Public Loan Forgiveness Overhaul

[Velar Fricative]

Oct 6, 2021 7:31:43 GMT -5 formerlyak said:

This sucks for those of us who have been working in the public sector for 10+ years but refinance our federal loans for lower interest rates and they are now private loans. It will affect a lot of my colleagues who went back to school to get grad degrees for career advancement, tried to get into the PSLF program, but based on income would have to increase payments and the loans would be paid off before 10 years, so they could technically never get the loan forgiveness. But in a hcol area none of us could afford those payments so we refied to lower payments so we could afford houses and child care.

I haven't dug into details but this would apply to us too. Thankfully most of our loans will be paid off in about 1.5 years (yaaaaaay!!!) so I'm not super mad about this either.

[wildrice]

I mentioned on ML, I am pretty sure I qualify. I was in a similar boat as many where my HHI was too high for a number of years to make the income based payment make sense - for a while it was going to mean I was paying enough that I'd pay them off in less than 10 years, and the only reason I wasn't doing that already was because I couldn't afford it! More recently, my H finished his PhD and now that both of our loans are figured into the payment AND we are more financially able, I was going to get back on track with forgiveness and hopefully only have 5-6 more years. Despite finishing school 13 years ago, so I'd still be paying for close to 20 years even WITH forgiveness.

With this, I believe the years I was not on an income based plan will count. I've worked at non-profits my whole career (except for an 8 month temp job between non-profit jobs) so I should be well past the 10 year requirement. Now I just need to track down contact info from previous employers and then cross my fingers.

My H won't qualify for another 8.5 years so we'll still have a huge loan balance to pay on until then, but at least MY portion of the burden won't be there and it will reduce our overall household debt!

[Susie]

Oct 6, 2021 7:31:43 GMT -5 formerlyak said:

This sucks for those of us who have been working in the public sector for 10+ years but refinance our federal loans for lower interest rates and they are now private loans. It will affect a lot of my colleagues who went back to school to get grad degrees for career advancement, tried to get into the PSLF program, but based on income would have to increase payments and the loans would be paid off before 10 years, so they could technically never get the loan forgiveness. But in a hcol area none of us could afford those payments so we refied to lower payments so we could afford houses and child care.

MH pretty much falls into this group too.  He graduated from law school in 2006 with about $120k in SLs.  Although we weren't particularly HCOL, his first job was private sector (small firm, matrimonial & family law), and only paid $35k/year, no retirement plan, no benefits.  Everything felt HCOL on that.  It was a really hard financial start.

He moved to public service in 2008, and has been there ever since.  It paid better (I mean not amazing or anything, but better than $35k!), had better benefits, an actual retirement plan, and PSLF eligibility.  But the old PSLF program didn't really fit for us, so we refi'ed his loans.  13 years later, the $120k is now down to $42k, but now it's all private loans to keep the interest in check.  Again PSLF doesn't fit.

Meanwhile, we were simultaneously paying my SLs down from a starting balance of around $140k in 2007 to a current roughly $40k.  I have a couple federal loans still because I had better interest rates on some, but I've never been PSLF eligible.  It all feels like a chaotic cluster of poor planning, but IDK what better decisions we could've made at the time, with the information available.  

We're still a collective $82k away from complete payoff (omg) but down from $260k, it's hard to berate myself too hard.

[gretchenindisguise]

My loans have changed servicer's at least once. I'm able to find my payment details going back to March 2013, but not before then and I cannot for the life of me find who the servicer was before then. Does anyone have any idea how to track this down? I'm slightly losing my mind.

[freshsqueezed]

I also fall into the consolidated for a lower rate to private loan category. However, it seems they are saying we may be able to change back and qualify. I’m sure I somehow don’t qualify or something because I’m already consolidated but thought I’d share to see if anyone knows or better understands.

From the eligible loans section:


“Under normal PSLF Program rules, if you consolidate your loans, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF. Any payments you made on the loans before you consolidated them don’t count. However, if you consolidate these loans into a Direct Loan before October 31, 2022, you may be able to receive qualifying credit for payments made on those loans through the limited PSLF waiver. Learn more.“

studentaid.gov/manage-loans/forgiveness-cancellation/public-service

[CallingAllAngels]

I also never qualified since I consolidated my loans (all federal loans) prior to the creation of the PSLF program. I have worked in the public sector for well over 10 years. I paid off my loans just over a year ago, so this won't help me, but I tell myself that I benefited from a very low interest rate and the fact that I finished school before college costs really started to skyrocket. Hopefully this helps a number of people.

[Susie]

Oct 6, 2021 11:10:19 GMT -5 freshsqueezed said:

I also fall into the consolidated for a lower rate to private loan category. However, it seems they are saying we may be able to change back and qualify. I’m sure I somehow don’t qualify or something because I’m already consolidated but thought I’d share to see if anyone knows or better understands.

From the eligible loans section:


“Under normal PSLF Program rules, if you consolidate your loans, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF. Any payments you made on the loans before you consolidated them don’t count. However, if you consolidate these loans into a Direct Loan before October 31, 2022, you may be able to receive qualifying credit for payments made on those loans through the limited PSLF waiver. Learn more.“

studentaid.gov/manage-loans/forgiveness-cancellation/public-service

Sometimes people use "consolidate" and "refinance" interchangeably, but they're pretty different.  I would expect that people who consolidated may be able to benefit, but people who refinanced will not.

[leshoequeen]

I don't think I will qualify :-( I had loans that I paid through Sallie Mae and recently consolidated into Direct loans. I don't know if the Sallie Mae loans would count because I think they weren't federal loans. Also, I'm one of the many who called many times to confirm that I was on the right track for PSLF, was told I was, and now here I am - 14 years later. Does anyone know?

[Jalapeñomel]

Oct 6, 2021 11:41:04 GMT -5 leshoequeen said:

I don't think I will qualify :-( I had loans that I paid through Sallie Mae and recently consolidated into Direct loans. I don't know if the Sallie Mae loans would count because I think they weren't federal loans. Also, I'm one of the many who called many times to confirm that I was on the right track for PSLF, was told I was, and now here I am - 14 years later. Does anyone know?

You should be able to see if they were private or not online.

[pumpkin]

Oct 6, 2021 11:10:19 GMT -5 freshsqueezed said:

From the eligible loans section:


“Under normal PSLF Program rules, if you consolidate your loans, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF. Any payments you made on the loans before you consolidated them don’t count. However, if you consolidate these loans into a Direct Loan before October 31, 2022, you may be able to receive qualifying credit for payments made on those loans through the limited PSLF waiver. Learn more.“

studentaid.gov/manage-loans/forgiveness-cancellation/public-service

Ok, here is what I don’t understand. I have been paying on my federal loans under a consolidated fixed rate for ~15 years now. They were consolidated when I graduated from grad school and from what I understand have always been a direct loan; I didn’t go through a 3rd party to consolidate. So, does this mean that I might be able to make something work? I’m not will to give up my fixed less than 3% interest rate if I’m just going to have to essentially pay them all off since that sounds kind of dumb.

And Susie, I’m in almost exactly the same boat as your husband in that is graduated in 2005 with ~150K in federal loans and became a public sector employee in 2009; but was never able to become income base as I’m in a HCOL area. It’s super frustrating!

[wanderingback]

Oct 6, 2021 12:11:18 GMT -5 pumpkin said:

Oct 6, 2021 11:10:19 GMT -5 freshsqueezed said:

From the eligible loans section:


“Under normal PSLF Program rules, if you consolidate your loans, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF. Any payments you made on the loans before you consolidated them don’t count. However, if you consolidate these loans into a Direct Loan before October 31, 2022, you may be able to receive qualifying credit for payments made on those loans through the limited PSLF waiver. Learn more.“

studentaid.gov/manage-loans/forgiveness-cancellation/public-service

Ok, here is what I don’t understand. I have been paying on my federal loans under a consolidated fixed rate for ~15 years now. They were consolidated when I graduated from grad school and from what I understand have always been a direct loan; I didn’t go through a 3rd party to consolidate. So, does this mean that I might be able to make something work? I’m not will to give up my fixed less than 3% interest rate if I’m just going to have to essentially pay them all off since that sounds kind of dumb.

And Susie , I’m in almost exactly the same boat as your husband in that is graduated in 2005 with ~150K in federal loans and became a public sector employee in 2009; but was never able to become income base as I’m in a HCOL area. It’s super frustrating!

What do you mean you've never been able to switch to an income based plan because of your HCOL?
I'm sure there's details I'm not remembering but the income driven plan isn't prohibited due to where you live. The formula is I believe (don't quote me) it's 10% of your income and then they subtract a flat rate for living expenses (I can't remember the exact percentage) to determine how much you owe each month. Each year you just have to submit your tax returns for them to calculate the amount using that formula and that's how you qualify. I've lived in HCOL for several years and have had no problem qualifying for an income driven plan. 

[pumpkin]

Oct 6, 2021 12:19:40 GMT -5 wanderingback said:

Oct 6, 2021 12:11:18 GMT -5 pumpkin said:

Ok, here is what I don’t understand. I have been paying on my federal loans under a consolidated fixed rate for ~15 years now. They were consolidated when I graduated from grad school and from what I understand have always been a direct loan; I didn’t go through a 3rd party to consolidate. So, does this mean that I might be able to make something work? I’m not will to give up my fixed less than 3% interest rate if I’m just going to have to essentially pay them all off since that sounds kind of dumb.

And Susie , I’m in almost exactly the same boat as your husband in that is graduated in 2005 with ~150K in federal loans and became a public sector employee in 2009; but was never able to become income base as I’m in a HCOL area. It’s super frustrating!

What do you mean you've never been able to switch to an income based plan because of your HCOL?
I'm sure there's details I'm not remembering but the income driven plan isn't prohibited due to where you live. The formula is I believe (don't quote me) it's 10% of your income and then they subtract a flat rate for living expenses (I can't remember the exact percentage) to determine how much you owe each month. Each year you just have to submit your tax returns for them to calculate the amount using that formula and that's how you qualify. I've lived in HCOL for several years and have had no problem qualifying for an income driven plan. 

Oh sorry, I just meant I could never afford to do so. I remember looking into it when I started as a Fed and it would have been like 20% of my take home and I wouldn’t have been able to live off what was left at the time. It didn’t take into account the payments I was making on my private loans at the same time (I always kept them separate), etc.

[wildrice]

Oct 6, 2021 12:11:18 GMT -5 pumpkin said:

Oct 6, 2021 11:10:19 GMT -5 freshsqueezed said:

From the eligible loans section:


“Under normal PSLF Program rules, if you consolidate your loans, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF. Any payments you made on the loans before you consolidated them don’t count. However, if you consolidate these loans into a Direct Loan before October 31, 2022, you may be able to receive qualifying credit for payments made on those loans through the limited PSLF waiver. Learn more.“

studentaid.gov/manage-loans/forgiveness-cancellation/public-service

Ok, here is what I don’t understand. I have been paying on my federal loans under a consolidated fixed rate for ~15 years now. They were consolidated when I graduated from grad school and from what I understand have always been a direct loan; I didn’t go through a 3rd party to consolidate. So, does this mean that I might be able to make something work? I’m not will to give up my fixed less than 3% interest rate if I’m just going to have to essentially pay them all off since that sounds kind of dumb.

And Susie , I’m in almost exactly the same boat as your husband in that is graduated in 2005 with ~150K in federal loans and became a public sector employee in 2009; but was never able to become income base as I’m in a HCOL area. It’s super frustrating!

If your loans are federal and have always been federal, I think you would be eligible. I don't understand how you would be giving up your 3% interest rate - you won't be changing anything if you are already consolidated under direct loans. I don't think you have to re-consolidate - you probably don't have anything to consolidate at this point. The word is literal - it means putting all of your loans together into 1 loan instead of having multiple loans with multiple payments. If you only have  1 loan at this point, you are good.

[taratru]

DH talked me off my rage ledge, so I went online to do what I can right now. Got this. Not feeling super confident. 😂

[Jalapeñomel]

Oct 6, 2021 12:28:02 GMT -5 pumpkin said:

Oct 6, 2021 12:19:40 GMT -5 wanderingback said:

What do you mean you've never been able to switch to an income based plan because of your HCOL?
I'm sure there's details I'm not remembering but the income driven plan isn't prohibited due to where you live. The formula is I believe (don't quote me) it's 10% of your income and then they subtract a flat rate for living expenses (I can't remember the exact percentage) to determine how much you owe each month. Each year you just have to submit your tax returns for them to calculate the amount using that formula and that's how you qualify. I've lived in HCOL for several years and have had no problem qualifying for an income driven plan. 

Oh sorry, I just meant I could never afford to do so. I remember looking into it when I started as a Fed and it would have been like 20% of my take home and I wouldn’t have been able to live off what was left at the time. It didn’t take into account the payments I was making on my private loans at the same time (I always kept them separate), etc.

This is us too. IBR plans would be asking for a monthly amount we could never afford because everything here is so damn expensive.

[pumpkin]

Oct 6, 2021 12:34:37 GMT -5 wildrice said:

Oct 6, 2021 12:11:18 GMT -5 pumpkin said:

Ok, here is what I don’t understand. I have been paying on my federal loans under a consolidated fixed rate for ~15 years now. They were consolidated when I graduated from grad school and from what I understand have always been a direct loan; I didn’t go through a 3rd party to consolidate. So, does this mean that I might be able to make something work? I’m not will to give up my fixed less than 3% interest rate if I’m just going to have to essentially pay them all off since that sounds kind of dumb.

And Susie , I’m in almost exactly the same boat as your husband in that is graduated in 2005 with ~150K in federal loans and became a public sector employee in 2009; but was never able to become income base as I’m in a HCOL area. It’s super frustrating!

If your loans are federal and have always been federal, I think you would be eligible. I don't understand how you would be giving up your 3% interest rate - you won't be changing anything if you are already consolidated under direct loans. I don't think you have to re-consolidate - you probably don't have anything to consolidate at this point. The word is literal - it means putting all of your loans together into 1 loan instead of having multiple loans with multiple payments. If you only have  1 loan at this point, you are good.

Yes, thanks. I was thinking I’d have to change payment programs for anything left, but I don’t think that’s the case. Man, this was not the day to not have enough coffee.

[formerlyak]

Oct 6, 2021 12:42:47 GMT -5 Jalapeñomel said:

Oct 6, 2021 12:28:02 GMT -5 pumpkin said:

Oh sorry, I just meant I could never afford to do so. I remember looking into it when I started as a Fed and it would have been like 20% of my take home and I wouldn’t have been able to live off what was left at the time. It didn’t take into account the payments I was making on my private loans at the same time (I always kept them separate), etc.

This is us too. IBR plans would be asking for a monthly amount we could never afford because everything here is so damn expensive.

Me, too.


@@when I started paying mine off, I was a single parents receiving no child support in LA County required my my divorce decree to stay in the city we were in so as to not change ds' school (since I was the primary parent). 45% of my income was going to housing alone. Another 25% was paying for child care. The IBR plan would have doubled my student loan payment and there was no way I could afford that with 70% of my income already going to housing and child care. I qualified, it was just not affordable.

[lilypad1126]

Oct 6, 2021 12:35:52 GMT -5 taratru said:

DH talked me off my rage ledge, so I went online to do what I can right now. Got this. Not feeling super confident. 😂

Ha, I have been getting error messages today, too! I read here: www.ed.gov/news/press-releases/fact-sheet-public-service-loan-forgiveness-pslf-program-overhaul that they are updating the site/application to make this easier and applications for people in my position (who don't have a PSLF app already in) won't be available for a few weeks yet. So, I did actually gather my info for this, but I'm not going to worry about it for a few weeks at least.

[leshoequeen]

Oct 6, 2021 11:59:41 GMT -5 Jalapeñomel said:

Oct 6, 2021 11:41:04 GMT -5 leshoequeen said:

I don't think I will qualify :-( I had loans that I paid through Sallie Mae and recently consolidated into Direct loans. I don't know if the Sallie Mae loans would count because I think they weren't federal loans. Also, I'm one of the many who called many times to confirm that I was on the right track for PSLF, was told I was, and now here I am - 14 years later. Does anyone know?

You should be able to see if they were private or not online.

So it looks like mine were the FFEL Loans that are included in this program.  I won't get my hopes up, but according to the new rules, I should qualify.  This would be huge.  I'm super emotional about this today.  Its also been a shitty day in my public service job, so I'm sure that's part of it.  But if the government could quit playing with my emotions, that would be great!

[wanderingback]

Oct 6, 2021 12:42:47 GMT -5 Jalapeñomel said:

Oct 6, 2021 12:28:02 GMT -5 pumpkin said:

Oh sorry, I just meant I could never afford to do so. I remember looking into it when I started as a Fed and it would have been like 20% of my take home and I wouldn’t have been able to live off what was left at the time. It didn’t take into account the payments I was making on my private loans at the same time (I always kept them separate), etc.

This is us too. IBR plans would be asking for a monthly amount we could never afford because everything here is so damn expensive.

Ahh ok got it.
Income based was always the lowest payment option for me. So the standard payment plan is less than income based for you?
It's so frustrating. Also 7% + interest rate is highway robbery. I hate that I have that interest rate on $350,000!

[pumpkin]

Oct 6, 2021 14:30:36 GMT -5 wanderingback said:

Oct 6, 2021 12:42:47 GMT -5 Jalapeñomel said:

This is us too. IBR plans would be asking for a monthly amount we could never afford because everything here is so damn expensive.

Ahh ok got it.
Income based was always the lowest payment option for me. So the standard payment plan is less than income based for you?
It's so frustrating. Also 7% + interest rate is highway robbery. I hate that I have that interest rate on $350,000!

To be honest, I have no idea what the standard repayment would have been for me; is everything always been under the extended consolidated plan.

When I graduated from grad & law school the head of our financial aid department was awesome and gave a seminar and since I didn’t have a job I followed her advice and paid on my private loans separately and consolidated my federal loans into one Fed loan. So I was essentially paying 3 different lenders before I got my private loans paid off.

[freshsqueezed]

Oct 6, 2021 11:24:38 GMT -5 Susie said:

Oct 6, 2021 11:10:19 GMT -5 freshsqueezed said:

I also fall into the consolidated for a lower rate to private loan category. However, it seems they are saying we may be able to change back and qualify. I’m sure I somehow don’t qualify or something because I’m already consolidated but thought I’d share to see if anyone knows or better understands.

From the eligible loans section:


“Under normal PSLF Program rules, if you consolidate your loans, only qualifying payments that you make on the new Direct Consolidation Loan can be counted toward the 120 payments required for PSLF. Any payments you made on the loans before you consolidated them don’t count. However, if you consolidate these loans into a Direct Loan before October 31, 2022, you may be able to receive qualifying credit for payments made on those loans through the limited PSLF waiver. Learn more.“

studentaid.gov/manage-loans/forgiveness-cancellation/public-service

Sometimes people use "consolidate" and "refinance" interchangeably, but they're pretty different.  I would expect that people who consolidated may be able to benefit, but people who refinanced will not.

Speaking for my situation, if I go I to my private servicer website, it tells me I have 2 loans. One being unsubsidized consolidated and the other sub consolidated.

[atexan]

Oh god. This should be me. Holy shit. I still owe $60k. The press release says I should get money back if i made more than 120 payments. Which would be about $12k.

My husband might be eligible too.

This would literally change our lives.

[Doggy Mommy]

Lurker here, I’ve been stalking this post. My loans thankfully aren’t as big as a lot of them out there, but if this works, I could be forgiven $9300. And if they pay you back for payments over 120, that’s another 8 grand. While loan forgiveness needs to go much farther, this is a start and would really help my family and many others.

ETA: I was able to apply to convert the loans to Direct Loans. I hope that can get done fairly quickly so I can apply for the public service forgiveness.

[seeyalater52]

I haven’t processed exactly how this might impact my loans yet. I have around 50k in federal loans serviced by federal direct (for now; changing carriers at some point) and have made 7ish years of payments on them while in standard and extended repayment plans. I have never been able to afford the income based repayment amount so PSLF was never an option for me. I haven’t gotten into the details yet about what I would need to do in order to count the past 7 years of payments retroactively if they would indeed count now, or what Id need to do moving forward in order to qualify for forgiveness in about 3 years. Maybe I’d need to move to income based repayment closer to the Oct 2022 deadline for the remainder of the time? While the monthly payments would be insane, I think I’d probably still come out ahead if they counted my prior payments as qualifying. I’m not sure if I’m understanding the situation correctly though.

[curbsideprophet]

Oct 7, 2021 7:51:25 GMT -5 Doggy Mommy said:

Lurker here, I’ve been stalking this post. My loans thankfully aren’t as big as a lot of them out there, but if this works, I could be forgiven $9300. And if they pay you back for payments over 120, that’s another 8 grand. While loan forgiveness needs to go much farther, this is a start and would really help my family and many others.

ETA: I was able to apply to convert the loans to Direct Loans. I hope that can get done fairly quickly so I can apply for the public service forgiveness.

Did they tell you what your interest rate would be on the Direct Loans before you applied?

It sounds like I should qualify. I believe I would also need to covert it Direct Loans first though.

[Doggy Mommy]

Oct 7, 2021 12:15:08 GMT -5 curbsideprophet said:

Oct 7, 2021 7:51:25 GMT -5 Doggy Mommy said:

Lurker here, I’ve been stalking this post. My loans thankfully aren’t as big as a lot of them out there, but if this works, I could be forgiven $9300. And if they pay you back for payments over 120, that’s another 8 grand. While loan forgiveness needs to go much farther, this is a start and would really help my family and many others.

ETA: I was able to apply to convert the loans to Direct Loans. I hope that can get done fairly quickly so I can apply for the public service forgiveness.

Did they tell you what your interest rate would be on the Direct Loans before you applied?

It sounds like I should qualify. I believe I would also need to covert it Direct Loans first though.

No, so I'll be curious to see that. It did say my payment would go down and term would go up (but if the forgiveness doesn't go through I'll still pay the same monthly amount). I'm in a fortunate situation that if somehow this turns out to be a terrible situation, I could pay it off and be done with it, so I'm willing to jump on in and see what happens. 

[Jalapeñomel]

Oct 6, 2021 14:30:36 GMT -5 wanderingback said:

Oct 6, 2021 12:42:47 GMT -5 Jalapeñomel said:

This is us too. IBR plans would be asking for a monthly amount we could never afford because everything here is so damn expensive.

Ahh ok got it.
Income based was always the lowest payment option for me. So the standard payment plan is less than income based for you?
It's so frustrating. Also 7% + interest rate is highway robbery. I hate that I have that interest rate on $350,000!

We were on extended, then we deferred for a bit, and then COVID happened, so we will start paying again in January when the COVID deferment ends.

@@@@@@

But in January we will be looking at $1800 in daycare, so I have no idea how that will factor, because between that and mortgage, we will be counting every oenny.

[freshsqueezed]

Oct 7, 2021 13:01:03 GMT -5 Doggy Mommy said:

Oct 7, 2021 12:15:08 GMT -5 curbsideprophet said:

Did they tell you what your interest rate would be on the Direct Loans before you applied?

It sounds like I should qualify. I believe I would also need to covert it Direct Loans first though.

No, so I'll be curious to see that. It did say my payment would go down and term would go up (but if the forgiveness doesn't go through I'll still pay the same monthly amount). I'm in a fortunate situation that if somehow this turns out to be a terrible situation, I could pay it off and be done with it, so I'm willing to jump on in and see what happens. 

I just applied for the direct loan too and have the same situation.  I decided ok if this goes south I will just have to pay off and be done.  However, if this does work out I may be getting back thousands and be done with my loans too!  Fingers crossed for sure

[tiramisu]

I've done a little bit of reading and I'm starting to have hope that I might be able to qualify. Going to really look into it now. I haven't been paying for 10 years straight (forbearance, then a divorce and struggling to make payments), but if I could qualify and be on track for PSLF, that would be amazing. I've worked at nonprofits only since I got my Masters and I'm also kind of a public servant at this point. Trying to be no more than cautiously optimistic yet.