Everything I Learned From Four Years In The Public Service Loan Forgiveness Program
I am an attorney with a very large amount of law school debt. I work for a public service organization, and Im using the Public Service Loan Forgiveness program . The ins and outs of PSLF can be confusing at times, but after maneuvering it for the last four years, Ive learned a couple of things that might make using this program easier for those of you who want to take advantage. Today, Im going to take you through the program in as easy a way to understand as possible. So get ready, were diving it!
Strategically, there are a couple of things to remember about PSLF. If you qualify , youll need to get on one of the income-tied repayment plans either income based, income contingent, or pay as you earn. This is how youll get a portion of your debt forgiven. If you are making the full payment every month under a standard repayment plan, which is typically a ten-year plan, youll have already paid off your balance by the time youd qualify for forgiveness.
I also recommend enrolling in their automatic debit plan. This will ensure that your payments are on time every month, as being even one day late will render that particular months payment void for purposes of calculating your 120 qualifying payments Mentally, I find it helpful because it just comes out of my bank account automatically, and I can ignore it and just pretend Im debt free and that payment is for my mortgage for my swanky condo.
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Myth: The Government Never Forgives Student Loan Debt
During the Trump administration, federal student loan forgiveness programs didnt exactly loosen the purse strings:
- In its 2017 and 2020 budget proposals, the White House recommended shuttering the popular but ineffective Public Service Loan Forgiveness program. As of Sept. 30, 2020, the Education Department was stamping eligible on about 2% of PSLF applications.
- It also slowed processing for borrower defense to repayment applications made by students who claimed they were defrauded by their schools. The Betsy Devos-led education department also rolled back former President Barack Obama-era rules on defense to repayment.
- For its part, the Trump administration sought to make forgiveness applications more seamless for disabled veterans, but relief for civilians with a total and permanent disability was still hard to come by, according to reporting from NPR.
Despite all that, the federal government has forgiven, discharged or canceled student loan debt over the last two administrations, including nearly $4.4 billion to almost 470,000 borrowers.
|Amount of student loan debt forgiven by programs since their inceptions|
Unfortunately, federal loan forgiveness sometimes requires stacks of paperwork and lots of patience.
What Must I Do To Comply And By When
Employers must provide each new employee information about PSLF eligibility, and provide each employee an annual notification with the following:
- One-page letter addressed to new employees within two weeks of the employee’s first day of employment for current employees:
- Summarizing PSLF
- Providing eligibility and participation info
- Recommending contacting student loan servicer for more info
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$2 Billion Of Student Loan Forgiveness
The U.S. Department of Education has awarded $2 billion of student loan forgiveness to federal student loan borrowers for this type of student loan forgiveness. Its called borrower defense to repayment, and it allows student loan borrowers to get partial or total student loan cancellation if their college or university misled them. For example, this week, the Education Department cancelled $415 million of student loans for 16,000 borrowers who were misled by their for-profit college. To qualify for borrower defense, you must demonstrate that your school violated state law related to your student loan or to the educational services provided.
How to apply: You can apply for borrower defense to repayment through Federal Student Aid.
Bc Loan Forgiveness Program
Students with specific essential occupations can get their British Columbia student loans forgiven if they agree to work for a publicly-funded facility in one of the provinces under-served areas or with children in an occupation that has a shortage of workers.
Are you struggling to make ends meet? Consider applying for BCs social assistance program.
If eligible, the BC Government will forgive the provincial portion of your Canada-B.C. integrated student loan at a maximum rate of 20% yearly for 5 years. Once you finish 5 years of qualified work, a percentage of your student loan will be forgiven, along with the interest generated during each year youre registered in the program.
Eligibility For The B.C. Loan Forgiveness Program
You can qualify for student loan forgiveness in BC if you:
- Are currently paying off a B.C. student loan
- Have graduated from an accredited post-secondary educational facility
- Are not enrolled in any full-time post-secondary studies
- Work an acceptable amount of in-person hours
- Are or will be employed in an eligible full-time, part-time, on-call and/or casual occupation at a publicly-funded facility and working with children or an under-served community
Eligible Occupations In Under-Served Communities In BC
- Teacher Educator
- Teach of the Visually Impaired or Deaf/Hard-of-Hearing
Do you live with a disability? Get extra financial aid through BCs disability assistance program.
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The Ibr Becomes Widely Available
This happened at the end of 2009, as far as we know. As a result, PSLF borrowers in 2019 would have been able to employ IBR rather than the far more complicated ICR. This will significantly increase the number of eligible borrowers.
If you werent expecting PSLF because of negative press, you should reconsider as 2020 ushers in the first somewhat significant group of debtors who will be eligible for tax-free forgiveness. In addition, more borrowers will commit to the 10-year process of qualifying for the program once they see how it works.
# 1 Teacher Loan Forgiveness
TheTeacher Loan Forgiveness Program is often the first option teachers consider when looking for student loan forgiveness. It can wipe out huge amounts of student debt on your direct subsidized and unsubsidized loans, as well as subsidized and unsubsidized federal Stafford loans, offering up to $17,500 of forgiveness.
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Is Teacher Loan Forgiveness Worth It
Is Teacher Loan Forgiveness the way to go when it comes to handling your student loan debts? Read on to learn about the available student loan forgiveness for teachers, what they could mean for you, as well as other options to pay off your student loans.
If you are a teacher who has taken loans to complete your courses and are now looking for loan forgiveness programs, then you have a few options. But, only one of them has a name that specifically refers to teachers. If you are employed by a U.S. federal, state, local, or tribal government or not-for-profit organization, you might be eligible for the Public Service Loan Forgiveness Programs as well. It should be noted that are a number of jobs available to help get your loans forgiven. Having an in-depth understanding of the various student loan forgiveness jobs out there is crucial to see if your job can get your loans forgiven.
Each forgiveness program has differing guidelines and qualifications, and the right program for you depends in large part on your total debt, current and future employment, and your life goals. Certain tax implications can also affect your decision of choosing a forgiveness plan.
Is teacher loan forgiveness the way to go when it comes to handling your student loan debts? Read on to learn about the available student loan forgiveness for teachers, what they could mean for you, as well as other options to pay off your student loans.
What Is The Ffelp Loan Forgiveness
After making a specific number of qualified monthly payments, you can have your federal student loans forgiven under the FFELP student loan forgiveness program.
However, you must first consolidate your FFELP loans into a single Direct Consolidation Loan. Only then can you be eligible for loan forgiveness under the FFELP. After that, you must make 120 monthly qualifying payments.
Then, apply for FFELP forgiveness after making 120 qualified monthly payments or payments for ten years.
The FFELP is an excellent approach to repay your federal student loans. Because you will be able to pay off your FFELP loans if you stay up with your monthly payments, FFELP debt forgiveness is a fantastic motivator to keep up with your payments.
Furthermore, FFELP debt forgiveness is a helpful program that can assist borrowers with financial difficulties.
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Student Loan Forgiveness For Pharmacists
Pharmacists can often qualify for loan forgiveness if they work for the government or a qualified nonprofit.
Student loan repayment assistance may also be provided to pharmacists who agree to work in areas where there are not enough pharmacists.
Here are some great options for student loan forgiveness programs for pharmacists:
- PSLF: Pharmacists who work for the government or qualifying nonprofits may be eligible for 100% forgiveness after making 120 monthly payments in an income-driven repayment plan.
- The National Health Service Corps Loan Repayment Program : Up to $50,000 in loan repayment in exchange for two years of service at approved sites that provide free or discounted services to Medicare beneficiaries and others.
- NIH Loan Repayment Programs: The National Institutes of Health offers eight Loan Repayment Programs that provide up to $50,000 a year in student loan repayment assistance to pharmacists and scientists with medical degrees who perform biomedical or biobehavioral research.
- State-based pharmacist loan forgiveness: To attract and retain pharmacists, many states provide student loan forgiveness.
Learn More: Pharmacists Student Loan Forgiveness Guide
You Might Have To Wait A Long Time To Receive Forgiveness
But all these plans require years of service or repayment before canceling your debt. The Teacher Loan Forgiveness program has one of the shortest service requirements at five years, but it only offers either up to $5,000 or $17,500 toward your debt, depending on the subject you teach.
PSLF promises to forgive all your debt, but only after youve worked for an entire decade in a qualifying nonprofit, government agency or other qualifying organization. Unless this kind of work lines up with your career goals, you might decide your answer to, Is PSLF worth it? is no.
The government will also forgive your balance if you still owe money at the end of your term on an income-driven repayment plan, such as income-based repayment or Pay As You Earn. But on these plans, your term will be 20 or 25 years, so you wont see loan forgiveness for a very long time.
Instead of pinning your hopes on student loan forgiveness after 20 years , you might be better off paying back your student loans faster. Otherwise, you could have debt hanging over your head most of your life while youre trying to reach other financial milestones.
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Should I Apply For Student Loan Forgiveness
9 Minute Read | November 09, 2021
Remember when you were trying to figure out life after high school? All of a sudden, you were 18 years old, and people were expecting you to make all these life-altering decisionswhat college to go to, what to study, what job path to take. And chances are, you probably made some mistakes along the way. And one of those slip-ups mightve been believing the lie that student loans were the only way to pay for college.
Fast forward to todayyoure a college graduate staring at a mountain of student loan debt. Your friends just told you about student loan forgiveness, and youre wondering if thats the right option for you.
It might seem like the government created student loan forgiveness programs because they understand the amount of financial stress graduates face as they struggle to pay back those loans. How nice of them, right? Sure.
The truth is, forgiveness programs are changing all the timeespecially with all the craziness happening in the world right nowmaking it a challenge to get those loans forgiven. Heres everything you need to know about these programs and how they actually work.
You Have At Least One Federal Student Loan That Is Not A Direct Loan Such As A Ffel Loan
You will need to submit a consolidation application and a PSLF form by October 31, 2022 to ensure that payments made on loans that are not Direct Loans can be counted toward PSLF. Right now, we encourage you to consolidate before using the PSLF Help Tool to certify employment. If you want to check your employers eligibility for PSLF before you consolidate, you can do so by logging into the PSLF Help Tool, which is available at StudentAid.gov/PSLF. If you have a mix of FFEL and Direct Loans, please refer to the sections above to understand how your Direct Loans will be affected.
We are working to update the PSLF Help Tool, but it will not be configured for borrowers with non-Direct Loans to submit a PSLF form until later this year. We will provide more information when this update is done.
To find out more about loan consolidation visit StudentAid.gov/Manage-Loans/Consolidation.
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Are People Really Getting Pslf
Absolutely! People were a bit disheartened to not see gobs of people receiving it in 2017, 10 years after the program was put in place. But in reality, few really knew about PSLF until 2010-2011. When I have polled doctors going for PSLF in the past, there were very few expecting to receive forgiveness in 2018-2020, but increasing numbers in 2021 and large numbers beginning in 2022 and 2023. There is a with 8450+ doctors in it and this was a poll done there at the beginning of 2020:
As you can see, there are very few people who have been forgiven so far in that group, but that’s simply because they are nowhere near the 120 required payments. However, look at those lines of people who have 50-80 payments! By 2025 or so, every doc is going to know someone who has received PSLF. By 2030, it may be the majority of mid-career academic docs!
Also, when the government reports things like only 1% of those who applied received it, they often fail to mention that the vast majority of those who applied didn’t qualify for it and didn’t even fill out the PSLF Forms correctly. It would be a real shame to see people bail out of going for PSLF after reading that statistic when it is so misleading. We have had numerous docs on The White Coat Investor Podcast and Milestones to Millionaire Podcast who have received PSLF. Here are a few examples:
Here are a few examples off of Facebook:
Student Loan Cancellation Programs
Workers in a number of public service occupations including teachers, nurses, medical technicians, firefighters, police officers, and librarians might qualify for partial or full discharges of their Perkins Loans.
Forgiveness is granted incrementally, and it typically takes up to five years to qualify for 100% forgiveness.
These programs include:
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What Are Ffelp Loans
The FFELP was a loan program that authorized private lenders to issue federal student loans. However, keep in mind that its different from the William D. Ford Federal Direct Loan Program.
The U.S. Department of Education offers student loans directly to borrowers with direct loans. They then contract third-party loan servicers to collect federal loans.
FFEL loan borrowers still make payments on their student loans even though the program isnt in existence.
Regarding the FFELP and FFEL, both terms are interchangeable and mean the same thing. The P in the Federal Family Education Loan Program stands for the program. Therefore, loans made through the FFEL program are known as FFEL Loans.
During the programs existence, there were four types of FFELP loans accessible to student loan borrowers:
Subsidized Stafford loans: With this loan, the government pays the interest while in school and during deferment and grace periods.
Unsubsidized Stafford loans: The government does not pay any interest on these loans.
Plus loans: These loans are available to graduate students and parents to assist with the cost of education.
Consolidation loans: Debts that combine multiple student loans into a single loan
Now, all federal student loans come from the Direct Loan Program.
Explore Your Repayment Options Now
Is Public Service Loan Forgiveness worth it? For some individuals, it could be. If you want to serve the government or a non-profit organization and you find yourself struggling with your monthly payments, you should consider this program.
However, the stringent requirements are not beneficial for most borrowers. Donât let your student loan debt weigh you down, though. There is an ideal repayment option for you.
At Chipper, weâve helped tens of thousands of members pay off loans four years faster, save an average of $307 on monthly payments, and achieve loan forgiveness. Become a member today to discover the best repayment solutions.
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Student Loan Forgiveness Vs Loan Discharge: Whats The Difference
Basically, when you dont have to make any more payments on your loan because of your job, its called forgiveness or cancellation. And when you dont have to make any more payments on your loan because of other situations, like a permanent disability, its called loan discharge.
Clear as mud, right? Student loan forgiveness can get confusing. Sometimes loan cancellation or loan discharge can kind of sound like the same thing.
Chances are, you heard these terms tossed around back when you took out your loans and thought, No big deal. I can just get all this debt forgiven or discharged later, and I wont have to worry about it.
But lets take a step back for a minute and look at the facts here. In reality, the chances of getting your loans forgiven seem about as predictable as winning the lottery.
It might look like the U.S. Department of Education is coming to the rescue through their student loan forgiveness programs. The only problem is that their requirements are pretty much up in the air depending on where you work, how many payments youve made, and whether or not the government changes their mind about who should qualify for forgiveness.