Essential workers keep us safe, keep the lights on, and help us put food on the table. In times of crisis, we depend upon essential workers for help.

Sadly, the United States doesn’t have a comprehensive loan forgiveness program for the essential workers who are vital to our economy. Instead, essential workers need to utilize a patchwork collection of resources to get student loan assistance and forgiveness.

Public Service Loan Forgiveness for Essential Workers

Unfortuantely, only some essential workers qualify for Public Service Loan Forgiveness. Those who are eligible can have their entire federal student loan balance forgiven after ten years of certified employment.

Sadly, your job description and the necessity of the work do not impact eligibility for Public Service Loan Forgiveness.

Instead, PSLF only looks at your employer. If your employer is eligible for Public Service Loan Forgiveness, you can qualify. If your employer isn’t eligible, you can’t qualify, no matter how essential your work is.

I like to use the example of the janitor at city hall to demonstrate this rule of PSLF. If the janitor is an employee of the city, he is in a PSLF eligible job. If the janitor is employed by a private company with a contract to clean city hall, he does not qualify.

Many first-responders and healthcare workers will be eligible for PSLF based upon their employer. However, many other essential workers, such as those working at grocery stores or running our supply chain, likely will not qualify.

Checking PSLF Eligibility

I’ve previously covered the full definition of what counts as a “public service” job.

Borrowers who think their employer may be eligible should check out the Department of Education’s PSLF Help Tool. This tool will help borrowers verify employment eligibility and complete the necessary forms to certify their employment.

Sherpa Tip: Don’t get discouraged if the PSLF Help Tool says your employer is likely ineligible.

In many cases, likely ineligible means that you are the first person from your place of work to apply for PSLF.

Other Federal Loan Forgiveness Opportunities for Essential Workers

IDR forgiveness may represent the best path to forgiveness for many essential workers who are not eligible for PSLF.

Borrowers can sign up for an income-driven repayment plan and have their loans forgiven after 20 or 25 years of payments. While this may sound like a long wait, many can qualify for $0 per month payments. Unlike a deferment or a forbearance, each month of $0 payments counts towards IDR forgiveness. (Note: the Covid-19 payment freeze time also counts towards IDR forgiveness.)

Occupation Specific Help: Some jobs qualify for special student loan forgiveness programs. If you are a teacher, a member of the military, a nurse, or you work in law enforcement, you should investigate programs specific to your job.

Forgiveness for Private Student Loans

Thus far, all of the forgiveness programs that we have discussed apply only to federal student loans.

However, many essential workers must also contend with private student loans. Sadly, the opportunities for private loan forgiveness are very limited.

In most cases, the best a borrower can do is refinance their loans at a lower interest rate with another lender. This option is only available to borrowers with a decent credit score and income. Eligible borrowers can lower their interest rates and their monthly payments.

For those looking for low rates and low monthly payments, I usually suggest a 20-year fixed-rate loan. As of November 2024, the following lenders advertise the best interest rates on 20-year loans:

Rank	Lender	Lowest Rate	Sherpa Review
1		6.08%*	Splash Financial Review
2		6.53%	ELFI Review
3		6.55%	Laurel Road Review

Redefining Public Service to Include all Essential Workers

When the pandemic first started, Congress sprang to action to propose student loan forgiveness programs for essential workers. The photo-ops and press releases may have been real, but none of this legislation has passed.

New laws like The Student Loan Forgiveness for Frontline Health Workers Act or The Opportunities for Heroes Act could have directly helped essential workers.

If you would like to see Congress pass student loan relief for essential workers, take a moment to reach out to your elected representative. The right phone call or email can make a big difference.

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