How I Obtained My Student Loans Forgiveness: Florida Public Advocate | Personal finance

Anna Helhoski

Beth Bourdon, an assistant public defender at the Orange County Public Defender’s office in Orlando, Florida, was used to her student loans not qualifying for the relief that other federal loans did.

He had loans for the Family Education Loan Program, or FFEL. They are an old type of federal student loan that could be owned by the federal government or a private company. This type of loan generally does not qualify for the benefits that come with federal direct loans. Such benefits include income-led repayment, loan repayment, or, more recently, suspension of federal student loan payments.

“When everyone else’s student loan payments were suspended due to COVID, mine were not suspended. I paid every month,” says Bourdon. “When everyone else’s interest rate went down to zero, mine didn’t go down.”

He eventually took a break with the help of a temporary exemption for the public service loan forgiveness program. The waiver, which includes FFEL loans, counts past payments into the total required to pay off the debt that otherwise would not have been eligible.

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Through the waiver, Bourdon saw his remaining $ 57,000 of law school debts written off.

A debt relief program with a grim success rate

For years, most of the borrowers who have asked for forgiveness of the public service loan have been turned down. The approval rate since the start of the program in 2007 has been around 2.4%.

Full debt settlement requires 120 qualified payments made while working full time for an eligible employer such as a public school, public hospital, qualified nonprofit, or government. But most borrowers had failed, sometimes for years, in their attempts to argue that payments were counted towards forgiveness.

Following public criticism, the Biden administration made temporary changes to correct some of the flaws in the program’s execution. Hence, the waiver of the PSLF, which offers borrowers the opportunity to receive credit for past payments that have not met the program’s strict rules. Since the waiver was implemented in October 2021, federal data shows that PSLF approvals through June 2022 have risen to nearly 10%.

A short window of forgiveness

Bourdon had about $ 75,000 in student loans, including $ 20,000 in college debt which he used to attend the University of Central Florida. He had already repaid his university debt when he learned of the renunciation of the PSLF. That was only her debt from her law school – originally about $ 55,000 – which she had held since 2004, when she earned her law degree from Stetson University College of Law in Gulfport, Florida.

Bourdon says he posted on Twitter last fall about how she didn’t qualify for the pardon due to the type of federal loans she was carrying. In response, she received a direct message about the waiver from a member of the Debt Collective, a membership-based debtors’ union and non-profit advocacy organization. Finding out that she could see her debt canceled prompted her to apply, albeit not without some apprehension.

“I was really afraid of ruining something,” says Bourdon. “But I said to myself ‘This is the only chance I have and it’s just an open window for a year.’ I didn’t know how long the process would take. “

She doesn’t recommend applying for PSLF while also working on a first degree murder trial in another county, like she did. But the most typical aspect of her application process went like this:

First, Bourdon used the federal government employer search tool for PSLF, a database of all employers who qualify for the benefit. But the PSLF helper tool turned out to be fussy and less intuitive for Bourdon, so he ditched it.

Subsequently, Bourdon asked for consolidation, a necessary step for borrowers who do not have direct loans. However, he says he was afraid to consolidate his debt due to the strict rules of public service loan forgiveness and income-driven repayment forgiveness – if you consolidate, the countdown to forgiveness is reset.

Bourdon took the plunge in good faith. In the process, he chose to have his loans served by the only student loan manager who handles debt for borrowers seeking PSLF (it was FedLoan Servicing at the time, but those loans are in the process of moving to MOHELA by the end. of the year).

Finally, he presented the combined PSLF / employer certification form. He originally had two separate waiver forms due to a work stoppage. But her employer’s human resources department sent back a single form and told her that even if she had split work periods, the federal student aid office would process it on one form.

This turned out to be a mistake.

Bourdon filed the single application in November 2021. However, in early January 2022, he received a letter stating that he had only one qualifying payment under the waiver and still needed to make 119 more payments.

“I started going crazy,” says Bourdon. He received advice from the Debt Collective to submit two forms to certify his employment that accurately showed the separate periods of public service employment in his history of him.

So, he waited and checked his account every single day.

“Nothing seemed to change. I was getting anxious,” says Bourdon. Then he saw a disappointing $ 1,000 drop in his total balance. “It was like, ‘Oh, thank you very much,'” he says.

On February 15th, Bourdon logged into his account and saw that his debt was zero. But she, instead of immediate relief, she says she was full of doubts.

“For a second, I thought, ‘this is a trick,'” says Bourdon.

But two days later, he had a message in his account, a letter from his servant confirming the settlement of his debt.

How to get PSLF exemption

More than 146,000 borrowers saw $ 9 billion in loan debt forgiven through temporary waiver, federal data for June shows. The average balance discharged through the waiver is $ 61,408. If your employer qualifies you for PSLF, you should apply even if previous payments have been denied.

The PSLF exemption counts past payments that previously did not qualify, including:

  • Late payments.
  • Payments less than the full amount due.
  • Payments made on the wrong repayment schedule.
  • Payments made on loans that were previously ineligible, such as FFEL loans or Perkins loans.
  • Payments not made during concession periods of 12 consecutive months or more.
  • Months spent on deferral, other than school deferral, before 2013.

Use the PSLF service tool to search for a qualified employer and generate a form. It has been updated to align with the waiver.

To qualify, borrowers must already have direct loans or consolidate their federal debt into a new direct loan. The consolidation phase is key – borrowers can submit a combined PSLF / Employer Certification form before consolidating, but they must consolidate in order to qualify for forgiveness.

To find out if you are eligible for additional payments and to learn more about the waiver, go to the Federal Student Aid website. Make sure you submit it before the waiver expires on October 31st.

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