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Updates on Public Service Loan Forgiveness

June 14, 2019 | Adam S. Minsky, Esq. Articles Current Events Loan Forgiveness Policy & Reform

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Public Service Loan Forgiveness (PSLF) is a popular program that millions of student loan borrowers are depending on. PSLF provides for complete forgiveness of federal student loans after 120 “qualifying payments.” A qualifying payment is one made on a Direct federal student loan under an income-driven repayment plan or the 10-year Standard plan, while working full-time for a qualifying employer (typically a public entity or 501(c)(3) nonprofit organization).

The program has been a hot topic lately, especially in these polarized political times. It can be difficult to stay on top of the latest developments. Here’s where things stand.

Efforts to Repeal Public Service Loan Forgiveness

There have been two primary attempts to repeal the PSLF program. One was initiated by Congress through proposed legislation called the PROSPER Act. The other was initiated by the White House via a budget proposal. Neither proposal passed, and both would have grandfathered in current borrowers who are in repayment. Efforts to repeal the program continue, but under the current divided Congress, nothing is happening thus far.

Efforts to Protect Public Service Loan Forgiveness

While some lawmakers are trying to repeal the program, Senators Kirsten Gillibrand and Tim Kaine have filed a bill designed to shore up and streamline the PSLF program. The bill would make it easier to make qualifying payments towards the program, and it would expand the type of federal loans that are eligible for PSLF. Borrowers would also have a greater ability to dispute errors and mistkaes made by loan servicers.

Recent Expansion of Public Service Loan Forgiveness

Congress recently passed a bill creating the Temporary Expanded Public Service Loan Forgiveness Program (TEPSLF), which would allow certain payments that normally wouldn’t qualify for PSLF to actually qualify. The requirements of the program are rather absurdly complex. Nevertheless, borrowers – including a client of mine – have successfully gotten their loans forgiven under this program.

Significant Court Ruling on Public Service Loan Forgiveness

One of the potential issues with PSLF is that not all nonprofit organizations may qualify for the program. Employees of one such organization sued FedLoan Servicing and the Department of Education after they reversed their positions on whether employment qualifies PSLF. A federal court recently issued a ruling in favor of the student loan borrowers who brought the suit, finding that the Department of Education’s reversal was arbitrary and capricious. This is good precedent.

There Are Still Lots of Processing Delays and Denials

Recent statistics show that the vast number of people applying for PSLF have been denied. This is likely due to the complex requirements of the program that have been poorly communicated by loan servicers and misunderstood by borrowers, coupled with servicer delays and errors when counting qualifying PSLF payments. While I expect the numbers to gradually improve over the coming years, borrowers should remain vigilant and should make absolutely sure they are doing what they need to do to make progress towards the program and protect their rights.

Adam S. Minsky is an attorney focused entirely on helping student loan borrowers and their families. If you need an independent evaluation of your eligibility for (or progress towards) PSLF, contact his office.

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Articles Current Events Loan Forgiveness Policy & Reform

About Adam S. Minsky, Esq.

Adam S. Minsky founded the first law office in Massachusetts devoted entirely to assisting student loan borrowers, and he is one of the only attorneys in the country practicing in this area of law. He provides counsel, legal assistance, and direct advocacy for borrowers on a variety of student loan-related matters. He regularly speaks to students, graduates, and advocates about the latest developments in higher education financing.

Books by Adam S. Minsky

The Student Loan Handbook for Law Students and Attorneys

The Student Loan Handbook for Law Students and Attorneys

Student Loan Debt 101

Student Loan Debt 101: The Definitive Guide to Understanding and Managing Your Student Loans

Student Loans for Parents and Cosigners

The Student Loan Guide for Parents and Cosigners

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asminsky@minsky-law.com
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Boston, MA 02110

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