Student Loans: Public Service Loan Forgiveness Program (PSLF)

Let's talk about the PSLF program, the Public Service Loan Forgiveness program. And I want to start off by showing some statistics. As of 02-29-2020, the government released a.

Report showing the amount of PSLF applications, people attempting to get forgiveness and the amount actually accepted and the loans forgiven. I've highlighted this in blue. The number of applications that was submitted was somewhere around 165,000 or so. Actually you can see up above 178,642.

And the amount actually approved for forgiveness was 2,828. Why is that so abysmally low? Well, you got 125,877 that were denied for not meeting the program requirements per this report. This is a, this is a, this is a clip out of the report. And you had 37,599 that were denied for missing information. And here's what I've noticed as I've worked with people who are attempting to get PSLF is they have assumed that because they're working for a clinic or an Indian reservation or another government facility or a non profit somewhere else that they are automatically going to get their student loan forgiven. And after 10 years, obviously as you can see by the numbers that is not the case. Why? Well here's why people think that you simply.

Enroll that at the end of the 10 years you sort of enroll or you enroll and you enroll automatically by working for a company. Here's what it is. You don't actually enroll in the PSLF program. You have to qualify for the PSLF program. And qualification requires three things. They are, number one, you have to be working in the right job that's a government or most nonprofit organizations and working at least 30 hours a week. So you have to, you qualify by one, having the right job. Number two, you have to have the right loan that is going to be a direct loan. Can't be a FFEL loan, can't be a private loan, can't be a Perkins loan. This has to be a direct loan and it can be an ibr, it can be a pay, it can be a repay, it's totally okay. And in addition to being the right loan, well really that's number three. So I'm already jumping into number three. Number two is that it's just a direct loan from the government. Number three, that it's the right payment plan which can be your standard 10 year repayment plan if you come out of school and just take the default or if you move into an income driven repayment plan, the pay IBR and repay, then those all qualify for it as well. Now, there are applications on studentaid.gov that need to be completed and submitted to the Department of Education in order for this to be evidenced and therefore them accepting it. Remember, the government isn't just going to want to forgive half a million dollars of student loans after 10 years because you work for a public entity or for a charity. They will. And the current administration, as of 2020, Trump administration, is trying to do away with the PSLF completely because student loans, which are at $1.6 trillion of debt right now, are creating this sort of tidal wave out on the horizon coming toward us over the next 15, 20, 25 years. And our deficit is already so dramatic, our national debt is so dramatic that as we get rid of, as they forgive these, they're removing assets off the US Government's balance sheet. They're removing assets. What happens to the government's.

Economic condition? It just gets worse. And so the government I think is going to see, we're going to see a lot of changes around, I think the pslf. We're going to see a lot of changes around the IDRs, possibly a consolidated one, one that maybe isn't so generous on the debt discharge. Anyways, I'm off topic a little bit, but it's important that if you are going for the PSLF program and that you, that you make sure you actually confirm that your payments are receiving an affirmation from the government that they satisfy the PSLF requirements. Here's a few important things to note. Number one is that with every employer you have to certify, you must certify every time. And if you change, you need to certify with the new employer. Don't take that for granted. You got to fill out the form and let your student loan servicer know that. Number two is you should log into the studentaid.gov site to determine the number of payments that qualify. And they call it the PSLF Cumulative Match Months. And I showed that in our walkthrough of studentaid.gov and also that if you are working toward the PSLF, you should complete and submit the Public Service Loan Forgiveness Employment Certification form, often referred to as the ECF annually when you change or when you change employers. So that dovetails into the first one above as well. Now I had mentioned that you have to be using the, I believe it's the Fed Loan Servicing Loan Servicer of those nine servicers, which is the one that's specifically set up to handle loans being processed to receive forgiveness through the PSLF program. Bottom line I love to give bottom lines is don't take it for granted that your student loan payments while you're working for a qualified.

Entity, the government or a not for profit Indian reservation oftentimes qualified had a number of people that have worked on those as well. Don't just assume that you are on track to get your forgiveness after the 10 years. You have to be checking that a few times during the year, making sure that every payment is counting in studentaid.gov and therefore you know that you have evidence that you will receive in order to receive the forgiveness. On that very important points.