I am posting this here because this pertains to folks who have been out of school for awhile. It’s possible that some of the parents who lurk here may have older kids who could benefit … or the parents themselves might benefit. It was announced today that some PSLF rules will temporarily be relaxed, and some borrowers who might not otherwise qualify can file an application for their loans to be considered for forgiveness under the temporary rules: Fact Sheet: Public Service Loan Forgiveness (PSLF) Program Overhaul | U.S. Department of Education.
Who might benefit? Those who have FFEL loans, which will qualify if consolidated … but the temporary rules will allow payments made on or after October 1, 2007 to count (previously, only payments made after consolidation would count). Those who made payments under a non-qualifying payment plan. Those who were denied credit for payments due to things like paying too much & being put in a paid ahead status. Others will benefit, as well. You have to apply for consideration: Federal Student Aid.
I think this is great, and I hope that going forward, the program rules will be better articulated & the servicer (I believe Mohela will be the new PSLF servicer) will give better advice to borrowers.
I agree. As long as PSLF is a thing, though, it should be properly run. In some ways, I disagree with things like allowing payments in non qualifying payment plans to qualify. But I have witnessed the poor communication of rules, so I understand that perhaps some were misled. It’s actually a ridiculously confusing program, and it needs to be streamlined and better communicated going forward. Every time I went to a federal training, I found out more things I didn’t know that I didn’t know. That is no way to run a program.
Interesting that this was announced just days after 60 Minutes’ piece on military members getting overwhelmingly rejected for forgiveness. And the people they interviewed who’d been denied were all lawyers! It was a good segment.
I agree that it’s interesting timing. The program was rolled out today, and there’s no way that would have happened if it hadn’t been ready in advance. I feel a bit cynical saying this, but maybe the feds were aware of the 60 Minutes piece & figured that rolling it out right after that piece would make it more palatable to the public. After all, who wants to deny relief to those fighting for our country? The truth is, I would think military members account for a very small percentage of those enrolled in PSLF.
I think that this has been in the works for a while, and is a sensible response to calls for cancellation of student loans. To me, it makes much more sense to make it easier to “earn” debt forgiveness rather than enact some sort of broad cancellation. There’s a PSLF subreddit that has excellent information and very knowledgeable moderators if anyone is interested and has more questions. My D’s fiancé is a public defender and the only way his career path is feasible with his debt from law school ($155K debt on a $57K salary) is to be able to earn forgiveness through PSLF. The recent changes don’t really affect him though because he had qualifying loans and enrolled in a qualifying repayment plan from the start.
Even so, it’s important for him to monitor his PSLF account to make sure he is getting proper credit. I have had former students who did everything right, but the servicer didn’t properly credit them for payments. I strongly encourage everyone in PSLF to certify employment at least annually (I suggest doing it when they recertify income) and to keep track of qualifying payments in their account.
That’s exactly what the people interviewed by 60 Minutes said. They were lawyers who did everything they were supposed to but weren’t given credit for their payments.
Biden is getting a lot of pressure to do a general loan forgiveness before payments restart in February for millions of student borrowers. I think he’s trying to appease those pushing for big forgiveness, like Eliz Warren and Chuck Shumer, with these smaller forgiveness programs (there have been a few others in the past few months, for schools that have closed and for disabled students), but there is going to be a big mess come January.
Some of the loan servicers are dropping government student loans from their businesses, so those loans will have to be transferred to other servicers. Borrowers who were in default in March 2020 will have to figure out where they stand in Jan - how much do they pay? Can they refinance to get out of default?
I have one kid who will just go back to paying her loans and one who has returned to grad school so will have to get her deferment processed.
This “megathread” on r/PSLF has an excellent summary at the top, which they are continuously updating. It explains the immediate but temporary changes, and the future permanent changes. The OP is Betsy Mayotte, President of the Institute for Student Loans Advisors, which is a non-profit that provides free advice on managing student loan repayment. She is one of the mods on this subreddit and is very knowledgeable and helpful. https://www.reddit.com/r/PSLF/comments/q28msw/pslf_changes_megathread_post_all_questions_etc/?utm_source=share&utm_medium=web2x&context=3
Yes I’m doing my best to nag him about it. His employer (public defender) has had a lot of staffing turnover including in HR and it takes forever to get the ECF form signed. And FedLoan, the servicer for all borrowers seeking PSLF forgiveness, has its loan servicing contract ending on 12/14/2021. Between the upcoming transfer to a new servicer and the Covid waivers, I think it will continue to be messy for a while. But at least he has a qualifying loan (he consolidated before starting repayment) and is on a qualifying repayment plan (PAYE) and employed by a qualifying employer.
Did I read that you have to have 10 years of service in before applying? I thought I saw that somewhere, now am not seeing it. S is a public school teacher in an urban underserved area in his 8th year of teaching.
Under PSLF what you need are 120 qualifying payments. They do not need to be consecutive, so someone could spend longer than 10 years meeting the requirement, especially if they have changes of employment where for part of the time they are not in a qualifying job.
Also, there is a special program for teacher loan forgiveness that takes 5 years in a Title 1 school, but sometimes teachers are better off going for PSLF, which takes longer but can forgive a much larger amount of debt. Teacher Loan Forgiveness – TISLA.
