What You Need to Know About Student Loan Forgiveness in 2018
The Public Service Loan Forgiveness (PSLF) program is an initiative that was started in 2007 which encourages college students and graduates to choose full-time careers in government, public service, and nonprofit positions. In exchange, after making 120 on-time qualifying payments, students could have their student loan balances forgiven.
Come 2017, many public-service workers started to apply for loan forgiveness. But, around 553,000 borrowers were shocked to discover that they didn’t qualify for the program.
This led to lawsuits and other legal action, the good news is that as of April 2018, Congress has set aside $350 million to be put towards relieving student loan debt for borrowers who were told they weren’t eligible for PSLF.
The money, which is slotted under the Temporary Expanded Public Service Loan Forgiveness program, is available on a first come first serve basis. In order to be eligible you must meet all of the requirements for the PSLF program but show that you were enrolled in a repayment plan that isn’t eligible, such as graduated or extended repayment plans.
How to Qualify
In order to be eligible for student loan forgiveness under the temporary program, there are certain requirements you must meet.
- Applied and been rejected
First things first, in order to be eligible for secondary student loan forgiveness, you must have already applied for loan forgiveness through the traditional PSLF program and been denied.
- Ensure you have the right type of loans
If you’re like most graduates, you have a variety of student loans. But, only certain loans qualify for loan forgiveness. The only loans that qualify for the program are direct federal student loans. Private loans, Perkins loans, and any other type of student loan doesn’t qualify for loan forgiveness.
Unsure about the type of loans you have? Check with your student loan servicer or you can check on your own using Federal Student Aid.
For graduates who have federal student loans that aren’t direct loans, you can consolidate your existing loans into a Direct Consolidation Loan. This makes you eligible for loan forgiveness.
- Work for a qualifying public service employer and role
In order to qualify for the PSLF program, you must work for a qualifying employer in a qualifying role. Eligible employers include local, state, or federal government as well as 501(c)(3) non-profit companies. If you have an employer that doesn’t fit into either one of these categories, it’s best to contact the U.S. Department of Education to determine if your company and work role qualify.
It’s also worth noting that you must also work in a qualified work role, which must be a public service role. Any non-public service work makes you ineligible for loan forgiveness.
- Enroll in a federal repayment program
Not only must you make 120 on-time monthly payments (10 years’ worth of payments) before qualifying for loan forgiveness, you must also already be enrolled in an income-driven federal repayment program.
There are several repayment programs that are eligible for loan forgiveness including:
- Income-Based Repayment Plan (IBR Plan)
- Revised Pay As You Earn Repayment Plan (REPAYE Plan)
- Pay As You Earn Repayment Plan (PAYE Plan)
- Income-Contingent Repayment Plan (ICR Plan)
You can apply for these repayment programs through your loan servicer. Other qualified repayment programs include the Extended Repayment Plan, Graduated Repayment Plan, Consolidation Graduated Repayment Plan, and the Consolidation Standard Repayment Plan.
How to Apply
Once you’ve determined that you meet the requirements for Temporary Expanded Public Service Loan Forgiveness, the next step is to apply. The good news is that applying is quite simple.
Email FedLoan Servicing at mailto:[email protected] and request that the U.S. Department of Education reconsider your eligibility for loan forgiveness. In your email be sure to include your name that was used on the Public Service Loan Forgiveness application along with your date of birth.
FedLoan Servicing will respond once they have reviewed your request.
Not Eligible? There Are Other Options
Even if you don’t qualify for federal student loan forgiveness, you’re not out of options. Many students who are ineligible for loan forgiveness choose to refinance or consolidate their student loans in order to make repayment much less of a hassle.
If you have a combination of federal and private student loans, consider refinancing. This allows you to combine existing loans into one single loan, often with a lower monthly payment and interest rate. Consolidation is a great option if you have several federal loans and would prefer to have a single loan, which makes managing and budgeting much less of a headache.
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