The Civil Service Loan Forgiveness Program is sometimes criticized for providing debt relief to borrowers working in the civil service who have taken out large loan amounts and earn enough income to repay their debt.
One of the borrowers who benefited from the PSLF is Dr. Casey Glass, an associate professor of emergency medicine at Wake Forest University School of Medicine in Winston-Salem, North Carolina. After graduating from medical school, Glass spent her entire career with a nonprofit employer. He had a six-figure debt but had no trouble paying it off.
“I’m probably the kind of person that people would say ‘why [his] will the loans be cancelled? Glass said. But he points out that health professionals who work in the public service must bear the cost of their education while knowingly entering a field where they will have a lower salary during the critical income years.
“I have a significant pay cut compared to my peers working in the private market in the same type of job,” says Glass. “If you work for a non-profit organization and thus contribute to the community, [PSLF] is something you are eligible for.”
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He eventually got his remaining $108,000 in federal student loans forgiven under the Civil Service Loan Forgiveness Program. But this was only made possible by a temporary waiver which was due to expire at the end of October.
Although he worked for a nonprofit employer rather than a private hospital where he could have earned a much higher income, Glass spent most of his time paying off the wrong kind of loan to qualify for the discount.
A dismally successful debt forgiveness program
For years, most borrowers who applied for loan forgiveness from the public service were turned down. The approval rate since the program’s inception in 2007 has hovered around 2.4%.
A full debt discharge requires 120 qualifying 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 been floundering, sometimes for years, in their attempts to argue for the payments to be considered for forgiveness.
Following public criticism, the Biden administration made temporary changes to fix some of the flaws in the program’s execution. Hence the PSLF derogation. It offers borrowers the opportunity to receive credit for past payments that have not met strict program rules. Since the waiver was implemented in October 2021, federal data shows PSLF approvals through June 2022 have climbed nearly 10%.
‘My repairman said I couldn’t’
Glass attended medical school at Penn State College of Medicine and graduated in 2004 with student debt of $192,000.
The PSLF program was established in 2007. Glass says that once he finished his training and started paying back, he asked his student loan officer how he could get on the right track to PSLF.
“My agent told me I couldn’t because my loans were the wrong type,” says Glass.
Glass had the Federal Family Education Loans Program, or FFELP, a loan program available to borrowers later replaced by Federal Direct Loans. FFELP loans are not eligible for loan forgiveness unless a borrower consolidates into a direct student loan.
Glass did not consolidate at the time because it already had low interest rates on its loans – 2.8% and 3% – and consolidating government loans with the government does not lead to lower interest rates. ‘interest. But consolidation would have served a different purpose.
“What my agent didn’t tell me was that I could have consolidated the right kind of loan and had a repayment plan that would make me eligible,” Glass says.
In October 2021, when the PSLF waiver debuted, Glass knew he would likely qualify; he had government loans that he had dutifully made payments on while employed for a non-profit organization the entire time. He turned to a Reddit community for waiver details and realized he needed to consolidate to qualify for the pardon.
“It was a bit nerve-wracking,” Glass says. “I had to make sure I wasn’t going to lose my good interest rate. Other than that, it wasn’t really hard to do.”
He applied for consolidation and submitted the PSLF waiver by the end of November 2021. His consolidation was complete in December 2021. In the new year, he was informed that his application had been received and his employment had been verified. However, he received a rejection letter in March, which he expected. The letter informed him that he had not made any qualifying payments. Nonetheless, Glass thought it was only a matter of time before it was approved.
“I knew it was pretty likely that I would hear something over the next few months that it would be something good,” Glass said.
He was right. On April 16, he received a letter confirming that he was approved for PSLF and his balance dropped to zero.
Glass says that not having the burden of debt weigh on him is a relief and he hopes it will pave the way for other career opportunities in the future.
“This job is very difficult, and I’d like to use a medical degree to do other kinds of things and not have to worry about student debt repayments,” Glass says. He also has four kids going to college and would like to help minimize their debts.
“It’s good to have him out of the way,” Glass says.
How to obtain the PSLF exemption
More than 146,000 borrowers have seen a collective $9 billion in debt forgiven thanks to the temporary waiver, according to federal data from June. The average balance discharged through the waiver is $61,408. If your employer qualifies you for the PSLF, you must apply even if previous payments have been declined.
But time is running out; the exemption will expire at the end of October.
The PSLF waiver counts past payments that were not previously eligible, including:
- Late payments.
- Payments less than total amount due.
- Payments made on the incorrect reimbursement plan.
- Payments made on loans that were not previously eligible, such as FFEL loans or Perkins loans.
- Payments not made during forbearance periods of 12 consecutive months or more.
- Months spent in adjournment, other than academic adjournment, before 2013.
Use the PSLF help tool to search for an eligible 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 step is essential: borrowers can submit a combined PSLF/employer certification form prior to consolidation, but they must consolidate to be eligible for the forgiveness.
To find out if you qualify for additional payments and to learn more about the waiver, log on to the federal student aid website. Then, be sure to apply before the waiver expires on October 31.