October 2017 is upon us. You have paid your 120 payments and you are excited because, in October 2017, your student loans will be forgiven. Or will they?
Like so many other student loan borrowers, you may be in for a rude awakening. Many borrowers have already been told their loans do not qualify for forgiveness. In October, many more borrowers will learn their loans do not qualify for Public Service Loan Forgiveness (PSLF). Your plans for retirement, an easier life or just more money in your pocket just went out the window.
The requirements for having your loans forgiven under PSLF can be confusing at best. It was five (5) years after the start of the PSLF program that the government created a form for borrowers to fill out and send in to see if their loans qualified for PSLF. So, for the first five (5) years of the program, no one knew if they were meeting the requirements of the program. In 2012, many borrowers were shocked to learn their loans and employer and payments were not of the type that would qualify them for a forgiveness of their student loan debt. But, even the borrowers who received bad news in 2012 have a head start on the borrowers in 2017 who now realize they must begin the 120 payments all over again.
What are some of the reasons your loans would not be eligible for PSLF?
1. Your employer does not meet the definition of a “qualified employer” under the program definition.
2. You did not work at least 30 hours per week or meet your employer’s definition of full-time employment, whichever is greater.
3. You do not have loans under the William D. Ford Federal Direct Loan (Direct Loan) Program. FFEL loans are non-qualifying loans.
4. You did not pay your Direct Loan(s) under an Income-Driven Repayment plan.
5. You did not pay the full amount due on your invoice.
6. You paid your loans more than 15 days after your due date.
7. You paid your loans during an in-school status, grace period, deferment or forbearance – who knew those payments would not count!
Let’s face it. PSLF is a great program, but it has been handled poorly by the US Department of Education and their Student Loan Servicers. Borrowers trusted Student Loan Servicers such as Great Lakes, FedLoan Servicing, Navient, etc. to advise them of the rules concerning this program. With so many student loans to service, personal service was often impossible to implement not to mention a conflict.
Unfortunately, the Borrowers forgot an important fact. Trusting the Student Loan Servicer to advise you about your repayment options and forgiveness programs is the same as trusting the fox to guard the hen house!
The Student Loan Servicer works for the US Department of Education – they do not work for the Borrower. Now the result of trusting that sly fox of a Student Loan Servicer is coming back to bite many Borrowers who deserve but will not receive PSLF next month.
If you have been told you do not qualify for PSLF, do yourself a favor and let a qualified Student Loan Lawyer review your records of payment and employment before you throw in the towel. Paying less than a couple of hundred dollars for analysis is far better than walking away from the potential forgiveness of thousands of dollars in student loan forgiveness.