The pursuit of student loan cancellation involves a decade of meticulously recorded payments, hours of waiting with your service agent, and endless patience. Success, however, comes without much fanfare.
Public Defender Shelly Tomtschik was in court when she received the email informing her that the quest was over:
“Congratulations! After a final review of your Public Service Loan forgiveness (PSLF) application and payment history, we have determined that you have successfully made the required 120 monthly payments in order for the loans listed below. below are canceled.
“It didn’t strike me,” says Tomtschik, 40, of Baldwin, Wisconsin. “I thought it would be more official or something.”
Tomtschik was one of the first federal student loan borrowers to get their direct lender loans canceled tax free through the federal government. Public service loan forgiveness program. The program, launched in 2007, waives any outstanding balances after 120 qualifying payments for borrowers in traditionally lower-paying public service jobs.
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But the process is delicate. Only 864 of the 88,006 applications filed had been approved as of March 2019, based on the latest data available from the Ministry of Education. The average amount awarded: $ 59,244.
What it takes to get a public student loan forgiveness
To be eligible for the PSLF, borrowers must make 120 on-time monthly payments while working full-time in the public service for an eligible employer. You must also:
- Make sure you only have federal direct loans. Some borrowers will need consolidate in a direct loan. Private loans are not eligible.
- Join an income-based repayment plan. Your payments will be a part of your discretionary income.
- Make sure your loans are handled by FedLoan Servicing, the only company that processes PSLF requests. You can do this by submitting an employer certification form.
- Submit employer attestation forms to prove that you worked for a government or qualifying non-profit employer while making the 120 payments.
- Apply while you are still working for an eligible employer.
Tomtschik and another successful candidate, Bonnie Svitavsky, librarian in Washington state, might add another requirement: document everything.
Svitavsky, a 38-year-old supervisory librarian at the Pierce County Library, made payments for two years before finding out they would not count towards the PSLF. This is because his loans were not on a qualifying repayment plan.
“It was disappointing to say the least,” she says.
To avoid any future surprises, Svitavsky set alarms to submit certification forms and recorded the details of the calls to FedLoan.
“It was crazy, but it was helpful to go back and see that I had these conversations,” she says.
For five years, Tomtschik did not submit employment certification forms, although she was granted credit for most of her payments. But once she got started, she realized the benefit: making sure every payment counted.
“Make sure you do the annual certification, so if there is a discrepancy in the number of eligible payments, correct it immediately rather than trying to go back,” says Tomtschik.
More than half of PSLF requests were rejected because they did not match the number of eligible payments, according to the education ministry. Some of the other reasons include missing information (25%), ineligible loans (16%), invalid employment dates (2%), or an ineligible employer (2%).
Read the rules – all
Tomtschik and Svitavsky could argue for another requirement: pay attention to detail.
Before submitting his first employment certification form, Tomtschik made additional payments of up to $ 800 to repay a debt of $ 70,000. “I was willing to do anything just to make it,” she says.
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But making more payments won’t help you reach 120 qualifying payments faster. Once Tomtschik started working for PSLF, she stopped sending additional payments.
When Svitavsky heard about a new program – the Extended Public Service Loan Temporary Forgiveness – she realized that forgiveness might come sooner than she thought. This is an allowance of $ 350 million for borrowers who met all of the PSLF criteria but made payments under the wrong scheme.
This meant that the two years of payments that had not counted towards Svitavsky’s forgiveness could now do so. Last fall she applied, was turned down and had to contact FedLoan to say she believed she qualified (this is a required practice when applying for the Temporary Expanded Program). In the spring, after months of quarrels, she finally obtained forgiveness.
Headaches are worth it
When Tomtschik’s loans were canceled last spring, her balance was $ 86,200, $ 16,000 more than what she originally borrowed.
Read: The real cost of this student loan
“I’m happy to know it’s gone. My husband still has student debt that we will eventually pay off, ”says Tomtschik.
Svitavsky, meanwhile, said she had $ 80,971 of her original debt of $ 97,115 written off. Between submitting her first certification form in 2013 and obtaining the pardon in April 2019, she paid nearly $ 20,000 in interest and less than $ 7,000 in principal.
“It’s been this long, weird blur,” says Svitavsky.