It looks like things haven’t improved much for student loan borrowers: 99.5% of people who applied for public service loan forgiveness have been rejected.
Here’s what you need to know and what to do about it.
Student Loan Forgiveness: Debt Statistics
The U.S. Department of Education released the latest statistics for public service loan forgiveness:
As of September 30, 2018, 41,221 student loan borrowers submitted 49,669 applications for public service loan forgiveness.
Of that total, approximately 44,700 applications have been processed.
Of that total, more than 72% of applications have been denied due to student loan borrowers not meeting the program requirements. For example, borrowers did not have eligible student loans, make 120 qualifying payments or have qualifying employment.
Another 27% of applications for public service loan forgiveness were denied due to missing or incomplete information on the employment certification form.
The Education Department advised these rejected applications to submit an updated Employment Certification form annually.
So, who has been approved?
In the most recent quarter, approximately 420 applications have been approved and 206 borrowers have collectively received $12.3 million in public service loan forgiveness.
Combined with student loan forgiveness from June 30, only about 300 borrowers have received public service loan forgiveness based on more than 73,600 processed applications. That’s less than 0.5%.
Public Service Loan Forgiveness: Requirements
Don’t become another public service loan forgiveness rejection statistic.
If you are interested in public service loan forgiveness, please pay attention.
When it comes to the Public Service Loan Forgiveness program, the requirements can be tricky.
Here are 5 things to remember:
1. Public Service Loan Forgiveness: Requirements
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) non-profit job who make 120 eligible on-time payments.
The Trump Administration wants to end public service loan forgiveness and has advocated for a simpler, income-driven repayment plan.
2. Complete the Employment Certification Form
In addition to meeting the requirements for public service loan forgiveness, you must complete the Employment Certification Form.
How often should you submit the employment certification form for public service loan forgiveness?
You should submit this form to the U.S. Department of Education:
- when you begin a job in public service
- when you switch employers
- annually to ensure you’re on track
Remember, nearly 12,000 applicants for public service loan forgiveness submitted an incomplete Employer Certification Form in the most recent quarter.
3. 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 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.
This public service loan forgiveness calculator shows you which income-driven student loan repayment plan will maximize your student loan forgiveness.
4. Consolidate your federal student loans (if necessary)
Only Direct student loans qualify for public service loan forgiveness.
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.
You can consolidate federal student loans through StudentLoans.gov.
5. Refinance your private student loans
If you plan to have your federal student loans forgiven, you still need an action plan for your private student loans.
The good news is your can refinance private student loans and lower your interest rate – even if you are enrolled in public service loan forgiveness.
This student loan refinancing calculator helps show you much money you can save through student loan refinancing.