Faltering PSLF Program is Barely Stayin’ Alive, How’s the Fix Going?

Faltering PSLF Program is Barely Stayin’ Alive, How’s the Fix Going?

Pump. Pump. Pump. Thirty compressions at the rate of 100 compressions per minute to restart a heart. How fast is that? Experts suggest that pushing to the beat of the Bee Gees, Stayin’ Alive (with or without falsetto harmonies) will get you there. But what if your patient is unresponsive? What if you listen for a heartbeat that isn’t there? What if they are barely Ah, ha, ha, ha, stayin’ alive? In this case, the patient is doing even worse than the Public Service Loan Forgiveness (PSLF) program. The new patient is the Temporary Expanded Public Service Loan Forgiveness initiative (TEPSLF). It is a $350 million pot of money for those who received bad information from their loan servicers. PSLF: Just 96 out of more than 28,000 As has been documented, the PSLF program has higher failure rates than their published figure of 99.7 percent. Of the more than 28,000 applicants who thought they jumped through all the necessary hoops, only 96 were granted debt forgiveness. But this doesn’t account for all the other possible applicants.  Thousands more ran into obstacle after obstacle, or got bad advice. They either gave up somewhere along the way, or never even started. To qualify for PSLF, borrowers must:  work in eligible public service roles make 120 on-time monthly payments have the right kind of loan, since some federal loans qualify while others do not be in an income-driven repayment plan There’s, apparently, so much that can go wrong. A single late payment. Bad advice about which loan qualifies or which repayment plan to be in. As has been noted, DOE pays federal...
American Financial Benefits Center Clarifies PSLF Employment Eligibility Requirements

American Financial Benefits Center Clarifies PSLF Employment Eligibility Requirements

Public Service Loan Forgiveness (PSLF) is one of the most publicized student loan forgiveness programs, but it might be one of the least utilized. About a quarter of the workforce may be eligible based on their employment, but only about 739,000 borrowers have had their employment certifications approved. So why aren’t more people taking advantage of it? In some cases, borrowers might not realize their employment qualifies, especially if they are not a teacher, public defense lawyer, or police officer. American Financial Benefits Center, a document preparation company that helps federal student loan borrowers apply and recertify for income-driven repayment plans, looks at every client’s employer and helps align qualifying clients in the PSLF program. To be eligible for Public Service Loan Forgiveness, borrowers must make 120 qualifying payments while employed for a qualifying employer. What does that mean? A qualifying payment is a full, on-time payment made on loans in either the Standard or one of the income-driven repayment plans. A qualifying employer is either a government agency of any level or a 501(c)(3) nonprofit organization. Though a lot of attention is put on teachers and public defendants, job function is not considered for eligibility. “What a lot of people don’t realize about PSLF is that the employment requirements only apply to their employer, not their own work,” said Sara Molina, Manager at AFBC. “It’s not only teachers and firemen and people working directly with the public that are eligible for PSLF.” Because the qualifying employment requirement focuses on the employer and the company’s function rather than the employee, the possibilities may seem endless. A recent article reminds...
Grumbling toward a Solution: Smokers Help Pay down the Student Loan Debt of the Healthcare Professionals that Serve Them

Grumbling toward a Solution: Smokers Help Pay down the Student Loan Debt of the Healthcare Professionals that Serve Them

Most smokers are still grumbling because of a 2016 two dollar per pack tax increase on cigarettes. That’s a lot of cash, about $1.2 billion per year.  Grumbling or not, starting this year, SB-849 sets aside some money to decrease the student debt of doctors and dentists. The catch?    This money, an estimated $220 million, is designated for those devoted to providing care for the underserved. Serving the Underserved This program is in addition to the student loan assistance program for health care professionals initiated by Congress in 1987. Thus, the goal of this program is to boost the number of healthcare professionals in Health Professional Shortage Areas (HPSAs). HPSAs are geographic areas, populations, and facilities with too few primary care and dental providers. These areas traditionally include rural and Native American health centers, hospitals, correctional facilities, and state mental institutions. This bill allows the California State Department of Health Care Services to determine eligibility for the program. The assistance will be awarded to recent medical and dental school graduates who commit to working as Medi-Cal providers in underserved areas. Participating health care professionals must agree to 2-year full-time or 4-year half-time initial service commitments, with one year extension requests available. These are not desirable places for newly minted health professionals emerging from college with a mountain of debt to climb. But this is a significant amount of money, especially for one state. A Tax to Fix the Fix Consider that the amount for the national “fix” for the struggling Public Service Loan Forgiveness (PSLF) program is $350 million. That amount is for all US students who have run into...
American Financial Benefits Center Cautions Federal Student Loan Borrowers About Refinancing

American Financial Benefits Center Cautions Federal Student Loan Borrowers About Refinancing

What happens when federal student loan borrowers refinance? Refinancing might be right for certain borrowers, but refinancing federal loans means losing out on certain borrower protections, including the opportunity for forgiveness. American Financial Benefits Center (AFBC), a private document preparation company that specializes in applying for repayment plans, cautions federal borrowers when it comes to refinancing. “The things that are lost when a federal borrower refinances can be important,” said Brandon Frere, CEO of AFBC. “One of the biggest is forgiveness. Many people appreciate income-driven repayment plans because they know forgiveness is always an option at the end of the life of the loan.” Refinancing—which means a new loan pays off an existing loan or loans—is possible only in the private sector. This means a borrower must take out a private loan to replace the federal loan, so any protections that are exclusive to federal loans evaporate upon refinancing. These include, but are not limited to: Possibilities for forgiveness: Student loan forgiveness can come in many forms for federal student loan borrowers. One of them is forgiveness after a 20- to 25-year period if the borrower is in an income-driven repayment plan (IDR); another is Public Service Loan Forgiveness (PSLF) after at least 10 years of employment with a qualifying employer. There are various other federal programs that offer loan forgiveness. Opportunities to get out of default: There are a couple of ways for federal loan borrowers to get out of default that don’t involve immediately paying off the entire balance of the loan: rehabilitation and consolidation. Options for defaulted borrowers of private loans may be more limited and...