Government Loan Forgiveness

Are you fed up with making monthly payments for never-ending loans for federal employees? If you work in a federal, state, or local government department, there is a chance that you could get rid of your remaining debt. The Government Loan Forgiveness allows debtors to eliminate their debt, without any cap, in return of 120 qualifying payments. This program is available through the Public Service Loan Forgiveness. While forgiveness brings many benefits except canceling the debt, there is also the possibility of failure. Due to missing documents or ineligible payments, only a few people got forgiveness in 2019. Therefore, you need expert help to maximize the possibility of making it through. You have a shot for a debt-free future. Do not miss it.

What Makes Government Loan Forgiveness better?

The program has several advantages that supersede others out there. For instance, federal employee student loan forgiveness is not taxable. Some student aids are taxable, which requires applicants to pay additional income tax for the forgiven amount. This characteristic of financial assistance makes it prohibitive for debtors because some of them might not be able to pay extra taxes. However, with Government Loan Forgiveness, your income tax will not rise. Another advantage of the program is that you can get rid of all your remaining debt — other programs, such as Teacher Loan Forgiveness, offer up to $17.k forgiveness chance for five-year work. Yet, here you make only 120 payments and eliminate the rest. 

We should also mention that this program does not require payments to be consecutive. In the forgiveness program for teachers, they should work five successive years. If, for any reason, they leave the work, their efforts will be wasted. However, if you want to apply for this program, it is totally okay to have some work in history with non-qualifying employers. 

Lastly, this forgiveness plan allows both part-time and full-time government employees to benefit from financial assistance. If you work half-time, you can apply to this program if you serve more than one eligible employer. The only thing that matters is the total number of work hours, which should be equal to full-time position requirements.

Why Do You Need to Get Help?

As you already know, the Government Loan Forgiveness program is available to federal employees through the Public Service Loan Forgiveness plan. The PSLF is a great opportunity to avoid the student debt you got for education. Yet, it is complicated to be eligible and receive financial assistance. The success rate of this program is currently only 1%, with 1500 forgiveness receivers out of more than 100k applicants. People either do not understand the eligibility requirements clearly, or they make mistakes while collecting necessary documentation.

You make 120 payments to be eligible for this program. We do not want any applicant to lose their opportunity because of misunderstanding or mismanagement. One of the receivers of the PSLF program mentioned that forgiveness is available to people who have enough time to deal with it, rather than qualifying for it. You need to invest a lot of time to get all the documents and patience to manage the stress it brings. If you work full-time, you might not have the free time to spend with documentation issues. Therefore, Forget Student Debt aims to help you with detailed information of the programs and take the right steps. The way to a debtless future is full of barriers, and we want to be on your side to overcome all challenges. 

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Eligibility Criteria

There are many eligibility conditions that applicants should be aware of. But don’t be overwhelmed. If you are working for governmental service, you have a high chance of receiving financial assistance. In case you do not satisfy any other requirements, you can always adapt to them. If there are still questions, we are ready to guide you through each step and assist in getting over them. 

Work Requirements

As mentioned before, this program is available to employees of federal, state, or local governments. No matter your position type, you can be eligible for this federal employee student loan forgiveness. In other words, your workplace matters while the job description does not. 

Another requirement related to professional experience is work hours. Eligible candidates are full-time workers, but it needs additional explanation. First, there are two possible scenarios. You should either work a minimum of 30 hours per week or be a full-time employee, as defined in your organization’s regulations. The higher one counts. For instance, if your organization indicates the exact number of hours for full-time work as 40 hours per week, you should work 40 hours. Serving 30 hours will not make you eligible. 

Also, you can be a part-time government employee. However, then you need to find more than one job. The criteria for eligibility demands 30 hours of work per week from half-time employees. It means if you work in two different qualifying organizations for 15 hours, your total work hours will be equal to full-time requirements. In this case, you can apply to the program with peace in mind.

Criteria for Loan Type

Government Loan Forgiveness only works for some types of loans for federal employees. Not all debts qualify for forgiveness. The eligible loan types include Direct Loans. If you got a loan through the Perkins program or the Federal Family Education Loan, do not lose your hope. You can anytime consolidate your available debt into a Direct Loan and take advantage of this forgiveness program. However, do not forget that when you combine, only the payments after consolidation will count.

Qualifying Payments

In general, you should make 120 qualifying payments to be an eligible candidate for forgiveness. This factor is the most challenging requirement for applicants because it is one of the main reasons for failing applications. The simple word- qualifying- includes many details in itself. 

First, only the payments after October, 2007 are eligible for forgiveness. It means if you made payments before this period, they would not be considered for progress toward Government Loan Forgiveness. Considering that you pay the bill once a month, this process will take at least ten years to finalize. 

Other than the very long time required, your payments are eligible if you make them while working for a qualifying employee. In case you worked for a for-profit organization for some time, the payments you made during this period are not eligible. Also, during grace periods or deferment, you do not need to pay back the debt. Anyway, it will not matter for forgiveness. Besides, you should have an Income-Driven Repayment plan. If you return your debt with another repayment program such as the Graduated Repayment plan, it will not bring you points for this forgiveness. Additionally, your payments should be full and on time. Missing a payment or returning less than the monthly amount will not bring benefit and prolong your 120 repayment period.

Can I Become Eligible Faster?

Some people are impatient. They look for ways to shorten the minimum ten years period. They think if they overpay, it will bring them more points. However, the Government Loan Forgiveness program rewards you only with one point per monthly payment. The amount of the payment does not matter unless it is less than the billing amount. This strategy even can be disadvantageous as you won’t receive points for months that do not require repaying.

Application Process

If you have finally made 120 payments, you should apply for the Government Loan Forgiveness program. Please, keep in mind that even during the application period, you should be working for a qualifying employer, which is a federal, state, or local government organization. 

You need to fill out an application to officially declare your interest in getting financial assistance for student debt. Two ways exist to complete the form. First, you can get the use of the PSLF Help Tool, which we will describe in the following section in more detail. Alternatively, you can fill the form manually. You need to enter all the necessary details, print it, and sign. After the form is complete, you should send it to your FedLoan Servicer via mail or fax. You should also attach your Employment Certification. 

You will also receive notifications about the status of your application. If you get approval, then it will take a little time to eliminate your debt. Also, if you made more than 120 payments, then the extra amount will be refunded to you. In case of rejection, you will be notified about the reasons for failure. However, do not get demotivated. If some or all of your payments were ineligible, you could still get the advantage of the program. We will discuss this opportunity of Temporary Expanded Public Service Loan Forgiveness in subsequent sections. In all cases, you should also resume making payments according to your Master Promissory Note and retry in the future. 

PSLF Help Tool

This tool assists applicants in finalizing their applications smoothly. Mainly, it explains the details of the PSLF program. It also helps to assess whether your loan or employer qualifies for forgiveness. Lastly, it indicates which form of Public Service Loan Forgiveness you need to submit. This tool usually requires around 10 minutes or even less to complete the whole application. Please, keep in mind that when you open a session to fill the application, you cannot stop. Saving it and returning later is not possible here. Therefore, have all the needed documents by your side to complete the form in one session fast. After you fill the necessary information with the assistance of this tool, you should take the form to your employer. Your employer needs to sign it, so that you can send it to your FedLoan Servicer. 

What is an Employment Certification?

When the program officials noticed that many applicants made mistakes and misunderstood the requirements for payments, they started to look for ways to help debtors. The employment Certification form is one of those tools that guide applicants.  It allows debtors to keep track of their progress toward Government Loan Forgiveness.

The 120 payment period is quite long. Throughout this period, you can change your work several times. But how will you ensure that you make qualifying payments each month? It would be a nightmare to realize that your payments do not qualify during the application process. Therefore, you should fill the Employment Certification periodically. Then, you will receive a notification that indicates whether you are on the right path or not. In general, it is better to submit the form annually or when you change your workplace. 

If you do not want to deal with it and avoid other documentation processes, you might not fill the form. However, keep in mind that at the time of application, this form will be mandatory. When you apply to Government Loan Forgiveness, you need to submit a separate form for every employer you worked with. Therefore, we would advise you to fill it periodically. This way, your task will be much more comfortable at the time of application. Plus, you will be able to keep track of your progress towards the elimination of your debt. 

Expanded Plan for the Forgiveness

As we mentioned earlier, the extensive requirements of Government Loan Forgiveness almost make it impossible for applicants to take advantage of it. Therefore, in 2018 the government decided to give more opportunities to applicants by losing some conditions. Consequently, they created a Temporary Expanded PSLF program. This program is different from the initial version, allowing debtors to get forgiveness even if they made all 120 payments or some of them with ineligible repayment plans. Again, only Direct Loans will qualify for the Government Loan Forgiveness program. Additionally, keep in mind that other eligibility factors of the original PSLF apply to this program as well.

Additional Requirements

In the original version of the forgiveness program, only Income-Driven plans qualify. However, if you made payments with Extended Graduated Repayment plans, as well as Consolidation Standard and Graduated, then you can apply to the program. However, there is an additional requirement that did not exist before. If you apply for Government Forgiveness Loan through TEPSLF, your last payment and 12 months, prior payment should be at least in the amount equal to the requirement of the Income-Driven plan. This requirement might sound very confusing, but it is easy-to-understand. 

Let’s say you made payments with the Graduated Repayment plan. If you want to apply, you need to submit information such as your income or family size. In this way, the officials will calculate how much you would have owed under the Income-Driven plan. Then, they compare this hypothetical number with your actual last payment and payment you made 12 months before. If your payments are at least equal to the hypothetical amount, then you qualify for the program. 

You should also first apply to the PSLF before application to TEPSLF. After you get a rejection for the ineligibility of some or all payments, you can continue with the Temporary Expanded plan.

Apply for Student Loan Forgiveness Help

If you struggle with university student loan forgiveness, then you should get help with that. Because the employees in these agencies are dealing with the student loans every day and they have enough experience for solving different kinds of student loan problems.

Act Fast

The name of the program suggests you need to take necessary steps immediately to qualify for the program. It is a temporary program, which means, the government allocated some funds for this opportunity, and the program is available till all funds are distributed. Therefore, the system is based on a first-come, first-serve basis. Make sure you “act fast” in case your conditions satisfy the eligibility and enjoy the elimination of your debt. 

Also, if you get a notification that requires additional document upload, do it as soon as possible. You only have 21 days to submit the necessary information. If you miss the deadline, you will lose your chance to get forgiveness. 

Application Process

Distinct from the original PSLF, this program is relatively easy to apply. As you already submitted all your documents, you should only inform your FedLoan Servicer that you want to apply. Then they will direct your request to the U.S Department of Education. When you write an email to FedLoan Servicer, add your birthday and use the same name as you did before. If you receive approval, you will eliminate all your debt. In case you receive a rejection, resume your payments as before. You can try your chance again in the future for PSLF or TEPSLF.

Is It Worth to Apply?

When people first heard about the Government Loan Forgiveness program, it looked like an incredible opportunity. After all, it offered a chance to eliminate all their debt. Plus, this forgiveness program had some excellent points such as non-taxable income, no following payment requirement, no cap for forgiveness, etc. However, when people saw the results of applications in 2019, they became disappointed. Only 1% of the applicants could get forgiveness successfully. Therefore, the question of whether it is worth applying for the program or not started concerning debtors.

While we cannot reject the fact that there are low levels of success probability, the federal employee student loan forgiveness is worth applying for. The reasons for its failure were mostly due to the ineligible payments and missing documents. If we consider that qualifying payments are made after 2007 and ten years are needed, it is understandable why only a few people have 120 eligible payments. More and more people will qualify for the program as the years pass. For now, it is challenging to find debtors whose ten years payments fit all the requirements. 

On the other hand, missing documents or improper documentation is the result of misunderstandings. That is the primary mission of Forget Student Debt to help such people and empower others to take the right steps. With Forget Student Debt by your side, you should not worry about technical mistakes to happen during the application process. We will guide you through the whole process with the help of experts in this field. Therefore, do not lose your motivation to apply for Government Loan Forgiveness. Though there exist some challenges, there are also solutions to them. 

Budget Plans for 2020

The Trump Administration proposed the elimination of the Public Service Loan Forgiveness for the 2020 year budget plan. As Government Loan Forgiveness is a part of this program, it means federal employees can also lose their chance to get rid of their debts. However, we think there is still no need to start worrying. During the previous years’ budget plans, Trump Administration proposed the same cancellation several times. However, their proposal was not accepted. Yet, if you want to ensure the benefit, we would advise you to act as fast as possible. If you qualify for the program, take the necessary steps, and send your application. Alternatively, this is applicable to Temporary Expanded PSLF as funds can end at any time. You can also contact Forget Student Debt to get familiar with the program and requirements. In this way, you can hasten the process and increase your chance.  

Final Words

Debtors in federal, state, and local government organizations can get rid of their loans for federal employees. This opportunity is available to debtors via the PSLF. The requirements for this forgiveness are extensive. Except for your workplace, you need to have qualifying loans, repayment plans, and working hours. Plus, you should make 120 payments before you apply to the Government Loan Forgiveness program. If you get an approval, your entire remaining debt amount will be eliminated. In case of rejection, you can try your chance with the Temporary Expanded Public Service Loan Forgiveness program. Additionally, you can resume payments and try to take advantage of forgiveness again in the future. Also, this program has a very low success rate. Therefore, it is advisable to get expert help to maximize your chance. Let Forget Student Debt accompany you throughout the whole process and improve the probability of a debt-free future.