7 Facts You Should Know About Student Loan Forgiveness Programs
It may be easier to get rid of your student loans than you ever thought possible!
In most cases, city fire departments do not require education beyond a high school diploma or GED. However, if you want to advance or have a goal to become chief, you may need a higher education .
But there’s a catch. The debt you incur for a degree can easily outstrip the income you receive as a firefighter. Even with the income boost of a higher education, you can struggle to pay off your debt. Student loan payments can keep you living paycheck to paycheck. Meanwhile. the debt prevents you from accomplishing other life goals, like homeownership.
Fact: The 2017 salary range for firefighters ranges from $33,528 to $55,879, according to Salary.com.
Fact: 68% of for-profit and nonprofit college graduates have student loan debt, with an average balance of $30,100*
The Department of Education designed federal student loans so its easy to qualify. Qualification is not based on your credit; it’s based need. But that means your debt-to-income ratio does not factor in during loan approval.
So, unlike a regular loan, you can get a federal student loan even if you don’t (and won’t) have the income to pay it back. Given the current cost of tuition and attending school, you simply may not make enough money to repay your loans.
That’s especially true for anyone who works in the public service sector, like a firefighter. Cities and municipalities usually employ firefighters, so the income can be modest. You don’t do what you do for a huge paycheck.
Still, that’s a problem if you took out student loans to advance your career as a firefighter. Luckily, Public Service Loan Forgiveness (PSLF) offers a solution to help you get out from under your student loan debt burden.
Qualification for PSLF is not immediate. You have to take a number of steps first. If you start now and follow the steps below, you would be eligible for loan forgiveness in 10 years.
As you can see from the instructions above, qualifying for loan forgiveness all depends on maintaining eligibility. You must meet the qualification for forgiveness throughout the ten years of repayment. This can be challenging.
Employment certification is not a requirement to qualify for forgiveness through PSLF. However, the Department of Education through StudentAid.gov recommends getting certified early and maintaining it. It’s the only way to affirm you can earn forgiveness in 10 years.
People often think Public Service Loan Forgiveness is Obama Student Loan Forgiveness. In fact, the Department of Education created and implemented PSLF under George W. Bush. The program started back in 2007.
Interestingly enough, that means the first loans the first participants in PSLF only became eligible for forgiveness in October 2017. That’s when the first borrowers potentially completed their 120 qualified payments on a hardship-based repayment plan. If you’ve been a firefighter since 2007 or 2008 and have been working to meet all your eligibility requirements, then you’re probably hoping to see your remaining balances forgiven soon.
But unfortunately, there’s no guarantee that everyone who thinks they qualify for PSLF will be successful. According to a recent report from the Department of Education, 99% of all applications received since October 2017 have been rejected. of the 29,000 applications processed, only 292 were approved. The others were rejected due to incomplete paperwork or often a failure to meet qualification requirements. So basically, many borrowers are getting to the end of their 10-year repayment period only to fail at securing forgiveness on the remaining balances.
The Department of Education says one-third of the applications were incomplete; so basically the paperwork wasn’t filed completely or properly. But the other two-thirds were rejected because the borrower didn’t meet all the requirements for qualification. Some borrowers didn’t have the right types of loans. Others weren’t enrolled in the right repayment plan. And still others have found that their employment didn’t qualify for them for forgiveness.
The last reason is the most contentious. During the Obama administration, the DOE expanded the PSLF program to cover more people in more types of jobs. But the current administration has scaled back. Even people that took the step of maintaining ongoing Employment Certification have found that a position that was certified no longer qualifies.
This means that if you’re working to meet the requirements for PSLF, you need to take the following steps to ensure you qualify:
Finally, consider talking to a student debt resolution specialist. Don’t rely on your loan servicer to give you the information you need. They’re notoriously bad at providing information necessary to borrowers. Instead, you need an independent third party that can act as your advocate. They have your best interest at heart, so they’ll make sure you meet the qualification standards necessary to qualify for forgiveness.
Article last modified on May 7, 2019. Published by Debt.com, LLC