Written By Travis Hornsby, CFA®, CFP®
A lot of Student Loan Planner® clients depend on the Public Service Loan Forgiveness program (PSLF). They're making life and career decisions based on it. After all, receiving tax-free loan forgiveness after 10 years of income-driven payments is pretty awesome. So when a Fedloan lawsuit was filed alleging several borrowers were incorrectly told they were eligible for PSLF, there was a veritable panic online.
Following a court ruling in February 2019 that was in favor of the borrowers, the Department of Education finally settled the PSLF lawsuit a year later.
The settlement is great news for anyone depending on the future of PSLF because this lawsuit and its results show that the federal government can’t just up and change the eligibility rules on a whim.
For most clients and readers who are pursuing PSLF, I don't think you need to worry about the future of the program, especially because the vast majority of PSLF student loan borrowers clearly qualify based on their employment with a government or 501(c)(3) entity.
I'm a student loan consultant, not an attorney. But I've advised people on more student debt than anyone in the country. Here's what the PSLF Fedloan lawsuit actually means.
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Why did borrowers sue the Department of Education over PSLF?
The lawsuit centered on a big group of lawyers being wrongly told that they were on track for loan forgiveness. And this mistake was caused by FedLoan Servicing, which is known for being a sub-par loan servicer. FedLoan Servicing is the loan servicer for federal loans under the Pennsylvania Higher Education Assistance Agency (PHEAA).
The government tasks private companies with handling the servicing and payment processing for federal student loans. And the Department of Education chose to name FedLoan servicing as the sole PSLF loan servicer. So, whenever someone tries to track their PSLF progress, their loans automatically get transferred to FedLoan.
And it turns out that FedLoan sent out information for at least a couple years that some borrowers were eligible even though they actually weren't.
We can't know for sure, but here's how I think this situation happened:
- FedLoan issued approval letters to several borrowers from the American Bar Association (ABA), Vietnam Veterans of America, and other organizations in 2014 saying that they qualified for the PSLF program.
- In the twilight of the Obama administration, the Department of Education reviewed several PSLF cases more carefully as politicians realized the program would be far more expensive than they thought. Emails between FedLoan and the Department of Education show rules made up on the fly. A February 2019 court ruling found that the Department of Education made rules about PSLF in an “arbitrary and capricious” manner in violation of the Administrative Procedure Act (APA), which basically means they didn't give proper notice and follow standard rule-making guidelines.
- FedLoan then issued rejection letters in 2016 even though the borrowers had been approved previously. U.S. District Judge Timothy J. Kelly found that the original determination letters had language in them that seemed final, in contrast to the Department of Education’s claim that it was provisional.
- Four borrowers affected by these years of lost PSLF credit decided to go further with their complaints and sue.
On top of all of this, the Consumer Financial Protection Bureau (CFPB) was sued due to the abuses of loan servicers and lack of oversight. The lawsuit also cited more issues with the way PSLF is being handled.
Who was included in the PSLF Fedloan lawsuit?
Obviously, the folks who spent years working toward the goals of the loan forgiveness program were rightfully upset. The affected group was mostly lawyers working at the ABA.
But there were others in the lawsuit who worked for public interest organizations with not-for-profit type names like the Vietnam Veterans of America (VVA). These borrowers argued that the Department of Education committed to these individuals that they were eligible for PSLF and should restore the few years of eligibility they lost as a result of FedLoan’s mistake.
They also wanted their organizations listed as qualifying employers so that they don't lose lawyers to other organizations.
Judge Kelly prioritized the claims of the individuals over the organizations. In other words, he told FedLoan to reconsider its rejection for three of the four borrowers because of the APA violation. The fourth borrower he found ineligible because the VVA didn't provide direct services.
And in February 2020, the Department of Education did just that.
After three years of litigation, the federal government agreed to fulfill its end of the bargain for the ABA lawyers who sued. The government recognized ABA employees as dedicated public servants who are eligible for PSLF going forward.
The reason this PSLF Fedloan lawsuit is a big deal
The PSLF application has not been used by a massive number of people so far. The Employment Certification Form (ECF) is the primary way to track progress toward the 10 years needed for PSLF. If a group of borrowers were incorrectly told they had eligibility, borrowers are rightfully worried whether they can trust FedLoan to provide accurate information.
Because plenty of borrowers are working in jobs solely to get the PSLF benefit, a change in eligibility requirements would alter people's lives and only add to the student debt crisis. So there is legitimate angst emanating from a lawsuit like this.
What the ruling of Judge Kelly and the ultimate outcome of this lawsuit says, in my view, is that borrowers will be protected aggressively.
I think you could make a convincing case that their service did not originally qualify under the rules of PSLF.
However, given the Department of Education made rules willy-nilly and the initial finding was that the borrowers qualified for PSLF, it appears they were given the benefit of the doubt. And because of this, now ABA employees have full clarity that they work for a qualifying employer when it comes to PSLF.
What is a PSLF qualifying employer?
The first caveat to the PSLF program is that you must be employed by a “qualifying employer.” The program defines a qualifying employer in the following way:
Qualifying employment includes employment by the government, employment by a not-for-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, AmeriCorps position, a Peace Corps position, or employment at a public service organization. Nurses, social workers, and other public service professions typically qualify.
You must also make qualifying loan payments based on your income on Direct loans for 10 years while employed by this qualifying employer.
Here's where the first problem with the borrowers' eligibility in the lawsuit presented itself.
The American Bar Association is an industry-specific membership organization that's governed by Section 501(c)(6) of the IRS Code. That status means the ABA is a “business league” that's allowed to engage in “unlimited lobbying” for the economic benefit of its members.
So, the only way the ABA would be considered a qualifying employer is if it were considered a public service organization. It now is thanks to this lawsuit.
What about the borrower who worked for Vietnam Veterans of America? Surely that's an eligible not-for-profit employer? Actually, that organization is a 501(c)(19) under the IRS Code. The only way its workers would qualify for PSLF is if the VVA is considered a public service organization.
So, the first rule you can take away from this PSLF lawsuit is to check to see if your employer is a government or 501(c)(3) organization. If it’s not, you could have trouble qualifying for student loan forgiveness programs like PSLF.
What is a public service organization?
We’ve established the only way these specific borrowers could have eligibility for PSLF is if they work for a public service organization. Here's how public service organization is defined within the ECF public service workers need to submit to track PSLF progress:
A public service organization is a private not-for-profit organization that is not a labor union or a partisan political organization and that provides at least one of the following public services: (1) emergency management, (2) military service, (3) public safety, (4) law enforcement, (5) public interest legal services, (6) early childhood education, (7) public service for individuals with disabilities and the elderly, (8) public health, (9) public education, (10) public library services, (11) school library services, or (12) other school-based services.
So, the only way the ABA and VVA lawyers could qualify is if their employers are not labor unions or partisan political organizations and if the work they do qualifies according to the PSLF definition of public interest legal services. Given that the ABA and VVA don't seem to be labor unions or partisan organizations, let's see if they fit the definition of public interest legal services.
Public interest legal services refers to legal services that are funded in whole or in part by a local, state, federal, or tribal government. Clearly, the VVA is not funded in whole or in part by a local, state, federal or tribal government. The ABA is also not funded by a government.
Additionally, you could argue that the VVA is a lobbying organization for Vietnam veterans. While that’s a worthy cause with a well-deserving group of Americans, it's not technically public interest law.
Under PSLF rules, working at the VVA is more like lobbying for a worthy cause. The judge seems to have ruled that way as the VVA doesn't provide direct service but rather primarily advocacy.
The ABA is not technically a labor union, but it is a professional or trade organization that seeks to maximize the economic well-being of lawyers. It does a lot of other good things, too, but the government argued that it didn’t matter in this case. But the government ultimately settled and agreed that the ABA would be a public service organization for purposes of the PSLF program.
Even though the VVA lawyers don’t qualify under the PSLF program, they may have other options for their student loan debt.
If they owe less than 1.5 times their income and do not plan to utilize PSLF through a different qualifying organization, these borrowers would be better off refinancing their student loans and paying them back.
Many have taken new jobs at clearly qualifying organizations because of the importance of this program for their finances.
FedLoan messed up by telling them the wrong thing
I think it's clear from the spirit of the PSLF certification form that the individuals in the lawsuit did not originally qualify. The analogy I'd make is if someone at the IRS incorrectly processed my taxes.
It doesn't mean the IRS can't send me a correction and ask for more money. If a judge incorrectly says “not guilty” when the jury verdict reads “guilty,” it doesn't mean I can't get sentenced.
I understand that to receive this notification years after you were wrongly notified you were eligible for PSLF is terrible. It's why basically all of the loan servicers, not just Navient, are some of the worst organizations for customer service anywhere. FedLoan really messed up badly.
However, the court ruling prioritized borrowers and said that a violation of laws and normal rulemaking procedures shouldn't ruin somebody's finances. That's great news for everyone pursuing PSLF.
Anyone who had their PSLF service disqualified who worked at a non-501(c)(3) nonprofit organization should appeal the finding. This lawsuit allows others in similar situations to appeal their lack of qualifying PSLF credit because of the APA violation by the Department of Education.
How I think this PSLF error happened
People are only human. No matter how detailed a procedure manual is. My bet is that some representative charged with making PSLF determinations at FedLoan looked through these certification forms and saw a not-for-profit that didn't have a clearly partisan or labor union name.
FedLoan likely also didn't check to see how the organizations receive funds and how they aren't government-funded. So, they just checked the box that the borrowers, later sued, were eligible. It's no surprise to me, as FedLoan cost my wife thousands of dollars with its poor service.
The PSLF FedLoan disaster as a domino effect
When the borrowers called in with complaints, the representatives on the phone looked at the note on the profile that said “eligible” and then merely repeated the mistake its processing folks made.
Once that initial mistake happened, it snowballed as nobody at FedLoan would overturn the previous ruling. Then outgoing officials at the Department of Education wanted to do one final review of PSLF determinations made by FedLoan before the Trump administration took over.
Why this PSLF lawsuit probably doesn't affect you
Here's the reason why you probably shouldn't worry. If you're going for PSLF, you're almost certainly at a 501(c)(3) or a government employer. If you're not at one of those kinds of employers, and aren't at AmeriCorps or the PeaceCorps, you probably don't qualify for PSLF.
Most people going for PSLF are at qualifying organizations and are thus unaffected by this PSLF Fedloan lawsuit. Yes, you probably can't trust FedLoan servicing. But If you've interacted with student loan servicers much, you probably already knew that.
How to know you’re on the right track with PSLF
If you are depending on PSLF, check your employer's tax status right now. Ask the human resources department for financial documents, and look and see if your employer is a 501(c)(3). You may be able to google the tax status, too. That’s what I did to find out the ABA was a 501(c)(6) and the VVA was a 501(c)(19).
Another clue is your retirement account. If you have a 403(b) or a 457, you're probably eligible for PSLF. The American Bar Association has a 401(k), which is for corporate employers. That should have been a clue that its employees weren’t originally eligible for PSLF. But things fortunately worked out in their favor.
How to protect yourself against something bad happening to PSLF
Because things can change with programs like PSLF, it’s a good idea to take measures that protect your finances. The first step is to independently check if your employer is actually eligible. If you're curious, ask in the comments below. Maybe we can crowdsource it.
Next, make sure you're on the right repayment plan — an IDR plan — and don't make extra student loan payments if they might be forgiven. Instead, open an account with Vanguard if you don't need advice or Betterment if you do.
Then, invest what you would've used to pay extra on your student debt. Finally, save as much as you can in your retirement plans (currently $19,500 maximum in 2020 for employer plans or $6,000 for Traditional IRAs).
Make sure your finances can withstand PSLF going away just in case
Plan on PSLF, but prepare for its repeal just in case. Anybody with PSLF in the promissory note will probably qualify. The chief threat to PSLF could actually be a means test imposed by the president or Congress. That's already been proposed by President Obama, although it got shot down by members of his own party.
The Republican Congress tried to repeal PSLF entirely, but only for new borrowers. That means grandfathering for PSLF borrowers is very likely going to occur long-term.
I think there's over a 90% chance current borrowers will get to take advantage of forgiveness and grant programs like PSLF in its current form, so you shouldn't be super worried about this.
Want help? Let's craft a personalized student loan strategy for you
Here’s the bottom line for PSLF borrowers working in public services: Save a lot. And make a plan.
Independently verify your eligibility for PSLF and get a detailed account review from your loan servicer. And appeal the denial decision if you work for a nonprofit organization that doesn’t have a 501(c)(3) tax status.
If you have six figures of student loans, don't put all your trust in your financial future to a student loan servicer. That's the biggest takeaway from the PSLF Fedloan lawsuit for me.
Perhaps you've read all this and wonder how you might get competent help with your student loans. We provide student loan help for a flat fee and have consulted on hundreds of millions in student debt for clients. Just click the button below to book a consultation.
Caitlin See contributed to the reporting for this article.
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I am a Registered Nurse working full time as a staff RN for a non-profit hospital (but it is not a 501(c)(3)). I feel like a non 501(c)(3) public health employer is not well defined. I cannot find a good definition for “public health.” MyFedLoan approved the ECF for my employer, but I don’t trust them. That said, I thought ambiguity in contracts should be construed against the drafter. Thoughts?
Hey Jenny, can you detail that more for me? I’m very curious as to the specific tax status of the hospital. If you wouldn’t mind posting the name of the hospital, otherwise email it to me at travis@studentloanplanner.com. I would definitely be concerned if I was working for a non-501c3 hospital. In theory it’s public health, but the way they narrowly interpreted “public interest law” with the ABA lawyers could certainly be applied to public health. I’d need to know more about your situation to have a strong opinion. It’s great that you’re at least tracking for the ECF form
These people are totally inept. I am a teacher and qualify. I signed up the first year they had it. I have been asking for at least three years for them to tell me how many more payments I have left so I can plan my retirement.
Got a letter today saying I have only made five payments total even though I have been paying for years. I have no idea how they can be so bad. It is malpractice. I am searching for a lawyer to sue them as well.
Hope you’re on the PSLF plan and not Teacher Loan Forgiveness Mary
Hello! I have made 72 payments thus far that qualify for PSLF and am nervous. I’m a physician and still owe more than I borrowed thanks to high interest rates, despite 6 YEARS of payments. I started IBR in residency, then worked for a community hospital (owned by the county, listed as 501c and signed off by Fedloans) for 3 years, and now work for a large university. My retirement is a 403b for both after residency jobs. Thoughts on ‘safe’? I’m still over $200,000 in debt and am worried.
So four more years to go. Luckily you’ll be getting forgiveness in the first major cohort to get it in 2020-2021, so I think you’re 80% to 90% ‘safe.’ Let’s talk about the risks that are present here. In theory, borrowers will start getting it in 2017, but if you look at the certifications for PSLF in those years it’s almost nobody. The reason is we had FFEL loans issued through 2010, so 2020 is the first big year for PSLF. That’s when I expect major attention will be drawn to the program and private sector employers will push for its repeal. I think the main risk to you is them capping the benefit because I don’t think they’ll be able to remove it by the time you’ll be eligible.
The way the math will work is if they do cap it, you’ll still be best off going for PSLF and then dealing with the remainder of the debt. I’d suggest maxing your 403b, HSA, and putting aside money in taxable investment account that can be your hedge against PSLF repeal. If it gets abolished, then you have a big sum of money ready to plow into principal. That would also allow you to refinance to a lower interest rate with a manageable payment. Feel free to hit me up at travis@studentloanplanner.com or check out the ultimate PSLF guide I created at: https://www.studentloanplanner.com/public-service-loan-forgiveness/
I would think that if a cap is put on PSLF that would generate a mass lawsuit if it affected existing loans. Most likely they would cap new loans as of the date of the law.
I understand your thinking. However, the Obama administration already proposed a $57,500 cap on PSLF back in 2015 and it got defeated, but clearly they didn’t think they couldn’t change the terms of the program. I agree it would be a huge lawsuit but it’s one I think the government would win as they’re offering a loan forgiveness program subject to its availability. The promissory note is pretty short in its PSLF description.
Travis, you should clarify that you aren’t an attorney. This article starts off with “my clients” and talks about fairly complex legal issues. Most people would assume you are a trained attorney. Your “I think the government would win” is really not based upon any legal analysis. Such statements can cause unnecessary anxiety when people think you are a trained attorney.
Sure I’ve made an update on there. That said, I don’t think attorneys really know the answer to this one any more than I do on how they’ll interpret this. When someone has a link to the lawsuit result please feel free to post it.
The idea that current borrowers would be subject to a cap is absolutely not the majority view.
The claim that “the government would win” in litigation on this issue is absurd.
In fact, in the most recent congressional proposal for repeal of PSLF, my understanding is that there was explicit language about grandfathering in already existing borrowers.
You are doling out some questionable advice and responses here.
I didn’t say would I said that I thought they could be subject to a cap if the government wanted to institute one, which they won’t. Ppl ask me a lot if PSLF could go away and I say sure bc the government could change a lot of things with legislation or executive orders. That said, politically at this point it’s almost impossible. I talk a lot about grandfathering in other articles: https://www.studentloanplanner.com/pslf-gamble
Great article.
I currently work for a 115(c) quasi governmental entity. Our Association assists county commissioners, county administrators, emergency management directors, county engineers, county revenue officers, and county 911 directors. The Association is funded by local governments (all counties in the state) out of the county general fund monies.
According to the code, I do not believe I technically qualify as a government employee, regardless of the fact I am on the State Pension Plan and have a 403(b). I am not employed directly by a county, but work for all 67 counties through a board of county commissioners. I could potentially see being qualified as a public service organization under the definition of “local government entity.”
However, when I was approved for PSLF in 2016, I was accepted under not- for-profit organization providing a qualifying public service (public interest law services). Our Association is neither a labor union or partisan political organization. We provide legal guidance to county commissions, provide continuing education, draft legislation, administer emergency management pre-disaster event contracts for every county in the state.
Last month, I received an email denying my qualifying payments due to not being eligible. This is after two separate approvals into the program last year. The application is identical from the previous year. Any thoughts on my organization qualifying? Of course, I realize this is not a usual case. However after reading your article, it seems I would certainly have a strong argument for qualification.
I would think so, but basically the Trump administration has used the vagueness of the rules to choke everyone not at a 501c3 or government employer out of the benefit. At least that’s how I’m interpreting things.
So by working at something that is a “maybe” for if it qualifies, that allows them to keep you from being grandfathered in or being eligible if they change their minds. If you’re at a 501c3 or directly at a county commission somewhere, then you’re good. Basically their view is the employer’s tax status is what determines if you get it not the work you do. Kinda crazy but that’s how I understand it right now
Thanks for the comment. I’m actually a 115(c) organization funded by local government. Could you share where in the U.S. Code “Public interest legal services” is defined as legal services that are funded in whole or in part by a local, State, Federal, or Tribal government. I’d greatly appreciate it.
This form page 3 section 6 has the definition of public interest legal services https://studentaid.ed.gov/sa/sites/default/files/public-service-employment-certification-form.pdf
I have a question. What if the ABA had a 501(c)(3) foundation that had its own EIN, board, staff members (who had the autonomy to hire/fire/etc), budget, etc. But for W2 purposes the 501(c)(3) foundation staff members had the ABA listed at the “employer.” Do you think those 501(c)(3) foundation staff members qualify for PSLF?
It’s totally dependent on whos on the W2. So if the ABA Foundation was their employer they’re golden. If it’s the ABA, no forgiveness at all. Shows one of the fatal flaws in the PSLF design in my view. Very arbitrary.
If it’s all about the W2, do you have thoughts or information about how PSLF might be treated if a 501(c)(3), or several, contracted with a Professional Employer Organization and that company appeared as the employer of record for tax purposes? What might be the options there?
If you were an employee of a 501c3 and got your W2 from them, and you were basically being “loaned out” to a professional organization but were technically employed by the 501c3, you would be set. I think rather than sue the ABA should set up a massive 501c3 arm that only does public law and isn’t involved in advocacy or lobbying efforts for the legal profession and those lawyers would be fine
The ABA actually does have this: https://www.americanbar.org/groups/departments_offices/fund_justice_education.html
This arm of the ABA has hundreds of employees and is almost entirely funded by government grants. It seems that the ABA does not want to separate it’s non-501(c)(3) employees from it’s 501(c)(3) employees–however, if the ABA finds that it really has no recourse under the current policies, do you think the ABA could argue that at least those employees should be eligible?
They totally would be if the ABA would be willing to spin off that group as a separate 501c3 with a separate board of directors and make it a loose affiliation. Certain military divisions of Boeing and Lockheed I’m sure are funded mostly if not entirely by governmental grants but it’s a clearer case that they’re not eligible because they work for a company. The argument is that the ABA is a white collar labor union, and even though it does a lot of really noble things that classification makes it ineligible no matter what task the employees are doing
I am glad to of found this article. I work in Law Enforcement which is covered under the PSLF. The problem is I finished my Master sin 2005, in 2007 the program took effect Ten years later 2017 comes and I apply. I remind you, they told me all along I was elgible for PSLF in ten years. Thus I apply and was told my payment thought direct were a set amount, bot based on income. I saw well they never told me I needed to that. They said make 120 payments and your free sorta speak. I would of changed my payment had I known. My loan was transferred to Fed loans and they will not answer me at all. Now I owe less then those attorney, but its principle now. Is there a way to join the lawsuit? Honeslty, I think FED loan doesn’t even subtract my ccount right. Seems like i’ve owed this same money for the past year.
Thanks
Nick
Yeah they have to be Direct loans. They’re most likely on the FFEL loan program. Happy to answer any questions if you want to just post em on the site here. My suggestion is figure out if you have several years worth of credit towards PSLF with the certification form. If you don’t then you probably want to just pay them off unfortunately.
Hi Travis, thanks for this article, it perfectly puts in words all the concerns I have about Fedloan and their errors in communicating pertinent information. I currently work for a Government agency, where I have been for the last 5 years. I have been on the PSLF program for the last 4 years. I missed out on that first year because I experienced a sudden change in my finances when I started work following my father suffering a massive stroke. His documents weren’t in order, so all his assets were out of reach. I had to use my finances to support my parents until it was all straightened out. During that same month, I was ending my grace period, and called Fedloan, informing them of my financial hardship. Without telling me that I qualified for PFLF, and for lowered monthly payments through an income based plan, they told me about taking a forbearance. I did, and one year later, I missed out on a year of PSLF and my loans were amortized, adding an extra $25,000 into my principal. When I finally learned about PSLF through my university’s alumni association, I contacted Fedloan and they did not acknowledge their mistake. So far into PSLF, my principle and interest combined have doubled my original principal. I was also advised through Fedloan that the time spent on Maternity Leave qualified which is essentially $0 monthly payments through income based repayment qualifies for PSLF, without them telling me if I needed additional documention, or if it is an automatic qualification. I recently updated my up to date employee verification and will soon follow up to ask for a written letter of qualified payments. Can I sue Fedloan for that first year missed and the amortized loan?
Probably not Christy. That’s the honest answer. I would just try to make sure everything is set up correctly moving forward. You can contact your Congressperson’s office though and express your frustration to their constituent services group. That helps sometimes
I have been with Fedloan for since 2007,I asked them about how many payment ,do I have left! They told me the information that I sent them about the hospital that I use to work for SSM don’t qualify! I’m so frustration with this company! I call them every week,and I get a different answer!
You probably have FFEL loans from before 2010 and you need to see if they are Direct loans or FFEL. If they’re FFEL you have to start over from year 0 for the 10 years of credit. Our company helps folks navigate that https://www.studentloanplanner.com/hire-student-loan-help/
Hi all, my case falls somewhat out of the purview of this discussion, but I’d love to know if anyone can relate or offer advice. I began PSLF as a Peace Corps Volunteer and then entered graduate school. With Direct Loans I maintained PSLF status and student deferment simultaneously. Though grad school did not count as Public Service, I arranged with Direct Loans to keep hold of my two years of Peace Corps service and to begin the tallying again after finding employment after grad school. We’ll Fedloan servicing took over and unbeknownst to me cancelled my PSLF standing. What can I do? I assume nothing, but this feels wrong. Thanks.
Hey Jeff were you making payments during the Peace Corps time? They would’ve probably been $0 a month, but if they were in deferment then I don’t believe they’ll give you credit for those 2 years. Sorry to be bringing bad news. If you’re planning on doing 10 years at a not for profit now though it still probably makes sense. Feel free to post more details.
This story appears to be correct that they wouldn’t qualify. However, that is not the borrowers problem. Fedloan is being paid a lot of money to manage the loans. Once they make a decision there should be no claw back. People get their hopes built up on loan forgiveness and then to take it away a couple of years later is irresponsible. Perhaps there should be a 60 statute that once Fedloan approves of your work certification. They only have sixty days from the time of your notification to backtrack on their decision. Fair is Fair!
I hear you, but at least they’re making an attempt to settle this now instead of 10 years from now. That would stink even worse than it already does
My problem is that while I worked for a qualifying 501c-3 all this time, I was making payments under the FFEL loan program, not the direct loan program. Of course, now they tell me I can consolidate, but I have to make the 120 payments under the new regimen. This wasn’t spelled out very well and I was simply told I was working for a non-profit and could get my federal loans forgiven.
Peter I couldn’t agree more. The same thing happened to us and we were staring down the barrel at 120 months and just decided to refi it. I would only make that decision if you were really sure that PSLF wasn’t for you though. It’s still hard to beat if you owe more than your income even at 10 years to go.
Same issue with us Peter. It isn’t the employer, it is who we have made over 7 years of payments to. I just sent you an email regarding this Travis. Thanks.
You are entirely wrong about this, and a two-minute search for financial disclosures on the ABA website could have set you straight if you had bothered to take a moment to do minimal research before writing this article. The ABA operates both a 501(c)(6) and 501(c)(3). The ABA is substantially funded by federal government grants, spending well over $50 million a year to provide public interest legal services in the US and worldwide. The employees whose eligibility for loan forgiveness was retroactively revoked are dedicated public servants who have suffered significant economic losses to pursue a career in public interest law. Feel free to peruse the ABA’s financials here https://www.americanbar.org/about_the_aba/financial_reports.html, and I encourage you to correct the misinformation in your article.
Erin I don’t write this article gleefully. Boeing is also substantially funded by government grants, so that part of the argument doesn’t hold water. In terms of the ABA having a 501c3, that’s correct it does, the foundation. However, none of the named employees in the suit were working for it directly. They were working for the 501c6.
Qualifying for PSLF depends on what organization you work for, not what work you perform. I’d wholeheartedly agree that they are public servants providing valuable assistance at significant financial sacrifice. The fact that they lost 2 years towards PSLF stinks. I’ve also had a lot of people lose 5-7 years of credit because they had FFEL loans from before 2010 and no one told them they needed to consolidate. The PSLF program is a mess in general, but unless these folks win on a technicality like Fedloan being an agent of the US government or something like that, I expect them to lose.
I am a Social Worker, who works for the state for 2 years and then I worked for a non-profit that is a 501 c3 just 1 month short of 2 years. Annually I send in my EFC for PSLF, and every year, I’m “short-changed”, so for 12 months of work, I may get credit for 8 or 9 months. I call, email, and never seem to get any where, I’m told a formal review will be done, and then on the next bill that comes it shows even lower amount of months. So for almost 4 years (47 months), I’ve only been given 30 months of credit? It seems that when I come forward and ask, I’m penalized and never get any explanation, when all the criteria is met. Any suggestions, besides continuing to send emails, letters, and make phone calls? I find dealing with FedLoan is an extremely frustrating process.
Sorry to hear Sandra. Check out this quote from the studentaid.gov website: “Payments you make during the summer will count if you have a contract for an employment period of at least eight months and you work an average of 30 hours per week during that period, and if your employer still considers you to be employed full-time during the summer break.”
The only thing that could make any sense to me is maybe they aren’t giving you credit during the summer? Total guess. Perhaps your employer isn’t putting the dates on the ECF correctly.
The only way to deal with FedLoan when you’re having major problems with them is escalating to a manager and refusing to speak to anyone else. It stinks and it’s awkward, but it’s their own fault and you deserve accurate accounting for what time you’ve served.
It seems there is much confusion surrounding the PSLF program. My situation is a bit different than the situation covered in this article, though very informative just the same. Here’s an article that sums up my PSLF problem: https://www.tampabankruptcylawyerblog.com/2017/07/arbitrarily-denied-public-service-loan-forgiveness.html
I finished my bachelors in education in 2005 and masters in special ed in 2008. Have been working in 501(c)3 non profits since 2005. I thought I was on the right track to have my federal loans forgiven this year. To my great dismay, I called my loan servicer last year to check on the process and was informed I didn’t have the right loan and would need to start the 10 year clock over again. This was incredibly disheartening. It makes little sense to me. I remember telling my loan company back around 2008-2009 that I was working in a non-profit and was exited about the new PSLF program. I also inquired to be sure getting on the IBR plan would be a qualifying plan and was told it would be. Now about ten years later I’m told too bad so sad. I have made employment and life decisions based on a belief I would have my loans forgiven (that’s not to say I haven’t paid a hefty amount in loans already because I have). But I do not believe I received appropriate exit counseling from any loan officers at the time and feel misled by the loan companies themselves not wanting to provide the correct instructions to ensure I would be eligible for PSLF. Obviously if I had received the information and instructions to consolidate into a Direct loan I would have but alas here were are.
Have presented my case to the Dept of Ed ombudsman and state Senator though to no avail. Am hoping others in the same boat may have additional suggestions though and if a class action could lead to changes at the federal level to ensure those of us with FFEL loans can be counted in would be great, though not holding my breath.
Thanks for the opportunity to comment
Jeremiah
Hey Jeremiah so sorry to hear. Actually we were in the same boat when I found out that my fiancee’s med school loans were FFEL in 2015, and we were totally screwed: https://www.studentloanplanner.com/fedloan-servicing-cost-us/
We just decided to bite the bullet and pay them back, and hopefully we’ll be debt free in a year. I feel your pain man. No class action possible unfortunately because the offender is the federal govt. You can only look forward and ask what the best strategy is.
Thank you for this. I have been working at a qualified nonprofit organization since 2005, and I believe this went into effect in 2008. I have been making payments on my student loans since then, but found out in 2013 that because they weren’t served by FedLoanServicing, those five years don’t count at all. . . . Then literally even time I call to confirm something with them, something else is wrong with the accounts, and they mess up the qualifying payments, and some have taken a year to resolve. Now I’m looking at being eligibility in 2023 (rather than 2018) and have no confidence that is the case. Wondering if I should just accelerate my payments and forget this ridiculously complicated program that doesn’t seem to be offering any benefit at all. . .
Jen almost always the answer is no you shouldn’t. If you have FFEL loans that’s why the credit doesn’t count. They’d need to be consolidated if that’s the case. If they’re direct loans, then FedLoan should count the credit even when the loans were not with them. You would just need to appeal their initial decision.
When in doubt, refuse to speak to anyone but a manager at FedLoan servicing.
I’ve been a police officer since September 2007. In October 2007 I consolidated my federal loans and was told that was all I needed to do to be eligible for PSLF. I filed the paperwork to get my loans transferred to FedLoan and finalize in September 2016. In February 2017 I received an email that said I was on an ineligible repayment plan and that none of my 9+ years of payments count towards PSLF. I went through the appeal process and was told that Congress makes the laws so I’m screwed. So now I’ve paid down $2000 on the principal in over ten years of payments. I never would have agreed to pay that much interest. Any advice would be great.
Hey Jeff I’m sorry to tell you this but you’ve probably got an FFEL Consolidation loan. Those do not have PSLF in the promissory note, so it sounds like they gave you bad advice. I think at this point you’d run the numbers and see if forgiveness looks like the right path.
Hi All, I am a health psychologist working at a private, for profit hospital. However, I am employed by the physicians group, which is a private not-for-profit. This seemed like a grey are so I submitted an employment certification form to Fedloan for review. The initially denied, but then I appealed and provided information regarding the non-for-profit status. The overturned their denial and certified my employment. Does this certification put me in the clear, or should I be worried?
I would do some more digging personally. It sounds like an odd employment arrangement. As long as it’s a 501c3 that someone could write a check to and deduct it as a charitable contribution, you should be in the clear.
I was told by fed loan servicing that I had 103 qualifying payments in 2017 then in October of 2017 they sent another letter saying I had 52 qualifying payments then they went up to 73 and are now reviewing the issue saying that the dept of Ed new computer system had caused some payments to be not put inand we’re working on a fix. Do you have a clue what they are up too? They said they are reviewing the situation but so far nothing. Called today the lady pulled up the letter and said she’d show it to her supervisor and call back in about ten bussiness days. according to the original sent letter I am eligible in May 2018. WTF should I get a lawyer?
A lawyer probably won’t help in this case unfortunately, but you could try connecting with Adam Minsky at Boston Student Loan Lawyer and see what he has to say. I think your best best is to wait for the formal review. That usually takes 6 months from when they started it. They should put you into forbearance if you’re actually eligible in May 2018 while they review it.
If you are speaking to any company other than Fedloan Servucing then you will get wrong information. The article above is referring to “Fed Loans Servicing” that isn’t a legit company. It’s the name of a faux company that is scamming thousands to loan borrowers. If to speak to a “loan forgiveness company” again it’s a scam. Western Benefits group, Student Loan Help center, 77Elite, Performant Recovery, Loan Debt Angel’s ect…all examples of fraudulent companies. To know of you qualify know your true organization details. Just because you’re a nurse doesn’t guarantee you qualify. Call the PSLF department at FLS with all your details. Know your true AGI, don’t estimate, and know what your current contract offers you such as guaranteed income increases. And be logical if you make 70k agi and you owe 15-20k.. pay your debt you won’t qualify because you’ll pay that off.. if you file joint taxes with your spouse that impacts eligibility and if you file separate don’t apply for REPAYE bc the dept of ed has that set to base the payments off joint agi regardless of filing status. Be smart about your debt and you’ll be fine.
I am qualified to receive PSLF, but Fedloan servicing has purposely “lost” about 4 years of qualifying payments. No amount of emails, phone calls, documentation, letters, or begging can get them to fix it.
Ask for a manual review. It can take up to 6 months is the only thing, but it’s the only option if you think you’ve been wronged.
For what it’s worth, I was in a similar situation as Rachel. FedLoan servicing was consistently reporting that I made fewer qualifying payments than I actually had. I requested a manual review as Travis suggests above, but the 6 month window came and went with no changes. Ultimately, I opened a file with the consumer financial protection bureau and had everything sorted out within a month! Consider doing the same if you are getting the run around even after doing your due diligence.
Actually best practice now is to contact the FedLoan Ombudsman at (717) 720-7605. I’ve had readers tell me it only took them 3 days to get something fixed that had been hanging around for months.
Thank you so much for the great service that you provide! It has been extremely helpful with my work towards PSLF.
I previously worked with the International Committee of the Red Cross for about a year and a half as a legal fellow. I submitted the employment certification forms, and was told that the ICRC qualified as a non-profit.
However, I recently received a letter from FedLoanServicing stating that “this approval was issued in error because we determined that the ICRC is a foreign organization. For PSLF purposes, only US Federal, State, Local and Tribal government organizations qualify.” They stated that they are reversing their approval of qualifying employment and revoking credit for my payments.
The ICRC is headquartered in Switzerland, but in the US is a 501(c)(3) organization according to their tax return, which I accessed through the IRS website. Shouldn’t that be sufficient for the ICRC to be a qualifying employer? Thanks so much for your help!
That’s a great question Kelly. I believe it would depend on who paid you on your tax return. If you received the foreign earned income tax exclusion then you’d definitely not qualify. However, if you were paid by the US arm of the red cross even though you were overseas there’s a chance you could qualify. This reversal will be very difficult to challenge though.
Travis,
My wife worked for a 501(C)(3) hospital in Indianapolis for 10 years, but was only making payments for about 7 or 8 years and Fed Loan Servicing has “approved” her ECF form for that period. However, she now is at MDWise and it is a 501(C)(4) public health service organization that is partially funded by the State of Indiana. Fed Loans is claiming that since it’s not a 501(C)(3) and doesn’t provide a public service, she’s SOL….however, they won’t expand on why it doesn’t provide a public service, even though their mission and website state otherwise.
I’ve run into issues like this before w non 501c3 orgs. FedLoan is taking a very conservative approach right now after getting in trouble w approving too many forms from orgs that definitely didnt qualify, now theyre going the other direction. I know this isnt as helpful as I’d like, but I would strongly suggest taking a new job for the couple more years you need.
I just checked my account and noticed that between January and February of this year FedLoan Servicing issued me two very different “Pslf Qualifying Payment Update” letters–the latter reducing my supposed number of qualifying payments by 35(!) (from 100 to 65). The letter said nothing about it being a correction or update to any prior calculation.
I’ve worked for the same government employer since my loan consolidation. The CSR I spoke to at FedLoan Servicing said she would need to put a number of my payments into manual “review” because their new tracking system deemed them non-qualifying (several apparently because I “paid too early”–no matter that I’ve always had the loan servicer debit my account automatically).
Check your numbers, even if you’re certain your employer qualifies.
Good feedback Matt let us know what you find!
I have been in the income based repayment plan on automatic debit for 7.5 years. FedLoanServicing is telling me that my payments haven’t qualified, which is impossible. This happened 1.5 years ago, and they are still “reviewing” my payment history since I requested a review as they are completely wrong. Every couple of months I call about it, and they say there is no update and there’s a backlog reviewing these things. It seems pretty obvious that this administration is purposefully denying 99% of applicants, even everyone who has been in the proper repayment plan making all required payments. Does anyone know of a class action I can join under these circumstances? This is outrageous. Betsy DeVoss is a scam artist and fraud.
Your best bet is to call the Ombudsman at FedLoan and explain what you wrote here and see if they can help or speed up the process. I’ve also heard people have success by posting their concerns on the BBB.
I’m in a similar situation to Colleen. However, my situation is so confusing it’s driving me nuts. I have kept emails where Fedloan Sevicing says my payments were approved. I have also been working an extra job to make extra payments. I asked for these to be applied to my principal and was assured that would happen. Then it never did. I have filed a complaint with the DOE, all that did was get Fedloan Setvicing to deny everything and then tell me all of my payments do not qualify for my PLSF. I don’t know where to turn or who to trust. I really want an attorney, but Idon’t know what that would do.
Well in your comment you mention you made an extra payment which is always a terrible idea if you’re seeking PSLF. It’s akin to flushing money down the drain. You can contact the fedloan ombudsman office or request a manual review. Just know it’ll take 6 months but you dont need it to be complete until you get PSLF anyway
I thought that about making extra payments initially. However, my payments are so high, I’ll never see any kind of “forgiveness” . The amount I will pay by the end will be double what I owe. There will be no “forgiveness. I’ve pointed this out to Fedloan Servicing numerous times and they continued to ignore me. I’m just trying to make some kind of headway. I requested all of my customer service history, they keep sending my payment history. I feel like I’m speaking to people who can’t comprehend simple requests, but they are in charge of my loan repayments. I’ve already filed a complaint and that has gotten me nowhere.
Well my general rule of thumb is if you’ve gotten at least 2 years of low-ish payments and you’re in a PSLF eligible job, then you should be able to cap the payments on IBR or PAYE and still retain something left to forgive
“If you’re going for PSLF, you’re almost certainly at a 501(c)(3) or a government employer. If you’re not at one of those kinds of employers, and aren’t at Americorps or the Peacecorps, you probably don’t qualify for PSLF.”
Travis, per your post above, are you saying/suggesting that the tens of thousands (likely more) of physicians and other allied-health professionals working for non-profit hospital organisations will NOT qualify for PSLF!? This would be news to me and many, and seemingly contradicts the PSLF qualification form? Your statement really struck me and makes little sense be because most physicians, psychologists, and advanced degree nurses (e.g., ARNPs) obviously mostly work in non-government hospitals and clinics. A small minority of the total number of these folks end up working at 501C3s or for VA/IHS/DoD, etc.
Non profit hospitals are 501c3, there’s about 2900 in the US I think according to ACA stats. However, you have to be directly employed by the hospital. For example, there are tons of physicians employed under for profit contracting umbrellas that work in non profit hospitals that are not PSLF eligible. This is mostly due to weird state regulations and its the exception not the rule. Most healthcare folks at non profit hospitals are eligible.
I work at a Critical Access Hospital/Rural Health Clinic in California. Per California law, the corporate practice of medicine is illegal therefore doctors cannot be employed directly by hospitals (this is so MDs practice in the best interest of the patient and not the hospital). Before I took my current job in 2012, I called FedLoan to explain the situation, including that I’d be a 1099 due to the above reason. They said as long as I was hired directly by the hospital and received my paycheck directly from the hospital, my employment would qualify. I have submitted tax returns to Fedloan now for the past 8 years and my ECFs have always been approved (last one approved last week). It’s very clear on my tax returns that I’m 1099. I have 4 payments left before I can apply for forgiveness and no idea what is going to happen. Have you seen someone’s ECFs approved for this long and then denied when applying for forgiveness?
You shouldn’t be being approved so there’s a very decent chance they’ll catch this when you have to apply at the end. There’s a bill that would fix the CA problem house dems have sponsored but it hasnt gone anywhere yet
I am greatly confused about why this program is so complex. Its not that difficult, is it?
When you recert your payment plan every year, you submit your Tax information, no?
A person’s W2s have the full name of the employer and the tax ID number(s), no? Why are borrows given triple work/responsibility when all the info needed to make the determination for PSLF eligibility is already on the documentation submitted…year and after year.
Great question about why the process isn’t simpler. If you borrowed before 2010, to have those loans be eligible you had to be either very lucky or have a master’s degree in student loan BS. This is due to nuances in IBR creation and FFEL status. If you only took out loans after 2010, it was easier. If you borrowed exclusively after 2016, it’s become easier still thanks to rules not changing. Each time they change the rules it creates a lot of confusion and people mess things up.
Hi
I am a public school teacher and currently have 61 confirmed payments towards PSLF. I am working with FedLoanServicing and it has been a nightmare. It’s been a huge struggle, of calling them every couple of months for the past 8 years, making sure each payment is on track. I was wondering if you know, is it possible for me to make payments that only include my income, not my husband’s income too. He does not pay for my student loans, I do. I have received 4 different answers from FedLoanServicing and just don’t trust them. I want to do the right thing, of course legally too and don’t want to get to 120 payments and be told, it doesn’t count anyway because of something else.
Thanks
Heidi
You can only exclude your husband’s income if you file taxes separately and use the IBR or PAYE plans. Hope that helps Heidi
I am an attorney who am an independent contractor who was hired by three appellate panels (i.e. non-profit organizations who provide public interest law services for indigent individuals on a court -appointed basis and are non-profit and tax-exempt under the IRS Code) in the state of California. They are solely responsible for approving my payments on my cases and can decline to approve payment based upon the performance and quality of my work. These panels outsource their payroll services to the state of California, which, in turn, issues me a paycheck and ultimately I receive a 1099 for tax purposes. However, I am NOT an employee of the state. I am paid out of the general fund as a “vendor.” Fedloan initially approached me promising me either a reduced payment or loan forgiveness in April 2016. I was informed, by “Tyler,” that I DID in fact qualify for the loan forgiveness program because I was a “public servant” but my loan term would be reset from that date and capped at 10 years. So, looking back on things now with what I know now about PSLF, apparently none of my many years of loan payments since 2017 qualified toward PSLF despite the fact that I had been in the same job. Tyler never told me why none of my payments qualified toward PSLF credit. At any rate, Tyler told me that I would pay 90 percent less than my original loan payment and my loan payment would be reassessed based upon my actual earnings after taxes and expenses. He assured me that worse case scenario, my payments would NEVER exceed my original monthly payments, which was $420 per month. I was thrilled at the time.
The following year, 2017, I submitted an annual recertification for an “income-driven payment” and was informed my payment would be $649.76 per month. I was under the false impression that I was in the PSLF program and now Fedloan wanted even MORE money per month than my original loan payment despite Tyler’s assurances to the contrary. I sent my documents and an official complaint on May 25, 2017 stating I would not pay any more than $420.00 per month.
Unfortunately, after not having much luck, I formally went through the process of applying for loan forgiveness, despite my belief that I had already done so. This time, however, Fedloan, unlike Tyler previously, believed I did NOT qualify for PSLF because I was not an “employee” but merely an independent contractor. The end result left me in a position whereby I would either have to be in an income-driven loan option where the monthly loan payment was simply too astronomical and exceeded my original loan payment, or a fixed, 30-year moderate loan payment. I ended up settling for the 30-year fixed loan option. I have no idea if this even qualifies toward PSLF as nobody told me.
I just recently learned that in 2018, Congress expanded the scope and protections of the PSLF, and it caused me to look into things again. This led me to research it further and this was when I discovered that there may be some serious problems with my case and loan provider, Fedloan. First, I believe I was wrongfully denied eligibility from PSLF on the basis of not being an “employee” due to a failure to comply with the law. Specifically, pursuant to 34 CFR 685.219, I was hired by a public service organization that qualifies because they are non-profit under section 501(c)(3) of the IRS Code and provide public interest law services. Additionally, under the most recently amended law, I DO qualify as an “employee” or “employed” even though I am an independent contractor because the Code of Federal Regulations specifically defines “employee” and “employed” as meaning an individual who is hired and paid by a public service organization for a “CONTRACTUAL” OR employment period of at least 8 months, an average of 30 hours a week, etc. (34 CFR 685.219(b)(i)(B) and (b)(ii).) Therefore, I believe the law is clear and provides for working via contracted services, not just working directly as a paid employee (i.e. receiving a W2 from an employer). Additionally, whenever there is any question about ambiguity in a statute or intent, we are required to look to the legislative history of the statute to discern its intent. In this case, it was enacted in 2007 to encourage individuals to enter into and remain employed in public service and to alleviate the potential financial burdens associated with federal student loans of borrowers in public service occupations who were presumed generally to earn less than their counterparts in other occupations. Therefore, the history clearly indicates that people such as myself should fall within the ambit of the loan forgiveness program, especially since I am providing the exact same legal services as a court-appointed attorney who works for the public defender’s office who represents indigent individuals. The only difference is I happen to represent indigent individuals on appeal in California and the Courts of Appeal, unlike the trial courts, are required to independently contract with non-profit agencies (i.e. for whom I work as a contracted attorney) in order to provide court-appointed legal representation for those individuals. Why should I be treated any differently due to a mere loophole, technicality, or poor drafting in the statute?
At any rate, I believe I meet the eligibility requirements on second glance and was wrongly denied. Fedloan should have interpreted the statute correctly, as I already articulated. Additionally, as I already mentioned, they already DID previously deem be eligible in April 2016 when Tyler admitted I technically was a “public servant” within the meaning of the law due to the type of work I did. I do note, this is strikingly similar to a class-action lawsuit that is currently pending where the American Bar Association is suing and the case brings into question the extent to which some borrowers may be able to rely on Fedloan’s determination of whether their employment status qualifies for PSLF. In that case, attorneys were previously told they qualified for the program but Fedloan subsequently rescinded their eligibility on the basis that the ABA did not qualify as an “employer” within the law. The lawsuit stresses the unfairness involved with not just the issue of the subjective and arbitrary decision of Fedloan to change its position after so many individuals relied upon their initial decision, but also, the policy of equal protection and complying with the spirit and intent of the law, which is to promote people working in the public sector and reward them by forgiving their crushing student loan debt after their service of 10 years. The ABA attorneys contended they were no different than any other public interest attorneys who otherwise qualified for PSLF and should not be disqualified due to a rigid interpretation of the statute that would lead to absurd results and does not take into account the intent of the statute. At any rate, it is an important lawsuit and it is also very similar to my case I believe because I truly believe that Fedloan did at one point, in April 2016, deem be eligible pursuant to PSLF but then subsequently deemed me to be ineligible when another loan agent subjectively determined I did not qualify due to his/her incorrect interpretation of law. It demonstrates how subjective the process is and how a class of attorneys such as myself can just be completely excluded.
Additionally, I just recently read an MSNBC article that said that out of over 30,000 applicants, only 28 got approved for PSLF. This is alarming and shows that Fedloan potentially has ulterior motives and does NOT want borrowers to qualify for the program. Indeed, in my case, Fedloan is now making much more interest off of my loans and by the time I will be done paying off my debt over the next 30 years, I will have paid substantially WAY MORE than I originally owed when I graduated from law school. So does Fedloan has a proprietary and pecuniary interest in deceiving borrowers? Did I get duped and as a result I am worse off now than I was before and am now stuck in a 30 year loan due to Fedloan’s misrepresentations, mishandling, and deceptive practices? I am basically a professional stuck in a 50-year student loan! This is ridiculous!
What are my options? Should I try to reapply for PSLF and assert my position that I do believe I am, in fact, an “employee” within the meaning of the statute because it does apply to independent contractors, etc. (i.e. see my analysis above), and should apply to public interest attorneys like myself so as to be in compliance with the intent of the statute? Should I file some sort of compliant/grievance against Fedloan? I understand there is a Student Loan Ombudsman Group, a federally-backed group of attorneys. Should I reach out to them? I just feel duped and worse off now than when I first started with them. I wish they had left me alone. I was perfectly fine with Wells Fargo. Had I stayed with them, my loan would be paid off much sooner. Now I am in for the long haul and basically paying the equivalent of a car payment every month. So much for dedicating myself to public service and pro bono work!
This was a really interesting read Nicole. Could even be a blog post in and of itself haha. I’ve given my thoughts about the rejection rate in this blog post: https://www.studentloanplanner.com/pslf-snowball-effect/ and also this podcast episode https://www.studentloanplanner.com/podcast-what-is-pslf-snowball/
I can confirm that Fedloan doesn’t have a monetary interest to suck, they just do partly because the reimbursement rate paid to them per borrower serviced is very low. They won the bid based on low cost of the contract, hence the help they provide is low. None of the federal servicers are very good for this reason.
In terms of the legal rationale, I can’t speak to the things you cited above since I’m not an attorney. Physicians contracting through non profit hospitals have been denied since the beginning of the program. There will continue to be lawsuits over who is eligible. My opinion is that contractors are not going to be included in PSLF now or in the future even if they should be. Maybe I’ll be wrong and a court will find what you’re articulating. Time will tell.
I hope this isn’t true. I am also a court appointed attorney doing public defender work. My specialized cases used to be handled directly by the public defenders office, but they decided that all of these specialized cases should be contracted out in my county. All of my pay comes from the public defender’s office, and I only provide direct services to indigent clients. I enjoy what I am doing, but will likely switch fields if this is not eligible.
My loans have been serviced by FedLoan for nearly 8 years, and I’ve been on the PSLF track since 2011. I just checked my FedLoan account online and saw that 2 of my 4 direct loans were transferred by FedLoan. I have no idea where they were transferred to; there was no electronic notice or documentation filed for me to review. I only received notice that my payment amount had changed (it’s now significantly less). I’ve heard that only FedLoan services PSLF loans, so now I’m a bit scared. And of course it’s Sunday and I can’t call anyone.
Is it normal for FedLoan to transfer PSLF qualified loans to another company? What’s that all about? Any advice on next steps I should take (aside from calling FedLoan first thing tomorrow morning)?
No that’s really bizarre I’d definitely check into that. Makes no sense to me based on what you wrote.
https://www.americanbar.org/news/abanews/aba-news-archives/2019/02/judge-overturns-changes-to-student-loan-forgiveness-program-by-e/
Judge overturns changes to student loan forgiveness program by Education Department.
I’m not sure but it seems like you may not have read the regulations.
I read them. The judge focused on the department’s arbitrary and capricious manner in which it made the changes more than the ABA qualifying as an employer. Most of this article was written years ago and I tried to update it with some of the judge’s ruling.
I am a physician working as faculty for a state university medical school, and I started with PSLF during residency (also at a state university). Both universities are additionally 501(c)3 entities in their physician practice plans. I have never had an issue with my employment certification in the past, but this year was a surprise. I almost immediately received notification that my employment was not certified, with the statement in the letter that FedLoans required more time to look into my employment. It has now been 3 months since I sent in the certification form, with no further communication from FedLoans. I will make my 120th payment this coming December. I’m curious as to whether this lawsuit may be the cause of the delay in response. Are you aware of others experiencing the same delay in response? I’m understandably nervous that FedLoans will deny my upcoming application for forgiveness…
We’ve had people get refunds of like 16 or 17 payments when FedLoan determined that they had overpaid. So I wouldn’t worry about it. Just keep making your income driven payments even past the point you think you’re eligible and you should get the money back.
I’ve been fighting with FedLoan for one reason or another for two years. When I transferred to Fedloan I was placed into a non-qualifying plan when I’d previously been on an ICR. ( Why would anyone sign up for PSLF and then register for a standard repayment plan? )That lost me two years. Then last year they recounted my qualifying payments and just *lost* 18 months. I spent 6 months requesting my records and being ignored. They ignored my complaint from the BBB for two more months. They did NOT ignore my complaint with the State Attorney General. Finally have proof that they tried to screw me out of a year and a half of payments. One months count shows 18 payments, two months later the same time frame says zero. And no overseer cares.
Good point. I’ve heard from numerous sources the most effective way to get them to pay attention is a complaint to a congressperson or other law enforcement agency like a State AG
Hi Travis:
Thanks for your blog posts, and info on PSLF. I was wondering if loans through PSLF are completely forgiven after 120 qualifying payments, or if there was a certain amount of the loan that was paid off instead (all vs. some). I seemed to have stumbled on this question on my surfing somewhere on this topic. My wife works for the Veteran’s Administration here in Phoenix, and has a little more than 4 years to go towards successfully completing all the payments. Thanks for any help on this.
All of it as long as the debt is all Direct
Thanks for the clarification, Travis.
Wondering if anyone else has run into this situation. Apparently my interest on my student loans got to a threshold number at fedloan servicing that made them divide my loans into more subloans. This set my payments back to 0. I requested a recount 9 months ago and am still waiting for my account to be updated. I did not consolidate, I did not request my loans to be divided into more loans, they just apparently do this when it reaches a set number.
I have probably 4.5 years left before reaching the 120, but plan on staying on top of this in case it becomes an issue down the road. Just another example of how were getting screwed.
That doesn’t make any sense to me, never heard of that before
Hi, I am a law enforcement officer. I have been paying toward my loans for ten years. In order to see if I qualified for PSLF it was transferred from Nelnet to FedLoan Servicing. Once my loans were transferred I was told that I do not qualify because I am on an extended loan repayment. I called them back and they told me that Nelnet should have told me. I am upset that I did not qualify, I would not have transferred from Nelnet if I knew.
That would not have made a difference. I’d apply for the TEPSLF program and see if that helps: studentloanplanner.com/tepslf-program
This “primary purpose” language affects my girlfriend. She has been submitting and receiving back approved ECF forms for years working at a electric co-operative, 501c12. They provide emergency management and public safety. You could argue their “primary purpose” is to provide electricity. But that change was only recent and the older ECF forms say they only need to “provide any of these services”. Electric co-ops are regularity involved in emergency response due to natural disasters and public safety training.
We’ll See.
Oh boy that’s a complicated one. Yes crossing fingers for you
My wife is a nurse at a 501c4 and is in public health. The verbiage says, “ nurse, doctor, ……, nurse in a clinical setting, etc”. FedLoans keeps dwelling on the latter since it’s not a clinical setting. I keep begging the question, “What about just NURSE?!” They keep skirting the question.
I would contact your congressperon’s constituent services office and get them involved otherwise you might be waiting a while for a resolution one way or the other
I work for the Dept of veterans affairs and was told I was eligible for forgiveness after 120 payments. I have been paying for about 3 years now. All the years I payed with Sallie Mae doesn’t count which is ridiculous! FedLoan has the worst customer service. I inquired about the Betsy Davos and loan forgiveness situation and all I get is a “we don’t know”. Any time I try to contact them they either don’t know or don’t respond at all.
That’s why we have a business helping folks with big debt navigate this so they don’t mess it up. Sorry to hear some bills would retroactively count prior payments but theyre not law currently
Hi I called FedLoan to recert my IBR plan and I am on the REPAY. I was originally transferred over from Nelnet when I sent in my first employee very (non profit social worker from beginning). I have been paying with FEDLOAN close to two years. They just informed me none of my payments have counted. They have several months of no payments made. Totally false. They have the wrong dates, payments made partial, payments in forbearance or deferred for months at a time. It is a total and complete mess. I can’t get the same information twice. I should be able to see the halfway mark. And I have zero qualifying payments. I utilized my grace period after graduating and started on income based (EVERYTHING I HAVE DONE HAS BEEN BASED ON BLACK AND WHITE INFO AND THEIR GUIDANCE), then I paid the calculated zero dollar pmts for a year and half or so due to my low social work non profit income. Then I had a deferment period for about 7 months when I got a home loan and the lender told me I had to defer them to approve the loan. I called right after the 7 months and I got back on IBR. That’s when I was transferred from nelnet to FedLoan. I have Been paying them 2 years. With the exception of a forebearance of 1 month each year when my recertification paperwork is delayed in processing and my payment shoots up to 1000.00. Otherwise I pay, and no qualifying payments?! I am wondering if the forebearance disqualified my other payments prior to and after somehow?? Or did the zero dollar payments disqualify me? Or did the deferment I had to do fornmy home loan disqualify the rest of the year? I asked them every time I called and I also reiterated every single phone call from the very beginning, that I’m seeking PSLF and need things to align with that. Please help with any info???! I am absolutely devastated. This feels impossible to navigate and they are blowing me off. Thx
That’s why people pay us for help bc the free options are pretty awful.
Hello,
I am 8 years into PSLF with Fedloan. I should be at 10 years in December but fell victim to about 9-12 months of deferment due to Fedloan processing and calculation errors and delays, their paperwork errors, etc. (aka the reasons for the lawsuit!) I live in MA and am part of the class action suit. Do you have any idea when we may start hearing about that? I am hoping to get credited some of those missed months! The end is near!
Contact your Congressperson’s office they might help you!
Would you recommend consulting with an attorney regarding this loan repayment? My husband and I are about 7 years into the program.
Hi Leslie,
We aren’t attorneys and can’t give legal advice; however, this lawsuit likely will not affect most people working toward PSLF.
However, there are certainly situations where contacting a student loan lawyer can be helpful. You can find more information here to see if this fits your situation: https://www.studentloanplanner.com/student-loan-lawyer/
Does you have a source that show what “rules” were in affect on what date/month since it has been a moving target since 2007. Is there a record of the on the fly changes? I am curious about the $5 forced forbearance in which you are placed when FedLoans can’t get their shit together. Especially if FedLoans is found to be in the wrong by the Dept. of Education and you have proof of money returned at the end of the multiple months process. At this point, I can’t even get FedLoans to accept an employee certification form documenting work with a government agency (2 months in with 2 sets of rejection letters) much less arguing about the number of qualifying payments (next steps). I have received a rejection letter that literally says the form was blank when you add up all of the “missing information” sections. What would it take for the Dept. of Education to admit that FedLoans is non-functional at this point.
A bunch of ppl contacting their Congressperson and getting them to cancel the contract.
What about working for a state-level supreme court on a grant-funded initiative? I am not sure how to even go about looking for their tax code. I do not work there yet, but considering the job. Eligibility is a big deciding factor.
You’d have to make sure you’re considered a W2 employee instead of a contractor. For a short term grant I’d double check you’re employed by the court and not by some other entity. You could just ask HR for a sample paystub.
I made 120 payments but was on the wrong repayment plan so I was denied PSLF. I applied for TEPSLF but was denied because my payments weren’t equal to what my payments would be on an Income Driven Plan. I changed to an Income Driven Plan which almost doubled my payments. FedLoan says if I make 13 payments on this new plan I can reapply for TEPSLF. I had no idea I needed to be on a different repayment plan until I applied for PSLF. It’s a nightmare.
I’ve made more then 120 payments and when I applied I was told none of them were eligible because I was on a graduated plan. So I gave up and didn’t think anything of it. I found out about the TEPSLF which allowed people like me to switch to an income driven plan for a year and then be eligible because I had those 120 payments. Well after going through the whole process, I called FEDLOAN about something else only to be told that I never actually made 120 payments because I consolidated in 2014 so none of the payments prior to that counted. When I consolidated, I was never told that this would affect my PSLF. All those times I’ve spoked to people about how to apply and things like that not one of them ever mentioned I wasn’t even eligible because I didn’t make 120 payments. I was also just told that even for the TEPSLF, you have to be on a income driven plan for 10 years. The TEPSLF was created to help people who wasn’t originally on an eligible payment plan. So why would I switch payment plans and pay for 10 years for the TEPSLF if that’s what I needed to do for the regular PSLF. None of it makes sense and none of it is ever relayed to the borrowers and they are deceiving everyone into thinking they have a chance after working their butts off for 10+ years and there’s no hope for anyone. This is the most fraudulent and deceptive program I’ve ever encountered. I wish I had the money, I’d sue them too!!
Sorry to hear that really does stink. Keep certifying though it’s better than paying it all off directly
[…] and qualifying employers (you must see if your employed qualifies to apply for PSLF). There’s a lawsuit about […]
My loans are all direct and in income-based repayment, but I’m not sure if my employer qualifies. I work at a public university (University of Missouri), which seems like it would fit under the “public education” category. I took a look at the university’s most recent financial statements and they indicate that they are tax exempt under Section 115.
From the statement:
“The income generated by the University, as an instrumentality unit of the State, is generally excluded from federal income taxes under Section 115 of the Internal Revenue Code. However, the University remains subject to income taxes on any net income that is derived from a trade or business, regularly carried on and not in furtherance of the purpose for which it is exempt. No income tax provision has been recorded as the net income, if any, from unrelated trade or business income, is not material to the financial statements.”
Would my employer qualify under Section 115?
Your employer clearly would qualify for PSLF as long as you’re directly employed by them.
“Jennifer says
APRIL 8, 2019 AT 10:25 PM
I’ve been fighting with FedLoan for one reason or another for two years. When I transferred to Fedloan I was placed into a non-qualifying plan when I’d previously been on an ICR. ( Why would anyone sign up for PSLF and then register for a standard repayment plan? )That lost me two years. Then last year they recounted my qualifying payments and just *lost* 18 months. I spent 6 months requesting my records and being ignored. They ignored my complaint from the BBB for two more months. They did NOT ignore my complaint with the State Attorney General. Finally have proof that they tried to screw me out of a year and a half of payments. One months count shows 18 payments, two months later the same time frame says zero. And no overseer cares.”
This is exactly what happened to me. In 2016 my loans were moved from Great Lakes servicing to Fed Loan servicing as I was going for PSLF after starting my law enforcement career. They accepted my PSLF application with my new employer and it wasn’t until over a year later that I noticed that my payments were not “qualifying” payments towards the 120 monthly payment goal for the forgiveness of my loans. When I called Fed Loan for clarification I was told that I was using a “non-qualifying repayment plan” thus my payments were not being counted towards PSLF. The kicker was when I finally changed over to one of their “qualifying repayment plans” my payments were lower than what I had been giving them the whole time after I was accepted in their PSLF plan!! Scam.
They would not give me credit for those previous payments. Why on earth would you allow a customer to be approved for a loan forgiveness program that you allegedly verified, then allow said customer to pay you monthly in a non-qualifying way and not advise them of this if it wasn’t for the pure fact that you’re attempting to deceive them to extend their business with you longer than the 120 months you’ve agreed to in the first place. How is this legal, is it not fraud by deception?
I called Direct loans to complain and they said I would need to take up any and all complaints with my loan service provider (Fed Loan.) Ha, that’s like telling a thief he needs to manage his own crimes more efficiently if he wants to continue his criminal enterprise and allow him to continue stealing from you.
Any suggestions for which State AG I should be speaking with? There’s two states on Fed Loan’s website, PA and MO. And I did not read through all of these comments but anyone else have this happen to them and have their payments given back to them as credit? Thanks for your time
Ouch. You might be able to claim TEPSLF if you wouldve been on track to get them forgiven in the next 2 years but sounds like you can complain to your Congressperson and hope for a lawsuit.
when I requalified for PSLF it said I had 82 payments remaining, but when I looked at all the dates the last dates were from11/2014 -11/15, and so on through 11/30/17-11/29/18. We are in 11/2019 now why is it a year behind I was expecting to see 70 payments remaining. I made all my payments all of 2019, I feel sick so sick.
Plus, in 2013 I qualified for a repayment program and it said my payment was zero, but I was not under fed loan then. I had been taken by a company called Broadsword student loan and for a whole year my loan was 0. When the following year came 2014 Spring I found that Broadsword was a scam and when trying to get ahold of this EDDICA that worked there (I have those emails) she no longer worked there. All of a sudden I was getting calls from Affordable student loans saying they are a branch of broadsword and I am to continue with them, and then I started getting qualified and then w/I a few months of that NAVIANT was calling me and saying that both affordable student loans and Broadsword were branches of theirs. I was so mixed up and depressed I could barely concentrate as I was scammed, and lead to believe they were legit and paying for their services. Then I found out about FED LOAN in 2014 but they did not take into account for one whole year of my Pslf at all. Nor did they look into it I had filed the papers and been approved as I worked for the same employer as I do now since 2011.
Everyday I wake up and think about how I went wrong going to school, I should not have as it has been a long journey and has really been getting me down. You would think that each year that passes I would get less stressed. Honestly I have been through hell and back with it. I am the only one of my parents children that went to college and years later I am the only one that owes thousands on my student loan, my siblings all have M-F jobs paying as good as me and all of them have better insurance. Depressed yes I am. I want to add that year from 2013 when I was qualified for pslf by Broadsword it is a year off what I have now and because my payment was zero because I did not make enough being a single mother.
It seems as though no matter how I try I just keep getting brought down.
I am trying to look forward to the years ahead, but wasting away in the here and now with this above my head.
If our consult is affordable for you I’d suggest getting a plan to look at everything that’s going on https://www.studentloanplanner.com/hire-student-loan-help/
You want to understand everything going on so that you don’t have to stress about it.
A company that I am interested in working for is a 115(1), and the retirement plans offered are as you mentioned, the 403(b) and 457(b). The company is in the education industry–research, assessment, and other services for schools and education. How can I find out if the company is eligible for the PSLF? Thanks!
Almost surely it is. But you need to ask for the EIN on your W2 and then check it with tax exempt organizations on the IRS site. If it shows up it 100% is but if its not then it’s a question mark.
My wife works for a non profit, but it’s a 501(c)(4). So, they go into further requirements and it’s a hot mess with these people getting answers from them. The public health avenue lists “doctors, nurses, ……nurses in a clinical setting, etc”. HOWEVER, Fed Loans has taken it upon themselves to be the end all decision maker. They tell me since my wife is not a “nurse in a clinical setting”, her employment doesn’t qualify. I keep trying to explain to them that that’s not the only “nurse” that’s included in the requirement. Why is both “nurse” and “nurse in a clinical setting” included if they’re only going to accept one of them? So just because JW’s employer is non profit doesn’t necessarily mean it 100% qualifies for PSLF.
My wife and I graduated from grad school in 1999 with counseling degrees from a major state university (out of state that i$). We began paying of our loans as soon as they started which were around 100K my wife and I combined. We consolidated the loans in around 2004 in my name. We never missed a payment. I have always worked in public sector government subsidized (medicaid and state funded) mental health programs (lower paying). In 2007 or so I heard of PSLF. I went through all the steps, never missed a payment, stayed in the same sector of work. When the end of the 10 years approached I got all the documents- my employment verified, etc. Everything was perfect and I sent it all in to the mighty FedLoan who had since started servicing my loan… I was then told my loan payment program was not one that qualified. This was late 2017. At no point in the process was there ever any indication that it would not and I was paying around $500 or more a month. I had already been paying for 7 years prior to the loan forgiveness program coming out. I appealed and got nowhere. About 5 months later i read all these articles about how FedLoan had bilked others in my situation and they were opening up a new program to reconsider these. I was declined again. After about 20 years of paying off 100k in student loans I’ve managed to carve off 30K when in actuality I’ve paid upwards of 120k. It will take me 15 more years to pay them off at the current clip and by that time I’ll have paid the original amount borrowed 3 times. I get updates from FedLoan every other month telling me to update my payment plan so it qualifies for PSLF which make me sick every time I get them. I’ve tried on occasion to go in and change the plan but it is not something that you can just go in and do- they do not make it easy and honestly I’ve quit trying and I’m not paying any more than I should in hopes in the next several years there will be true student loan forgiveness I know that is naive.
I have stayed in private sector, lower paying mental health work my ENTIRE career due to the promise of PSLF. My career has stagnated- I went to school to be a clinician- someone who helps people. I push paper and writer notes most of the day. It is not what I went to school for- it is not what I went into debt for. I was told I’d have my loans forgiven by public service student loan forgiveness program. At no point was it ever even suggested that I was not on the right track as PSLF only existed in theory as no one had actually seen it come to fruition. I calculated it and over that 10 years if I’d paid maybe 50 a month more I’d have been in a correct repayment category. I’d have cut them a check for the difference eon the spot to “be in the right category”.
FedLoans took part of my life away from me- the ability to be what I wanted to be in my career not to mention to be able to provide better lives for my family. I could have changed career paths many times and gone into more lucrative areas of my field but have not. Its been almost 2.5 years since I got the word that I was declined for the first time. At that moment for the first time in my life or since I was nearly suicidal when I read the letter. I think I have gone into denial a bit and know that “someday they will be paid off”.
FedLoan have only ever been cold to me- I have contacted customer service a few times and they are the worst providers of customer service I have ever dealt with. I don’t know if there is anything i can do. I wish there was some way I could get to the bottom of this and then take that and help others do the same.
Great article!
Question: I work for a public state-university (The University of Texas at Dallas). I’m trying to find it’s tax status, and it is stated as tax exempt, but it’s unclear whether or not it is a 501(c)(3). The main retirement plan is the teachers state pension plan called the TRS of Texas. Do you have any insight on whether this fits in the definition of qualifying employer?
Yes it does
I have a issue with Fed-Loan Servicing, and would like to see if I can get some information from you guys.
So it starts about 2 years ago whenever I called Fed-Loan Servicing with my account details to see if I can change the plan because the total amount was not going down even with payments for more than 5 years with them. So the plan Fed-Loan Servicing have suggested was $190 pay monthly for 10 years will complete the loan payments and pay off. But, whenever I called in later that year, they have told that the plan was 15 years for $190 monthly payment to complete my plan for loan pay up. Their information keeps on changing whenever I call back several times, and I don’t see my account amount balance going down and whenever I called in recently in 2020 of this year they said I am not enrolled in any plan that was explained above. I am thinking about starting a long road to sue them with providing me with wrong or miss information and also the action towards the Fed-Loan Servicing unaware of the currently situation with my account details. I just want to know if you guys are able to give me an advise on what needs to happen as I have called in Fed-Loan Servicing several times and they are unwilling to help and give no support to my current situation. I simply want to pay off my loan, but at the same time I am not wanting to be in an unfair situation. I know the article is mainly about PSLF, but I am one of the former student who is having a big issue with Fed-Loan Servicing and needs help with it. Thank you for your help and hope to hear back soon.
When communicating with FedLoan (or any servicer), you need to get as much as you can in writing for exactly this reason. You could contact a student loan lawyer for advice to see if you have a case. Here’s an article about how that might help: https://www.studentloanplanner.com/student-loan-lawyer/
Thank you for the very informative article and answer in the comments section!
I’ve been working for a hospital that is a part of Ascension Health. My retirement plan is 403(b). My ECF has been approved for the past 5 years, however, when I search the EIN on my W2, it does not show up on the IRS tax exempt search or on the new PSLF tool. Any opinions on if I’m on the right track?
Thanks!
Hi,
Last year I transferred my loan to Fedloan for PLSF. I had 48 qualifying payments according to Navient but was advised by Fedloan that I needed to move the debt to process PLSF. Fast forward 6 months and I send in my recertification letter. I receive a response indicating they have received my certification and I now have 5 qualifying payments posted. Wait, what? I email and ask for a review because I should have 53 qualifying payments. Nope, the account was consolidated upon transfer and the clock restarted. How is this possible? My contract with the department of education specifically says I’m only eligible to consolidate once which I did in 2000. My new servicer hasn’t adjusted the terms, my balance and interest rate are the same. What the heck are they talking about? And to make things worse they increased my monthly payment my 53%!
You can only consolidate your loans once. But you can consolidate new loans into an older consolidation loan. For instance, if you have 3 loans and consolidate 2 loans together, you’re left with 2 loans. Those can still be consolidated. I don’t know if that was the case in your situation or not. If you had more than one loan that transferred to FedLoan, they may have consolidated them together when it transferred. It should have been spelled out in the paperwork you sent to FedLoan exactly what the process was. You should definitely contact FedLoan to ask what the process was.
Hello. I am wondering if working for a 501c3 skilled nursing home for 30+ hrs/wk as an independent contractor psychologist would qualify me for PSLF or do I have to be a W2 employee?
If you’re an independent contractor, it usually means you aren’t employed officially by any not for profit entity. Additionally, you have to be employed full time and contractors are by definition not employees.
Thank you! Helpful info. That is what I was thinking but wanted a second opinion.
I am a 64 year old RN who has worked at an Indian Health Facility for over 17 years. I earned two undergraduate degrees and a masters degree, accumulating a three figure student loan debt. While in school I underwent a spinal fusion surgery, suffered a stroke, underwent a double hernia repair, had a grapefruit sized benign tumor removed from my chest, and underwent treatment for a brain tumor that was initially diagnosed as terminal. Even so, I earned all three degrees in 8 years time. During this time, I was also raising three teenagers as a single parent. I was not a professional student. After graduation, I remarried, moved to an area just outside of an Indian reservation, got a job at the tribal hospital, and have been there since. Initially I worked a PRN position at a hospital in a nearby town along with my full time position at the tribal facility. I paid double and triple payments most of the time. I had to take a couple of forbearance when my wife suffered a heart attack and underwent bypass surgery, when I tore the Achilles tendon in my foot and underwent a transplant, when I developed Prostrate Cancer and underwent treatment, and later when my wife passed away after a long illness. I inquired about the loan forgiveness program and was told by a service representative that all I had to do was make 120 qualifying payments while working in a qualified facility, then apply for forgiveness. I verified the status of our facility, filled out the paperwork, had it certified by HR, and submitted it. Everything was approved. I did this over and over for years. Then in 2016, just after my wife passed away and my back gave out for good, I inquired how many qualifying payments I had made, and was told “none.” This was because they never switched my to an income based plan. At that time they switched me to an income based plan. I had to give up my PRN job due to back problems. I have managed to continue to work at the tribal facility. I mostly do desk work now, but still in the role of a nurse. My plan is to work until age 73, however the odds of being able to are not great. Counting the payments made since they changed me to an income based plan, I have 45 of the required 120 payments made. I feel the the previous loan servicer, William D. Ford, and my later loan servicer Fedloan have failed to inform me of all of the requirements needed to complete the process. Counting all of the payments I made from 2007 until present, I have around 140 paid. I feel that I should join a current lawsuit or hire an attorney and pursue this. What are your thoughts? Thanks.
Typo, 6 figure instead of 3.
Unfortunately, this sort of situation is common. You must be on a qualifying repayment plan to be eligible for PSLF and servicers are bad at giving you all the details. You could contact an attorney to explore your situation but there’s no guarantee.
I work for Texas Tech Health Sciences Center. We were established with the 61st Texas Legislature.
I submitted my employment verification back in November 2019.
Fedloan has still failed to verify my employment and update my account status for qualifying payments.
Every time I reach out to them they give some BS answer like “If you didn’t use the PSLF tool then we have to manually check your employment information, and because there are so many applicants, this takes time.” or “Your employer has recently been audited and their PSLF qualifying status is under review.”
As to the first, I did use the tool and its been almost a year and they still haven’t updated my status.
For the second I call complete BS. How is a state established public university “under review”. My retirement plan is in TRS, my benefits are part of the state employment package. I am a state employee.
Fedloan is so inept it’s bording on fraud.
So sorry to read this, Chris! Sounds like one of the top 4 complaints about FedLoan Servicing. If interested, check out this blog on how borrowers can influence student loan policy. You’ll find a section on how you can submit a complaint!