4 Reasons Why Student Loan Forgiveness Applications Are Rejected

Student Loan Consolidation

student loan forgiveness

The media is at it again. Maybe you’ve seen the headlines. 99% of all student loan forgiveness applications are rejected.

As student debt is reaching all-time highs, and people want relief. When the story broke that most weren’t getting that relief, there was an uproar. The reason has more to do with the Public Service Loan Forgiveness program.

Of course, there are going to be fewer applications approved in the first year. This isn’t the first year of the program, but rather the first-year eligible debts could be forgiven after the law was signed ten years ago. In order to qualify for student loan forgiveness, the borrow has to make 10-years of qualifying payments.

Qualifying payments had to begin around October in 2007. Some of those qualifications include working in a service or government related job during that time.

Here are 4 reasons why:

1) Their Loans Were Ineligible

To qualify for student loan forgiveness, you had to have a certain type of loan. Only federal direct student loans could qualify. Going back to 2007 when the program was created, only 21% of the student loans out there were direct loans. The rest of the loans at that time were undertaken by a guaranteed program that has gone under.

Today, you’ll find that most loans fall under the federal direct category. The rejected a lot of loans for this reason. Most of the loans taken in 2007 didn’t qualify. Those former students will have to pay their loans back in full. Now that the majority of student loans are federal direct loans, they’ll qualify in the future.

2) An Insufficient Record of Qualifying Payments

Another big reason why student loan forgiveness applications were rejected was fewer borrowers made the payment deadline. You must make 120 qualifying payments, which equates to 10 years. They also have to be working a service or government job during that time. Not reaching these requirements will disqualify you.


It’s been 10 years since they signed the law. That means to qualify for student loan forgiveness, the borrower couldn’t have missed any payments. If they took some time off of work and/or stopped paying for a time, they would still have a few payments left to qualify.

3) They’re on the Wrong Repayment Plan

This is a confusing part of the process. There are several repayment plan options out there, but there’s only one that qualifies for student loan forgiveness. If the borrower selected the wrong repayment plan, their application was denied. There is good news though. Congress has stepped in to allow eligible repayment plans to qualify.

So, while many borrowers had their forgiveness applications denied, Congress approved them. These approvals aren’t in the initial statistics by the media. If you were denied due to being on the wrong repayment plan, go ahead and resubmit as soon as possible.

4) Errors in the Paperwork

28% of all the applications denied for student loan forgiveness was done so due to “missing or incomplete information.” We can’t say how many of those 8,000 applications would’ve received forgiveness if all the information was complete. Yet, the Department of Education has stated that borrowers denied for this reason can resubmit with their complete information.

So, if you see the news headline decrying that 99% of student loan forgiveness applications are denied, there are good, reasonable reasons why. Follow the guidelines and you’ll be fine. It is easier to obtain student loan forgiveness. They are constantly working to create better laws.

Last modified: January 14, 2019