per week combined in those jobs.
Are there any tax implications for the amount forgiven under the IDR Forgiveness?
As of my knowledge cutoff in September 2021, the IRS considered any forgiven amount under the IDR plan as taxable income. However, the tax implications can change based on new laws and individual circumstances.
Can I pause my payments if I’m unable to pay temporarily, and will it affect my eligibility for loan forgiveness?
Federal loans have options like deferment and forbearance to pause payments, but these periods typically do not count as qualifying payments towards PSLF or IDR Forgiveness. In contrast, under IDR plans, periods of economic hardship deferment do count towards the 20-25 years.
Can my application for the Perkins Loan Cancellation Program be denied? If so, what are the common reasons?
Yes, applications can be denied if you do not meet the necessary requirements. This could happen if you’re not in a qualifying profession if you haven’t served the necessary length of time, or if the application was filled out incorrectly.
What’s the impact on my credit score when my loans are forgiven?
Generally, having your student loans forgiven should not negatively impact your credit score. The loans are reported as “paid in full” on your credit report. However, late or missed payments prior to forgiveness can remain on your credit report and impact your score.
What are some strategies to manage student loan repayment while working as a pharmacy technician?
Consider enrolling in an income-driven repayment plan, apply for loan forgiveness programs if you qualify, make payments on time to avoid default, and seek employer assistance if available. Refinancing or consolidating loans might be beneficial in some cases.