In theory student loan forgiveness sounds fairly simple. However during the last 10 years since it was created things have not gone as smoothly as they could have. Many people who enroll in forgiveness programs end up not meeting all of their program requirements. This isn’t always their fault though. The problem usually begins with the loan servicer companies. These companies sometimes provide incorrect information to borrowers, which has resulted in many people not receiving loan forgiveness. Many people in public service forgiveness programs have seen this issue first hand. In fact almost 20,000 people have submitted completed loan forgiveness applications, but so far only 55 of them have actually received loan forgiveness (Conway, 2018).
Problems With The Public Service Loan Forgiveness System
1. Sometimes Incorrect Information Is Provided
Just listening to the information your loan servicer company provides doesn’t always cut it. Over the years many lawsuits have been brought against loan servicers. These lawsuits have accused them of providing borrowers with incorrect or misleading information. In previous articles we’ve talked about some of the things borrowers have experienced such as being told all they need to do to achieve public service loan forgiveness is to work in public service for 10 years and make all of their payments on time each month. Unfortunately there are more requirements to this program. This type of situation is not uncommon and sadly it’s caused a lot of people to not receive loan forgiveness.
2. Only Certain Types of Loans Qualify
Public service loan forgiveness requires borrowers to have income based repayment plans. These types of loans will essentially set up a payment plan based on how much money a borrower makes each month. There’s other income based payment loan types, but this is usually one of the most common types. The main problem with this requirement is that a lot of people start out with different types of loans and are unaware that they need to have an income-based loan in order to qualify. Recently many people have reported that their loan servicers never told them they needed a different type of loan. This has caused a lot of issues for borrowers and has resulted in people not receiving loan forgiveness.
3. Documentation Requirements
Many people think they can rely on the government to keep track of their loan documents – however this is not always the case. The government itself doesn’t keep track of documents, but rather hires third party companies to manage loan administrative duties. Sometimes these companies don’t keep track of everything properly. This can result in borrowers not receiving forgiveness. Every year borrowers in public service loan programs are also required to submit documents to the secretary of education proving they’ve worked in public service every year of their program term. Additionally they need to have their HR department sign off on a government form. A lot of borrowers don’t know about these requirements. This has caused some of borrowers to not receive loan forgiveness.
Learn More About How The Government Forgives Student Loan Debt
If you’re looking for help with your student loan or are interested in learning more about how the government forgives student loan debt, we would be happy to talk with you. The loan forgiveness process can sometimes be confusing if you’re just starting out. Having an expert like Hope Credit can help make things easier and clearer. Over the years we’ve helped thousands of people achieve partial and total student loan forgiveness. We’re always happy to answer any questions people have about their loans. If you’re interested in learning more feel free to contact us here.
Conway, Marian (2018, October 2). Audit on Student Loan Forgiveness Shows Barely Anyone Is Forgiven. Retrieved from https://nonprofitquarterly.org/2018/10/02/audit-on-student-loan-forgiveness-shows-barely-anyone-is-forgiven/
Nova, Annie (2018, October 10). Public service loan forgiveness is going wrong for most people – meet some of them. Retrieved from https://www.cnbc.com/2018/10/10/heres-what-can-go-wrong-on-your-way-to-student-loan-forgiveness.html