Student Loan Forgiveness Gets Congressional Boost

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First Come, First Served

If you thought you were out of luck to qualify for the Public Service Loan Forgiveness (PSLF) program because you were enrolled in graduated or extended repayment plans — Congress recently did you a favor.

Forbes.com reports that as part of the new federal spending bill, $350 million has been authorized to the Department of Education to offer forgiveness to all student loan borrowers who have a loan from the Direct program, have made all payments in full and on time, and have worked 10 years in a public service job for a qualifying employer.

The only catch? The funds will be given out on a first-come, first-served basis until the money runs out — which could be pretty quickly given the many newly eligible recipients. The application process will begin in about 60 days, at the end of May.

 The PSLF was established in 2007 to allow student loan borrowers who pursue government or non-profit public service jobs to wipe out their remaining debt after 10 years of on-time payments. Of the eight repayment plans available to borrowers, only four of them were generally eligible for PSLF, and many debtors picked a non-qualifying plan — sometimes receiving bad advice from a loan servicer.

After years of timely payments, these debtors learned their prior payments would not qualify, and there was no way to go back and retroactively fix the error. In one of the most prominent cases, a teacher in Eugene, Oregon found out after paying back $70,000 to the government under the wrong repayment plan, he would have to switch plans and start over if he wanted to get his loans forgiven.

You can read more about the Public Service Loan Forgiveness program on our sister website that's dedicated to Student Loan Debt resolution.

 

Are you interested in learning how this amendment could affect your student loan status? Schedule your free initial consultation with DJ Rausa today.

Student Loan Lawyer | D.J. Rausa
We have a new sister website dedicated to Student Loan Debt Resolution. Please visit San Diego Student Loan Lawyer for more information regarding options for management and settlement of your student loan debt.

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D.J. Rausa

With over 21 years of experience as a consumer bankruptcy attorney, D.J. Rausa stays on the cutting edge of Bankruptcy and Student Loan Law which enables him to provide vital information to his clients.

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Mr. Rausa is extremely knowledgeable with the complexities of Federal Student Loans.
I went from a thriving career to full medical disability, ending with an SSDI placement. Unfortunately, I lost everything and became unable to continue making the student loan payments, so it was in deferment for over five years. When the SSDI settled I tried to negotiate an affordable payment plan with the loan holders but they refused my efforts, instead demanding over twice the amount I could afford.
I contacted Mr. Rausa and found him to be courteous, responsive and quick to assess my situation. He was sure he could help and took time to answer all questions, which relieved much anxiety. Within months he successfully resolved the debt! With much confidence, I highly recommend Mr. Rausa.
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