Loan Forgiveness ImageJune 17, 2022 — Social media is bursting with discussions about student loan forgiveness – from proponents who want to relieve some of the crushing debt as they grapple with astronomical gas prices and record inflation, to opponents who say previous generations paid off their loans, so this one should, too.

Whatever the outcome of that debate, some PEF members are already eligible for student loan forgiveness through the Public Service Loan Forgiveness Program. And some members who were not previously eligible, may now be after temporary changes to the program in the fall of 2021.

“On Oct. 6, 2021, the U.S. Department of Education (ED) announced a change to Public Service Loan Forgiveness (PSLF) program rules for a limited time as a result of the COVID-19 emergency. Throughout the emergency, ED has provided a variety of benefits to borrowers. Now, for a limited time, borrowers may receive credit for past periods of repayment that would otherwise not qualify for PSLF,” according to Studentaid.gov. “Under the new temporary rules, any prior period of repayment will count as a qualifying payment, regardless of loan program, repayment plan, or whether the payment was made in full or on time. But you do continue to need qualifying employment.”

This change will apply to borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by Oct. 31, 2022. 

PEF member keeps her eye on the prize

For more than 15 years, Christine Wade has worked as a licensed psychologist at the Office for People with Developmental Disabilities, making service to others her life’s work. When the PSLP program was created in 2007, Wade knew she wanted to work toward loan forgiveness.

The start was rocky.

“I wasn’t able to make the payments and you had to be on a specific repayment plan,” she said. “Due to life, I wasn’t able to afford those. I was on a forbearance for a number of years.”

Once she found a stronger financial footing, Wade began to build her case for forgiveness.

“I immediately started submitting employment certification forms to the program to make sure my employment qualified,” she said. “Every year, I would take the form to HR. I had so much debt I wanted my loans forgiven, so I followed it very closely.”

Over the ensuing years, her payments eventually reached the 120 required for forgiveness, helped in part by the 2021 waiver.

“In January 2022, forgiveness came,” she said. “It was amazing. I was forgiven $85,000 and refunded more than $11,000 in qualifying payments!”

For Wade, who kept up with the program and certifications, the process went relatively smoothly.

For others, not so much.

Persistence paid off

PEF member Rebecca Zobel’s husband Mark, also a PEF member, has worked for New York state for more than 18 years. With tens of thousands of dollars in debt, the couple decided to pursue the PSLP relief after learning details during a seminar organized by PEF.

“He applied and he was denied,” Zobel said. “I can’t remember exactly the reason. Then I ran into (PEF Region 3 Coordinator) Leisa Abraham last year, who said we needed to reapply, they had made eligibility changes. We did the whole application again and it was denied again. I really thought that was it.”

Zobel and her husband knew he had the required time in and he had always made payments on time. The couple couldn’t imagine why they had been denied.

“We were so upset about it,” she recalled. “You couldn’t call or email.” After repeated denials, the Zobels suddenly received a check in the mail labeled “loan forgiveness” for around $3,000. “No explanation, no letter. We went online to the portal and the loan balance was zero.”

They still don’t know what happened or what prompted the denials, but Zobel advised other PEF members who believe they qualify to apply again, even if they are denied.

“Keep applying,” she said. “Check the information on the portal. Find out why you were denied; maybe you shouldn’t have been. If it wasn’t for Leisa, I don’t know if we would have known to reapply. I owe PEF a big thank you.”

She said the loan forgiveness program can be a major boost to state employment, if it continues.

“I would advocate for folks just graduating with loans to try to come to the state or work for a nonprofit,” she said. “It might really be worth it.”

PEF MBP webinars, details on loan forgiveness

PEF Membership Benefits is hosting a series of webinar sessions on loan forgiveness. The no-cost, live webinar with Cambridge Credit Counseling is detailed and includes a live Q&A session at the end to address any questions you may have.  Register now and learn about the temporary revisions made to the PSLF program, as the revisions in place expire October 31, 2022.  Click here for details, dates and to register. For general information and eligibility requirements, visit PEF MBP’s information page here.