What You Don’t Know About Student Loan Forgiveness

Like most borrowers who attempt to enter into student loan forgiveness programs with servicers, Mary Carroll assumed that the government contracted collection agency in charge of her student loan repayment was ethical, honest and had her best interests in mind. Several years elapsed before she discovered that she was being misled and that all of the years she thought she was earning were actually being wasted due to technicalities embedded in the statutory law that governed the forgiveness program she was enrolled in.

Over the course of her college education, Mary Carroll borrowed over $160,000. She currently works in public service and has federal student loans. About 5 years ago Mary contacted her loan servicer and asked them what would be required in order to have her federal loans forgiven. They told her she would qualify for forgiveness as long as she made her loan payments on time every month and continued to work in public service for 10 years. Unfortunately federal loan forgiveness isn’t that simple.

The Truth About Loan Forgiveness

What Mary was not told when she called her servicers was that she needed to consolidate all of her federal loans into one loan. Otherwise her payments would not be counted toward her forgiveness program. She would also need to prove that she worked in public service every year during her program term. Borrowers in the 10-year public service program are required to submit documentation and have their HR department fill out a government form every year in order to prove that they’ve met all the requirements of their program.

What Ended Up Happening?

After about 5 years of being under the assumption that she was participating in a public service forgiveness program, Mary contacted her loan servicer and asked them how much time she had left until she qualified for loan forgiveness. That’s when she found out that none of the 60 payments she made over the last 5 years would be counted toward the public service forgiveness program she thought she was enrolled in. Her loan servicer told her that since she did not have direct loans with them they would not count any of her payments. Mary is now planning on consolidating her loans into a direct loan and starting out with a 10 year public service forgiveness program. Unfortunately none of the payments she made will be credited toward the program she’s now enrolled in. Sadly these types of stories are not uncommon.

What Is Required To Qualify For Public Service Student Loan Forgiveness?

As we’ve mentioned in previous blog posts, public service student loan forgiveness depends on 4 things existing each and every month:

1. The Type of Loan

Not all federal loans are the same.

2. The Specific Forgiveness Program

There are more than 5 different programs.

3. On Time Payment

Payments must be made within 15 days of the original due date each month.

4. Employment Certification

Borrowers in the 10-year public service program are required to prove that they’ve worked in public service each month of their 10-year program term and have their HR department sign off on a government form.

How To Avoid Potential Issues With Student Loan Forgiveness Programs

The best way to avoid any potential issues is to make sure you do your research. Solely relying on the information you receive from your loan servicer is not enough. Consistently reading loan forgiveness news articles is a great way to stay up to date with any possible changes in your program. At Hope Credit we’re experts at student loan forgiveness programs and we’ve helped thousand of clients successfully navigate through the forgiveness process. If you’re looking for help managing your student loan or have questions about loan forgiveness we would be happy to talk with you. Feel free to contact us today by clicking here.



Friedman, Zach (2018, August 13). This Woman ‘Enrolled’ In Student Loan Forgiveness – And Then Learned This [News]. Retrieved from https://www.forbes.com/sites/zackfriedman/2018/08/13/public-service-loan-forgiveness-student-loan-servicer/#3dceb1883bf7