How to Determine If You Are Eligible for Student Loan Forgiveness
Every Monday, we address one of your pressing personal finance questions by seeking advice from several financial experts. If you have a general question or money issue, or just want to talk about something PeFi-related, leave it in the comments or email me at [email protected].
Brian tweeted a question this week:
I receive repayment and write to find out what laws are in place to protect borrowers? Over the years, my loans have been turned over to several service providers and my current service staff only gave me a loan for six months out of the three years I repaid in [Government Service Loan Forgiveness], and took a year and am looking to “recheck my payment history … I plan to file a complaint with the [Consumer Financial Protection Bureau] and my state attorney general, but I don’t know of anything that I can legally point to to strengthen my complaint.
This is what individual experts usually say about a problem that affects each person differently: if you need personalized advice, you should see a financial planner.
Make sure you are actually on the right track
This is a very unpleasant, but, unfortunately, too frequent occurrence. In fact, many of your emails and comments were simply requests for how to ensure that student loan officers are properly tracking your information.
Tomorrow we will take a closer look at the smallest details of the government service loan forgiveness program. To date, answering your question, unfortunately, there are not many consumer protections available as far as federal laws are concerned.
And while you can file a complaint (more on that in a moment), let’s take a look at everything in order: you really need to double (and triple) check that you are indeed registered with the PSLF and meet the strict requirements:
- You have federal direct loans (if you don’t know what repayment plan you have, log into My Federal Student Aid ). Private loans cannot be forgiven. If you have federal loans, you can see a list and find out who your service staff are on the National Student Loan Data System website .
- The related repayment plans include income-based repayment plans .
- Under the direct loan plan, you made 120 qualifying monthly payments (they do not have to be consecutive). Here you can see how many eligible payments you have made .
- You must work full time for all 120 payments (which means “you meet your employer’s definition for full time or work at least 30 hours per week, whichever is greater”).
- You must work for a federal, state, local, or tribal government organization or non-profit 501 (c) (3) (The American Bar Association is currently filing a claim with the Department of Education for aspect 501 (c) (3) it).
- You must complete and submit an Employment Proof Form every year to make sure you are on the right track (and every time you change employer to make sure you remain eligible).
- After you have made your 120 payments, you need to submit this form in order to truly be forgiven .
The experts I spoke with said it was important to let your service staff know that you want to use an income based repayment plan because there is no incentive on their part to just put you in it (it doesn’t make them a lot of money). “If the support staff seems unsure, hang up and call back to speak with someone else,” says Mark Kantrowitz, student loan and financial aid expert . And you need to proactively check once or twice a year to make sure you’re still on the right track – no one else will do it for you.
Oh yeah, and don’t forget to read your mail or spam-like emails from the student loan staff. It probably contains important information.
Make a complaint
If it turns out that your service staff screwed up with you, you don’t have a ton of remedies. But here’s what you can do:
“Collect records that show when you made each payment on your loans, as well as records of when you filed your annual recertification documents, to provide information about your income to service personnel,” says Kantrowitz.
Paperwork is a key component here. If you’ve repaid your loans for a while, you may not have cataloged all of your paperwork over the years, so it’s really hard to prove anything, ”says Leslie H. Tyne , attorney and student loan expert. When you have a student loan, you should track it yourself and not rely on the other side. Document every payment and every correspondence. Keep the really good files, ”says Tyne. “They are losing payments and you need to prove how it happened.”
In addition to filing a complaint with the CFPB’s online grievance system , Kantrowitz also suggests filing a complaint with the US Department of Education’s feedback system because the CFPB and the US Department of Education do not exchange complaints with each other. You can also file a dispute with the FSA ‘s Human Rights Commissioner .
But if you were paying attention, you know that the CFPB and the Department of Education do not pay attention to consumer protection right now – in fact, they seem to be actively working against the interests of voters. So you will want to look to government protection. Of course, they differ, so where you live will play a big role in your options.
If it comes down to it, you can hire a lawyer and sue, in which case you better make sure you have all the paperwork and payment records in place. This may not even mean a lawsuit, but rather having an intermediary to settle the terms for you.
Lobby your representatives
Mortgage services are governed by the Real Estate Transactions Procedure Act, and credit card companies are governed by the Credit Card Liability and Disclosure Act, both of which set strict service requirements. But for student loans, which are regulated primarily by the Higher Education Act, there is nothing like it.
“In terms of how payments are processed correctly and what remedies borrowers have, when payments are lost, they are missing, and that’s a big problem,” says Persis Yu, a lawyer at the National Consumer Rights Advocacy Center and director of Student Loan Borrower Services. Project.
So if you really want to improve accountability, lobby your representatives. Countless industry lobbyists speak to your congressmen and women every day, so you need your voice to be heard too.
To begin with, the Senate Committee on Health, Education, Labor and Pensions (HELP) asked borrowers for applications for student loans and financial aid. You can email them here: [email protected] .
But you need to go further. “There are many bills that were not successful but were initiated by a constitutional concern,” says Travis Hornsby, founder of the Student Loan Planner . “This is not a super party question, so they may be more inclined to listen.”
We accept inquiries about your student loan . Leave a comment or email [email protected] .