Many Americans are plagued by student loan debt. As a result, federal forgiveness programs have emerged with the intention of helping relieve the burden of student loan debt. Of these initiatives, the Public Service Loan Forgiveness (PSLF) program is one of the most popular and most complicated. The rules and conditions outlined in the PSLF are complex, and as a result, thousands of applicants don’t understand the terms of the program and are rejected.
If you are struggling to pay off your student loans, you should consult with a skilled debt settlement lawyer. Outlined below is some valuable information on the PSLF program and how to improve your chances of receiving federal student loan forgiveness.
The Public Service Loan Forgiveness Program: How It Works
The PSLF was created to help Americans escape the burden of student loan debt but requires applicants to meet certain conditions. In its terms, the PSLF states that in order to be approved, you must agree to work an “eligible” job for 10 years and make 120 on-time payments. If you agree to and meet these conditions, your loan balance will be forgiven. While this may sound appealing, data released by the U.S. Department of Education suggests otherwise.
As of April 2020, 150,545 borrowers had applied for the program, and a mere 3,376 were approved—that’s a little more than 2 percent of all applications. As a result, this program has done little to help Americans absolve their student loan debt. The U.S Department of Education has cited the following issues as some of the common reasons why applications are rejected:
- The applicant does not have enough qualifying loan payments to be eligible for the program
- There was missing information on the application
- The applicant’s student loans are not eligible for the program
In order to boost your chances of having your PSLF application approved, you have to pay close attention to the program’s requirements. Below are some ways to boost your chances of approval.
Make Sure You Have the Right Loan Type
Direct Loans are the only loans that are eligible for the PSLF. Direct Loans are provided by the U.S. Department of Education under the William D. Ford Federal Direct Loan Program (FDLP). Other kinds of federal loans are not eligible for the PSLF. However, if you don’t have direct loans, there are some ways that you can still qualify for the program. For example, you could consider consolidating your existing loans with a Direct Consolidation Loan.
Make Sure You’re on an Income Repayment Plan
To qualify for PSLF, not only do you have to have the proper type of loan, but you also have to be on an income-driven payment plan. Income-driven payment plans work by requiring participants to pay back their loans through a percentage of their income for a fixed period. After the period passes, the remaining loan balance is forgiven. If you are currently using a different kind of payment plan for your student loans, you’ll need to switch to an income-based plan before you apply for PSLF.
You Need to Have a Specific Kind of Job
One of the last conditions of the PSLF is that you must be a full-time employee for a U.S. federal, state, or local government or a non-profit organization. In order to provide proof that your employment is covered under the PSLF, you’ll need to fill out an Employer Certification Form every year.
Contact a Skilled Student Loan Lawyer
At McCarthy Law, our attorneys are dedicated to helping students pay off their student loans. Under our student loan debt settlement program, our licensed attorneys negotiate with lenders to ensure our clients pay only a fraction of their original loan balance. To schedule a consultation with one of our skilled student loan settlement paralegals, call our office at (855) 976-5777 or fill out our online contact form.