You’ve probably read all the scary headlines. They bemoaned the fact that 99.5% of all people who applied for student loan forgiveness were rejected. They even tried to make it into a political stunt, suing the government. But the reality is, those people didn’t read the fine print. There are valid reasons why those people were rejected.
Signed into law by President Obama, the Public Service Loan Forgiveness law offers full student loan forgiveness to those who qualify. To qualify, they have to make 120 on-time payments while being employed full-time by a public service job. It sounds easy enough, but too many people applied believing they qualified for the program.
Except, it’s not enough to just say you work a public service job. Again, it’s all about the fine print. For example, you can work in a non-profit but still be employed by a private company. That would disqualify you for student loan forgiveness. There was a teacher who thought she qualified, but her district was controlled by a private company and it disqualified her.
What matters here is who your employer is, not the role that you play within the company. You can still be doing public service work, but be employed privately. That means only 300 of the 73,600 applicants actually received student loan forgiveness. In order to receive a full pardon from your federal student loan, there are ways to ensure it gets done.
How to Make Sure You Get Full Student Loan Forgiveness
If you’re not sure if you qualify for student loan forgiveness, there are several things you can do. In fact, you should do these things even if you’re certain you qualify. There may be a circumstance you don’t realize. You don’t want to wait until the end of your 120 payments only to find out you didn’t fully qualify.
Here are three things you can do to prevent getting rejected:
1) Complete the Employment Certification Form
This is the best thing you can do to ensure you qualify for student loan forgiveness. When you take this step, you’ll know whether your employment is actually considered public service. Again, if your employer is a privately-owned company, you will not qualify. You shouldn’t just send it once, either.
This form should be submitted:
• When you begin your public service work
• When you switch employers
• Every year
2) Check your Employment Certification Form for Errors
This is another major issue people were coming across. It was found that many were filling out their forms incorrectly and were denied student loan forgiveness. Issues included:
• Mismatched information
• Missing information
• Not completing all required fields
• Correcting errors, but not initialing corrected errors
• Failing to get authorized signature from your employer
3) Failing to Enroll in an Income-Driven Repayment Plan
In order to receive student loan forgiveness, you have to enroll in a repayment plan. Only people with federal student loans can get their loans forgiven, so it would require you to ensure you’re eligible. You can choose the best repayment plan that works for you and your budget.
4) Failing to Re-certify Your Income Yearly
Because you have to enroll in an income-driven repayment plan, you have to certify your income. The government wants to make sure you still qualify and your repayment plan will depend on what you make. By not certifying, you can be denied student loan forgiveness.
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The process can be tricky, but as long as you follow these steps and stay on top of it, you will be good to go. Be sure to contact Financial Helpers if you have any questions.
