Did You Get a Student Loan Forgiveness Letter? Don’t Get Excited Just Yet
Has the U.S. Department of Education ever heard of the phrase “no take-backs?”
It doesn’t seem so.
Those affected were already told their loans would be forgiven after working public sector jobs for 10 years and had passed on potentially lucrative private sector jobs.
Student Loan Forgiveness Approval Letters May Be Invalid
To qualify for the program (which Congress approved back in 2007), these teachers, firefighters, nonprofit workers and others in the public sector had to have their specific employers deemed eligible each year by the program administrator, FedLoan Servicing.
Yet the Department of Education claims approval from FedLoan “does not reflect a final agency action on the borrower’s qualifications.”
FedLoan approved Jamie Rudert’s employer in 2012 and subsequent years, only to send a denial letter in 2016 telling him all prior approval was done in error.
“It’s been really perplexing,” he told the Times. “I’ve never gotten a straight answer or an explanation from FedLoan about what happened, and the Department of Education isn’t willing to provide any information.”
Rudert graduated law school with nearly $135,000 in debt and said he would have chosen a different employer had he known he wouldn’t qualify for the program, according to the paper.
The American Bar Association, Rudert and three other borrowers affected by this conundrum filed a suit in the U.S. District Court against the education department in December.
This lawsuit comes right on the cusp of the first round of potential beneficiaries completing their 10 years of service. Those borrowers will be able to apply to have their student loan balance forgiven in October.
Representatives from FedLoan and the education department both declined to comment on the Times report.
How to Pay Down Your Own Student Loan Debt
Though student loan debt may be a beast that can follow you until the day you die (especially when promises to clear your debt are denied), all is not lost.
You can take a cue from these people who came up with out-of-the-ordinary ways to pay it down.
Refinancing is another way to potentially save thousands, like these graduates did. Loan refinancing marketplace Credible can help you pay off your student loans with a personal loan that could save you money in interest, monthly payments or both.
And if you face financial hardship and have to take a temporary break paying back privately-held, government backed loans, there’s some good news.
Loan guaranty agencies have announced they are dismissing the education department’s allowance to charge default fees to borrowers — as long as they continue repaying after 60 days, according to an article by Bloomberg.
“Many student loan borrowers already have a difficult time managing their loan obligations,” James Patterson, CEO of Texas Guaranteed Student Loan Corp., told Bloomberg. “Adding more fees does not help their situation.”
Finally, someone who understands.
Your Turn: Did you take a government or nonprofit job hoping to have your student loans forgiven?
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Nicole Dow is a staff writer at The Penny Hoarder.
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