How this 36-year-old got $ 167,000 in student loan debt canceled

Were you eligible for a loan forgiveness under the Ministry of Education’s temporary waiver? Email Financial Journalist Alicia Adamczyk for the chance to be featured in an upcoming story.

Most mornings, Christopher Handley diligently logged into his FedLoans account to check how much of his $ 167,000 student loan balance was left in college and law school. He had recently made the necessary 120 payments on time and submitted his pardon request, and was eagerly awaiting his balance reset.

But one day in early November, the 36-year-old deputy prosecutor skipped his routine. He felt discouraged by the Public service loan discount (PSLF) process and couldn’t bear to see the six-digit account number staring at him again when he was certain he should have been forgiven already.

Handley’s initial application was rejected without explanation, although he met all the conditions: in addition to the 10 years of monthly payments, he consolidated his loans into an income-based repayment plan the month after he graduated. from law school, and held the same qualifying job throughout his career.

Frustrated, he resubmitted it and had been waiting for weeks without an official update. A bottle of champagne that he and his wife had planned to drink to celebrate has not been opened.

However, when the Texas resident arrived for work at the Harris County Attorney’s Office that day in November, he checked the Subtitle PSLF, which had become a kind of support group for him over the past few years. His heart began to beat faster as he read the latest messages: Several users reported that their loans were eventually canceled. Could this also be his lucky day?

“There you go, the long nightmare was over,” Handley told CNBC Make It. He logged into his account and, with “excited disbelief,” saw a remaining $ 0 balance, saving him over $ 1,000 each month in loan payments.

This weekend, he and his wife finally blew up the champagne.

Changes to the PSLF program benefit borrowers

Besides Handley, tens of thousands of other officials have seen their debt forgiven in recent weeks as President Joe Biden’s Education Department has made concerted efforts to improve the federal loan cancellation program.

PSLF promises to wipe out remaining federal government student loan debt after making 120 qualifying payments while working for a United States federal, state, local, or tribal government, or nonprofit organization. It is a noble goal, but one that has been hampered by bureaucratic mismanagement and poor communication in recent years, causing frustration for hundreds of thousands of workers across the country.

To address this, the Department of Education made some temporary changes to the curriculum in October, including offer a dispensation count retroactively FFEL, or federal family education loans, toward the 120 payments needed for forgiveness; count any previous payments made as eligible for the 120 needed as long as the borrower has a direct loan; and automatically certify the employment of federal and military employees.

The intention is to help officials who may have been deceived or did not know the more technical rules of the program.

In the weeks that followed, tens of thousands of government officials logged into their loan accounts to find balances of $ 0. Since the FFEL waiver alone was announced in October, about 30,000 borrowers have received about $ 2 billion in relief, according to a spokesperson for the Ministry of Education. They did not say how many other borrowers received a discount during the same period.

Don’t give up forgiveness

Even with the changes, the cancellation of a loan balance by the Department of Education can still be complicated and time consuming for borrowers. Handley did not need the waiver to be eligible for the pardon, but his process also came with the headaches for which the program is known.

Over the years, Handley feared the program would be closed or changed due to political pressure. And then there was a long wait of a month and a half between submitting her pardon request, refusing, and finally logging in to find her $ 0 balance. Calls to FedLoans often left him more confused about the status of his request than he had been before he made them.

“The frustration at work is that I’m used to going into court and getting things done,” Handley says. With the loan forgiveness process, “it’s a black box where you just send forms to government employees” and hope for the best.

In the end, Handley took care of everything. If there’s one thing he wants borrowers to understand, it’s not to give up on forgiveness, even if it takes weeks or months to work out. Perseverance, literally, pays off.

“The biggest detriment is telling people not to bother. It is definitely worth doing it,” he says. “Do your papers, apply and get this money. “

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