The Public Service Loan Forgiveness Program was created with the intention to help people who were stuck with debt after college. Unfortunately, the Department of Education recently made a statement saying that student loan borrowers could not rely on the approval letters they received. This means that a lot of people will have to start figuring out alternatives to pay off their student loans.
Anxiety is rising
You would only be eligible for the program after making at least 120 payments to your loan on time, as well as being employed by a federal, state, or local public-service job for 10 years. This persuaded a lot of people to apply for government jobs because that was what they needed to qualify. But now that the Department of Education doesn’t seem to be very sure about who is qualified, people are getting nervous.
One man was working as a lawyer at Vietnam Veterans of America and qualified for the forgiveness program in 2012. He was still with VVA in 2016, but when he submitted his information to be recertified that year, he was denied.
These situations are alarming for many people because it makes them question whether they will still be eligible in the coming years and whether they will have to figure out how to pay off their student loans on their own.
Suing the education department
Situations where people are having their approval reversed are becoming more common, and four people, along with the American Bar Association, are suing the Department of Education for it. The people are suing the Department of Education in the hopes that they will be reinstated into the program after finding out that their approval had been reversed.
The American Bar Association is suing the Department of Education for acting “arbitrarily and capriciously,” which is basically saying that the Department of Education didn’t have the right to randomly change people’s approval status.
The worst part is that people who have had their approval reversed don’t even know what changed. They want to try to fix it to possibly be approved again, but there is nothing that they did to reverse their approval.
Lack of transparency
There are a lot of rules to the program that most people probably aren’t aware of; for example, only certain types of federal loans qualify. This means that people may have to restructure their debt to try to make sure that they qualify — and even then, they might not.
The Department of Education has done a poor job at clarifying the rules of the program as well as who qualifies and who doesn’t, and has left it incredibly unclear for people who want to know what’s going to happen with their debt.
Concerning the lawsuit, a spokesman for the Department of Education declined to comment on the issue as well as any other issues raised by the suit.
Takeaway: Wait and see
While the program seemed like it would help a lot of people, it hasn’t had the chance to actually ‘forgive’ anyone’s loans yet because it hasn’t been 10 years since the program started. Hopefully, the Department of Education can clear the confusion about qualifications and make it so that the program itself is easier for people to understand.
Right now, everyone is anxiously awaiting to see if the first wave of loans is actually completely forgiven. If you’re depending on Public Service Loan Forgiveness, it’s advisable that you stay tuned for the latest developments in the coming months.
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