You’ve read the headlines: 99.5% of people were rejected for student loan forgiveness.
Here’s what to do about it so you never get rejected for student loan forgiveness again.
Student Loan Forgiveness
When it comes to Public Service Loan Forgiveness, it’s not as simple as saying you “work” in public service.
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) nonprofit job who make 120 eligible on-time payments.
It’s your employer that matters, not your role. For example, if you work with a non-profit, but are employed by a private company, this would not qualify for public service loan forgiveness.
According to data from the U.S. Department of Education, only about 300 borrowers have received public service loan forgiveness based on more than 73,600 processed applications. That’s less than 0.5%.
Let’s make sure you never get rejected for student loan forgiveness again. Make sure to follow these rules:
1. Always complete the Employment Certification Form
The number one thing you can do to ensure you’re on track for public service loan forgiveness is to complete the Employment Certification Form.
How often should you submit the employment certification form for public service loan forgiveness?
You should submit this form:
- when you begin a job in public service
- when you switch employers
2. Do not submit an Employment Certification Form with errors
Here are the most common mistakes on Employer Certification Forms:
- information on one certification form that does not match previous forms
- missing information such as an employer address
- not completing all the required fields
- correcting errors on the form, and then failing to place your initials next to the corrected errors
3. Ensure that your employer signs your employment certification form
Your employment certification form must be signed by an authorized official at your employer.
4. Enroll in an income-driven federal student loan repayment plan
To be eligible for public service loan forgiveness, you must be enrolled in an income-driven federal student loan repayment plan.
Remember, only federal student loans (not private student loans) are eligible for public service loan forgiveness. You also must make a majority of the 120 required payments while enrolled in a federal student loan repayment plan. While the 10 Year Standard Repayment Plan qualifies for public service loan forgiveness, your federal student loans would be paid off after 10 years so there would be no more student loans to forgive.
How do you know which income-driven student loan repayment plan is best for you? Well, it depends on your specific financial situation. This public service loan forgiveness calculator shows you which income-driven student loan repayment plan will maximize your student loan forgiveness.
5. Consolidate your student loans, if necessary
Remember, only Direct student loans qualify for public service loan forgiveness. So, if you have Perkins Loans, FFEL Loans or you borrowed student loans before 2011, you may need to consolidate these federal student loans into a Direct Consolidation Loan.
How do you know if you have Direct student loans?
You can check at Federal Student Aid. If you don’t see the word “Direct” next to your student loans, then you may need to consolidate those student loans.
How do you consolidate those student loans?
This is different than student loan refinance, which you can also do for your private student loans, which don’t qualify for student loan forgiveness. If you decide to consolidate those student loans, you can do so through StudentLoans.gov.
6. Re-certify your income each year
As the name suggests, your income-driven student loan repayment plan is based on your income. As your income may change each year, the federal government wants to ensure that you are still eligible for that income-driven student loan repayment plan.
Therefore, make sure to re-certify your income each year at studentloans.gov. At the same time, you can submit your annual Employer Certification Form.
Don’t become another student loan debt statistic.
The requirements for student loan forgiveness can be tricky. However, if you know what to look for, you’re less likely to be rejected for student loan forgiveness.
Now that you’re in the know, hopefully the path toward student loan forgiveness will be smoother.