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Loan Forgiveness Failure


When I graduated from my PhD program, I had nearly $100,000 of student loan debt.

So, one might say it’s a topic “near and dear” to my heart. I’ve been opposed to entering into any type of student loan forgiveness program in the past. Ultimately, I just want to repay my own dang loans rather than depending on the government to maybe one-day pay them off for me. In fact, I wrote here about some of the horror stories that make me worried to rely upon a government forgiveness program.

So imagine my surprise (cough *sarcasm* cough) when I saw this story float across my Facebook feed a couple days ago. The headline reads: “This government loan forgiveness program has rejected 99% of borrowers so far.”

According to the article,

“So far, roughly 99% of processed applications for forgiveness under a government program aimed at helping public servants manage their federal student-loan debt had their applications rejected……Of the roughly 29,000 applications processed so far, only 96 borrowers have had about $5.52 million in debt discharged under the program.”

I know a couple of these people. The first year of the program was 2007 and it requires 10-years of on-time payments for debt to be discharged. That means the first “cohort” to receive debt forgiveness would’ve occurred just last year, in 2017. I personally know 2 different friends from grad school who have posted publicly (Facebook) about thinking they were entered into this loan forgiveness program for a full 10 YEARS, fully expecting and planning to have remaining debt discharged….only to have the rug pulled out from under them. Complicated explanations and nitpicky reasons for why they were not eligible.  It’s a pretty devastating thing to realize and come to terms with.

So I keep on making those monthly payments. I may do a temporary forbearance (still paying interest) while my life-situation is so up-in-the-air. But I’ll pay these loans off eventually. Hopefully sooner rather than later!!!

(Unless the US wants to just cancel student loans in order to grow the US economy. That would be pretty cool. I kid, I kid!)




  • Reply Sarah |

    I do research in this area (among others) professionally. The major problem is the Department of Education outsourcing this program to private loan servicers instead of handling things in-house. It’s for ideological reasons (small government) but in my line of work, I see it over and over and over again that the contractors cost more and provide worse service. I believe you mentioned that you’re serviced through Navient, which is the worst offender.

    • Reply Ashley |

      YES! I do have Navient, and they ARE the worst. Really awful lenders. I’ll be glad to pay them off and get them out of my life!

  • Reply JP |

    You know what they say the nine most terrifying words are – “I’m from the government and I’m here to help”!

  • Reply Honey Smith |

    Those who received forgiveness will get a rude surprise when they find out the forgiven balance is considered income and now they owe the irs 1/3 their former balance as a lump sum.y

    • Reply Ashley |

      I’ve thought this, but another of my friends (also currently enrolled in PSLF program) vehemently disagrees with me and swears she’s triple/quadruple checked and that’s not the case with her loan.
      I just live my life…..ain’t my money.

      • Reply angie |

        I believe PLSF has no taxes after forgiveness. REPAYE which does not require a nonprofit or govt job is a different type of forgiveness. The amounts forgiven under REPAYE are taxed as income while PLSF is not.

  • Reply Cheryl |

    I feel if you borrow the money, you pay it back. We borrowed to help pay some of our kids college costs, should we not be responsible and pay the money due.

  • Reply Lynn |

    I chose to work at a nonprofit instead of pursuing higher paying jobs in the private sector because of PSLF. Since this was proposed as a benefit and many, many people have made life choices based on the PSLF promise, I feel like it is unethical to rip the rug out from under 99% of people. I should be done with my 120 payments in about two years, and I’m hoping that the remainder of my loans are forgiven. I have been choosing to pay more than the minimums for the past eight years, though, so if it doesn’t work out, I’m not going to be in too bad shape. I will be pissed, and I think I have the right to be.

So, what do you think ?