‘Why didn’t you forgive my student loans?’

(Photo by Bill O’Leary/The Washington Post via Getty Images)

An educator thought she was on the right track to qualify for student loan forgiveness.

She made the payments. She thought she had done everything right.

Then she was told years later that she didn’t qualify.

Here’s what you need to know – and how you can avoid his fate.

New lawsuit: student loan forgiveness

As first reported by NPR, Debbie Baker, director of education at a nonprofit in Tulsa, Oklahoma, expected her $76,000 student loan debt to be forgiven through the Public Service Loan Forgiveness program, a federal program of the United States Department of Education which cancels federal student loans. for people working in the public service.

According to Baker, her student loan officer – the company responsible for collecting and managing her student loan repayments – told her for nine years that she met all the requirements for loan forgiveness from the service. public. As such, Baker believed that all of her federal student loan would be forgiven upon meeting the program requirements, which she believed she had met. However, after making her usual monthly payments under an income-driven repayment program, the US Department of Education said she was ineligible for student loan forgiveness. You can imagine Baker’s reaction.

Now Baker is a plaintiff in a new court case filed by the American Federation of Teachers, one of the nation’s largest teachers’ unions, against the US Department of Education, led by Secretary Betsy DeVos. The lawsuit alleges, among other things, that:

  • the civil service loan cancellation program is “grossly mismanaged” and
  • the program, as currently administered, violates the Due Process Clause of the Fifth Amendment to the United States Constitution
  • The U.S. Department of Education is aware that student loan servicers misrepresent borrowers, resulting in borrowers being rejected for student loan forgiveness and suffering financial and other harm.

Did Baker get bad information from her student loan officer? Was it Baker’s responsibility to understand all the program requirements? Is the program administered correctly? What is the appropriate role for student loan servicers – advisors or student loan payment collectors? Many of these issues could be resolved as a result of this lawsuit.

Liz Hill, press officer for the Education Department, said NPR: “The Department has improved internal processes and improved communications and outreach to borrowers.” Hill also referred to automation PSLF Helper Tool which helps borrowers cancel utility loans, including repayment requirements and plans.

So why didn’t Baker qualify?

Student Loan Forgiveness

the Civil Service Loan Cancellation Program is a federal program created by Congress in 2007 that waives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in eligible federal, state, or local government or 501 (c ) (3) non-profit jobs that make 120 qualifying one-time payments. To date, only about 1% of borrowers who have applied for the program have been granted student loan forgiveness.

Baker did not qualify for civil service loan forgiveness because her student loans did not qualify. Here’s what you need to know to avoid his fate.

To qualify, you must have direct student loans. Baker had FFEL loans, which are not direct loans. What do you do if you have FFEL loans and want a utility loan forgiveness?

Baker should have consolidated his FFEL loans into a direct consolidation loan. FFELs are not considered federal student loans because they were issued by financial institutions such as banks, not the federal government. 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, you may need to consolidate those student loans.

How to consolidate FFEL loans? If you decide to consolidate these student loans, you can do so by StudentLoans.gov.

It is important to note that if you are consolidating FFEL loans, only your student loan payments made after you are consolidating are eligible for the Civil Service Loan Relief. For example, if you made 50 payments on your FFEL loans and then consolidated those loans into a direct consolidation loan, you will (unfortunately) have to make an additional 120 payments to qualify for the civil service loan forgiveness.

Cancellation of civil service loans: additional resources

1. Student Loan Calculator

Remember that you should also make the majority of your federal student loan payments under an income-driven repayment plan. This student loan calculator can help you choose the best income-oriented plan for you.

2. Student loan repayment plan

This free student loan repayment quiz can help you determine which student loan repayment options, including student loan forgiveness, are best for you based on your personal circumstances.

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