By now, you’ve probably saw that only 96 public service employees had gotten student loan forgiveness under the PSLF program.
The reasons for that low forgiveness number are many. According to a report released by the Department of Education, over 28 thousand people applied for forgiveness. Most people were rejected for not meeting one of the program’s many requirements. (More on those requirements below.) The rest submitted incomplete applications.
But still others allege that their servicer, specifically Navient, blocked them from accessing the federal student loan forgiveness program for public workers.
Last week, 8 teachers, with the financial backing of the American Federation of Teachers, sued Navient.
Navient, as a servicer of federal student loans, is supposed to guide people through these many requirements.
But, according to the teachers, Navient failed to do that.
Instead, Navient’s representatives gave them bad information about loan forgiveness. It also discouraged them from taking steps to qualify for the program.
After reading over the entire 117 page lawsuit, here are 3 things I think you should know.
1. The teachers in the Navient Student Loan Lawsuit seek to become a class action
In the lawsuit, the teachers seek to become representatives of a class action. Here are a few of the classes of people they propose to represent:
- All borrowers with FFEL or Direct Loans serviced by Navient, who are employed full-time by a qualifying public service employer, and who were contacted by Navient about their eligibility for PSLF;
- All borrowers who lived in or took out FFEL or Direct Loans in Maryland, Florida, New York, or California, had those loans serviced by Navient, been employed full-time by a qualifying public service employer, and were contacted by Navient about their eligibility for PSLF.
Basically, the teachers want to represent every public service employee with federal student loans Navient services. Of course, that may include you.
2. You likely won’t get credit towards forgiveness
The common complaint each of the 8 teachers has is that they lost out on months they may have earned towards forgiveness. One would think the easiest way to remedy that is to credit the teachers for those lost months. But that probably won’t happen.
Instead, if they win, the teachers will likely get some type of monetary compensation for any damage Navient caused them. On top of that, Navient may have to pay a fine.
But to credit the teachers and all other borrowers with months towards forgiveness?
I just don’t see that happening.
It seems too complicated of a task, filled with too many conditions, that render that option untenable.
What’s more realistic, in my opinion, is for you to receive a check for a few dollars, several years from now, for any harm you suffered.
3. You need to protect yourself by completing all student loan forgiveness paperwork
The teachers in this class action lawsuit all have one thing in common:
They trusted their student loan servicer.
Yes, you should be able to trust your servicer. But you’re ultimately the one who’s either going to get loan forgiveness or be stuck with them longer then you should.
The smart thing to do, in my opinion, is to complete the student loan forgiveness paperwork annually. Don’t listen to your servicer if they tell you that you don’t have to complete that form. Yes, that’s technically true, you don’t have to submit that form. But you should. It’s your record. Your evidence.
Also, because you’re working towards getting your loans forgiven, you should do try and get the lowest monthly payment you can get under an income driven repayment plan. Why pay more than you should if it’s all going to get forgiven anyway?
What is public service loan forgiveness
The PSLF program provides eligible federal student loan borrowers with loan forgiveness on the remaining balance of their Direct Loans after they’ve met program requirements.
All types of Direct Loans are eligible for forgiveness, including:
- Direct Subsidized and Unsubsidized Loans;
- Direct Graduate Plus Loans; and
- Direct Consolidation Loans.
Parent Plus loans are also eligible for forgiveness if you consolidate them into a Direct Consolidation Loan. This step is necessary because Parent Plus loans aren’t eligible for any of the income-driven repayment plans.
How to qualify for loan forgiveness
The Public Service Loan Forgiveness has 5 basic requirements:
- You must have Direct Loans
- You must work full-time
- You must work full-time for the government or qualified nonprofit
- You must pay your loans under a qualified repayment plan (any income driven repayment plan will do); and
- You must make 120 timely-monthly payments (the payments don’t have to be consecutive.
Where do I get the PSLF Certification form
You can download the public loan forgiveness form here.
While not required, you should probably submit the Public Service Loan Forgiveness employment certification form annually.
Doing this two things. First, it creates a paper trail, which serves as evidence of your efforts to get your loans forgiven. Second, it serves as a receipt that worked full-time for a qualified employer during that year.
Here’s a flow-chart of the process that occurs after you submit the employment form: