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In January, Anna Brecken finally made 120 student loan payments, the amount at which borrowers must receive the remainder of their debt, canceled by law. government loan forgiveness program.
When she petitioned for forgiveness, she looked forward to leaving her $ 100,000 balance sheet and no longer paying off the $ 580 a month loan. And for the first time in 12 years, she may have thought about leaving her government job at the US Citizenship and Immigration Services to do something else. Her dream is to teach English in South America.
But then her student loan officer FedLoan came back and said she hadn’t made 120 payments yet but was close to 80. That would mean Brecken would have to keep paying off her student loans for another three years.
“It’s terrible,” said 39-year-old Brecken. “It will be a lot more money. Why did they create this program if they were not going to allow anyone to be forgiven? It looks like a program in name only. “
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Most borrowers still cannot access debt forgiveness through the government service loan forgiveness program, which should allow nonprofit and government employees to cancel their federal student loans after 10 years.
According to the data, about 5% of student loan borrowers who applied for the exemption as of April 30, were qualified. data from the US Department of Education. This means that only about 3,700 borrowers out of 171,000 hoping for forgiveness received it. In 2013, the Consumer Financial Protection Bureau estimated that a quarter of American workers may be eligible…
However, there were problems in the program.
Many people in the civil service believe they are paying for forgiveness for loans only to find out at some point. that they don’t fit for one technical reason or another. And borrowers often complain that service companies are understating their payments by pushing the forgiveness period time and again.
President Joe Biden has pledged to improve the program, but it is unclear when these changes might occur.
The US Department of Education and FedLoan did not immediately respond to a request for comment.
Until then, there are steps borrowers can take to improve their chances of forgiveness.
Understand the four basic requirements of the program:
- Your loans must be federal direct loans.
- Your employer must be a government organization of any level, a 501 (c) (3) non-profit organization, or some other non-profit organization that provides public services.
- You must repay your student loans through one of four income-driven repayment plans.
- By the end, you must have made 120 timely payments.
First, check if your student loans, payment plan, and employer are appropriate.
Borrowers can get a list of their federal loans by logging into the system StudentAid.gov… You want to make sure that your loans Direct loans… Federal family and education loans and private loans are ineligible.
There are about 14 ways to repay your student loans, but in order to be eligible for government service loan forgiveness, you need to be enrolled in one of these four income-based repayment plans: income-based repayment, income-based repayment. pay-as-you-go, pay-as-you-go and revised pay-as-you-go.
Finally, to make sure that your employer meets the requirements at least once a year, you must complete and submit a so-called employer certification form… These forms will also allow you to keep a record of the confirmed matching payments.
“It is especially important to complete this form if you are changing employers,” said higher education expert Mark Kantrowitz.
Keeping a record of your payments can also protect you when it comes to proving that you’ve done all 120, he said.
“Borrowers are required to maintain a spreadsheet that lists the payment date, payment amount, repayment plan and related work for each payment,” Kantrowitz said. “If you have any problems, this table will help you solve them.”
Keep in mind that even if you did not pay off your student loans during the government billing suspension until September, those months still count towards your required 120 payments. (This is a minimum of 19.)
Kantrowitz said that if your loan agent insists that you did not make 120 payments and you believe you did, you should continue making payments.
“If they really made the required number of payments, then the surcharge will be returned to them,” he said.
Until then, you can appeal the account of your loan provider. Again, it is helpful if you can show records of your payments as well as your employers over the past decade.
Brecken is currently in charge of this process, and luckily she kept the records.
“I presented my payment history in black and white,” she said. “And I’ll have to keep bothering them.”