Category: Loans/Mortgage

What happened and what you can do about it?

In May 2018, the U.S. Department of Education announced the details of the Temporary Expanded Public Service Loan Forgiveness program. This program provides for student loan forgiveness for borrowers who previously chose an ineligible repayment plan as part of the Public Service Loan Forgiveness program. The Public Service Loan Forgiveness program is a federal program that forgives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in an eligible federal, state or local public service job or 501(c)(3) non-profit job who make 120 eligible on-time payments over 10 years.

Here’s the important part that many of these applicants – including the 71% who were rejected for this reason – missed. To apply for this expanded student loan forgiveness program, you had to meet all the requirements for the Public Service Loan Forgiveness program, but you mistakenly enrolled in an ineligible repayment plan (such as the graduated or extended repayment plans). You with me?

How To Apply For Temporary Expanded Public Service Loan Forgiveness

Ok, so how do you avoid the fate of the 99% who were rejected from this expanded student loan forgiveness program?

Here’s what you need to know to ensure that you qualify:

1. You must work for a qualifying public service employer in a qualifying public service role

Typically, there are two types of employers: a) state, local and federal government; and b) 501(c)(3) non-profit.

2. You must have direct, federal student loans

The Public Service Loan Forgiveness program does not forgive private student loans – even if you work in public service. If you’re not sure what type of student loans you have, check with your student loan servicer or through Federal Student Aid. If you have FFEL loans, you need to consolidate your student loans into a Direct Consolidation Loan with the federal government to qualify for Public Service Loan Forgiveness.

3. You must be enrolled in a federal repayment plan

You also must be enrolled in an income-driven federal repayment plan, and make the majority of your payments under the plan. You can determine which student loan repayment plan works best for you with these student loan calculators.

4. You must have applied for Public Service Loan Forgiveness

This is critical. Do not skip this step. You must have applied for the Public Service Loan Forgiveness program and made some or all of your payments under a repayment plan that did not qualify. Then, you were rejected solely because you enrolled in an ineligible student loan repayment plan.

How do you apply for Temporary Expanded Public Service Loan Forgiveness?

There are two easy steps:

1. Email FedLoan Servicing at TEPSLF@myfedloan.org to request that the Education Department reconsider your eligibility for Public Service Loan Forgiveness.
2. Include the same name under which you submitted your Public Service Loan Forgiveness application and your date of birth in the email.

Sample Email Template

Here is a sample template email that you can use:

To: TEPSLF@myfedloan.org

Subject: TEPSLF request

I request that the U.S. Department of Education respectfully reconsider my eligibility for public service loan forgiveness.

• Name: [Enter the same name under which you submitted your Public Service Loan Forgiveness application]
• Date of Birth: [Enter your date of birth in MM/DD/YYYY format]

Thank you for your consideration.

Sincerely,

Your Name

You will receive a response from FedLoan Servicing once your request has been reviewed. Separately, you can contact FedLoan Servicing at 1-855-265-4038 from 8 a.m.– 9 p.m. Eastern time, Monday through Friday.

What if you don’t work in public service?

While you could try for student loan forgiveness through an income-driven repayment plan, it may take 20 to 25 years to receive forgiveness and your student loans may be paid off by then. There’s a more proactive approach.

Student loan refinancing can lower your interest rate, which can save you substantial money in interest payments. With student loan refinance, you can combine your existing private student loans, federal student loans or both into a new, single student loan with a lower interest rate and one monthly payment. This student loan refinancing calculator shows you how much you can save.

You won’t have access to federal repayment plans and benefits, but many private student loan lenders now offer forbearance and deferral programs for economic hardship. The higher your student loan balance, the more you can potentially save.