Public Service Loan: Forgiveness The Struggle to Qualify is Real

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by Kyra Hahn on October 13, 2017

KYRA HAHN is a Librarian at Douglas County (CO) Libraries. Contact Kyra at khahn@dclibraries.org. Kyra is currently reading March: Book One by John Lewis and Andrew Aydin.

I often call public libraries the “people’s university” because as an institution, we serve anyone who comes through our doors with an interest in learning. The public library is a welcoming community space for people of all ages to gather, connect with one another, tinker and try new things, and cultivate new ideas. Whether people come to visit for business networking meetings, looking for research materials for school projects, grabbing popular movies, or learning how to download or stream digital media content, it’s hard to walk out of a library without learning something new. We are the place that curious people come to for answers. It’s part of the reason I love working as a public service librarian. Librarians share in the opportunity to be challenged to learn something new from our patrons and collections every day. Staff at libraries are expected to be well educated to help find answers to the myriad questions we encounter daily. Many staff members hold bachelor’s degrees, and librarians and professional staff usually have master’s degrees as well. Public libraries are doing a good job of living up to public perceptions and expectations. An ALA survey found that “90 percent believe that libraries are places of opportunity for education, self-help and offer free access to all.”¹ This broad knowledge base required of library staff comes at a cost: The high cost of a college education.

Since higher education has become so unaffordable for so many, student loan debt has become a common problem. Forbes reports that

student loan debt is now the second highest consumer debt category—behind only mortgage debt—and higher than both credit cards and auto loans. According to [the website] Make Lemonade, there are more than 44 million borrowers with $1.3 trillion in student loan debt in the U.S. alone. The average student in the [c]lass of 2016 has $37,172 in student loan debt.²

Student loan debt, exempt from many consumer protections and bankruptcy, has the power to impact multiple generations, from Generation X to Millennials and even Baby Boomers. Baby Boomers may be impacted by serving as a co-signer on a family member’s educational debt or as a career changer learning new skills for themselves. According to U.S. News & World Report, “in the first quarter of 2012, about 2.2 million people 60 years and older held student loans.”³ Generation X may still be paying o their own student loans as they prepare to send their kids o to college, taking on “an additional average of $22,000 per household,” according to LendEDU.⁴ Millennials are finishing college with limited job prospects and high educational loan debt, and are working multiple part-time jobs to pay their bills. If they’re still living at home with parents, there is now the prospect of multiple people living within the same household being impacted by student loan debt.

We’ve bought into the notion of a college degree being necessary to attain a career and an economically secure life. In some cases, we enter careers and find out more schooling is needed to earn promotions. Have we chosen to educate ourselves by any cost necessary? When we accept student loans, are we aware that we are signing up for ten to thirty years of nearly inescapable debt that offers no consumer protections including bankruptcy? Student loan debt is the new shared experience that we generally don’t talk about.

I first heard about the Public Service Loan Forgiveness (PSLF) program during a conversation with a coworker in 2009. The conversation made me curious to learn more about the program, and hopeful that I might pay o my educational loans before retirement. How many of my colleagues know about the Public Service Loan Forgiveness program? How many people will qualify for Public Service Loan Forgiveness? Each question made me more curious than before. In Rising Strong, Brené Brown notes that “curiosity and knowledge-building grow together—the more we know, the more we want to know.”⁵ And what better place to satisfy curiosity than the library? Libraries are places of education and collectors of stories. This makes public libraries the ideal place to begin the dialogue, to share our stories, including the struggles and failures, to help in facilitating shared learning. It’s time we begin to discuss student loan debt more openly, and its impacts on our lives.

As Brown says, “curiosity is uncomfortable. … But that’s okay. Sometimes we have to rumble with the story to find the truth.”⁶ I’ve chosen to share the story of my struggle to qualify for the Public Service Loan Forgiveness program in hopes of increasing awareness of this program and passing along information to help with making the qualification process easier for others. In searching for the truth, my hope is that we collectively advocate for successful outcomes with the Public Service Loan Forgiveness program, getting portions of student loan debt forgiven for staff in libraries. There are over 16,500 public libraries in the United States,⁷ which employ more than 136,000 people full time.⁸ If we expand this beyond public libraries to include all types of libraries, according to the Bureau of Labor Statistics, as of 2016, over 6,460,000 people work in public service education, training, and library positions.⁹ Every full-time staff member working in public library organizations with student loans potentially qualifies to participate in this program! The impact on our profession was a significant motivator for me to take some action. This quote from ultramarathon runner and author Danny Dreyer inspired me to go beyond my comfort zone: “I look at struggle as an opportunity to grow. True struggle happens when you can sense what is not working for you and you’re willing to take the appropriate action to correct the situation. Those who accomplish change are willing to engage the struggle.”¹⁰

What is the Public Service Loan Forgiveness (PSLF) program? The program was created as a part of the College Cost Reduction and Access Act of 2007/Public Law 110-84. Passed in September 2007, the Act “redirects taxpayer subsidies away from student loan companies and toward increased grant aid and improved benefits for borrowers.”¹¹ Key provisions include Pell grant increases, income-based repayment, interest rate cuts, and Public Service Loan Forgiveness.¹² The basic requirements of the PSLF program are:

You work full-time in a qualifying 501(c)(3) public service organization (30+ hours/week)
Your student loans are Direct Loans (non-qualifying loans may be consolidated into a Direct Loan)
You make 120 payments, on a qualifying repayment plan (income-driven repayment plans, namely, REPAYE, PAYE, IBR, or ICR)

With these requirements fulfilled, the remaining outstanding balance of loans will be forgiven.¹³ This process sounds easy enough, yet I encountered unexpected challenges when trying to qualify for participation in PSLF. I met these challenges when modi cations to the qualification process occurred and weren’t communicated well to borrowers by loan servicers. Specific examples regarding changes to the qualification process include requirements for being on income-driven repayment plans and submission of employment certification forms. The introduction of both income-driven repayment plans and employment certification forms occurred after the introduction of the program in 2007. According to an annual report from Federal Student Aid in 2010,

Interest in PSLF is one reason for additional loan consolidation inquiries. Effective July 1, 2009, the Income Based Repayment Plan enabled borrowers to establish monthly payments based on adjusted gross income, family size, and debt amount. The new option is important to borrowers with repayment challenges and has also been linked to PSLF.¹⁴

The employment certification form was introduced later in 2013 to verify that you are working in a qualifying organization and to track progress on the 120-payment requirement for PSLF.

My story begins in 2010, when I began earnest efforts to enroll in PSLF. I successfully consolidated my student loans with Direct Loans in 2010. The loans were assigned to a loan servicer and my payments resumed. Between 2010 and 2013, my loan servicing company changed several times, finally landing on FedLoans. When FedLoans became the loan servicer, I received correspondence saying I needed to change repayment plans to qualify for PSLF. This prompted me to call FedLoans, ask questions, and request to be put on an income-based repayment plan.

Imagine how upsetting it was to learn about a new program requirement! Previous loan servicers failed to advise of this income-based repayment plan requirement. When the new loan repayment plan details arrived in the mail and I saw the increased monthly payment, I had to call FedLoans again and ask to be placed back onto the extended repayment plan (a non-qualifying PLSF repayment plan) because I couldn’t afford the new income-based monthly payment. This cycle of calling FedLoans to request being placed onto an income-based repayment plan and receiving new loan repayment terms with monthly payments that were too high occurred several more times between 2014 and 2016. My working theory for student loan payment miscalculations involves marital status and tax ling. If you are married and ling a joint tax return, they may base loan payments calculations on your combined income but not correctly factor in student loans your spouse may hold and/ or the income disparity between spouses. Each time you request a repayment plan change, the loan servicer puts your loan into forbearance status while they figure out new loan terms. This meant that each time repayment plan changes were re- quested, the monthly payment increased due to interest calculations. Each time I would call FedLoans, I would get different answers from customer service representatives regarding qualifying for PSLF.

The final attempt to get onto a qualifying income-based repayment plan occurred in 2016. I heard about some changes introduced by the Obama administration regarding income-based repayment plans and figured I would try again. I called FedLoans after receiving new income-based repayment plan terms via email with monthly payments that were over $1,000 per month. My student loan payments were set up on auto-debit from my checking account and I immediately asked FedLoans to stop the auto-debit and avert a personal economic crisis! During this call, I asked to speak to a supervisor, who put me back into forbearance status and advised me to submit a paper application for an income-based repayment plan and supporting documents for manual processing. In preparing the paper application submission for an income-based repayment plan, I discovered significant discrepancies between FedLoans’s payment calculators and Federal Student Aid’s repayment estimator. I spelled out everything in detail, as if I were working with someone unfamiliar with income-based repayment plan application processing. This included submitting screen shots of both payment calculators and advising them that my spouse does not work in public service and does not qualify to participate in the PSLF program. In August of 2016, I was placed on a qualifying income-based repayment plan. The difference between my monthly payments on the non-qualifying extended repayment plan and the PSLF-qualifying REPAYE plan was only $5.

This observation set off a new round of frustration, since none of the loan payments made between 2010 and 2016 were counted toward the 120-payment program requirement. I have consistently worked in public libraries since 2005 and have made every attempt to comply with PSLF program requirements. I felt like a psychological contract had been broken. In my opinion, student loan debt feels like a new system of peonage to the US Department of Education, with private loan servicers holding too much power over a government program. When I’ve tried complaining to FedLoans, I’ve been told that I need a lawyer to subpoena transcripts of phone calls related to my account. My earliest eligibility date for loan forgiveness is currently estimated to be in 2026, since FedLoans is only counting payments from 2016 onward. My qualification for PSLF will be contingent on remaining on an income-based repayment plan and continuing to send in employment certification forms, for payment tracking. While submitting this form isn’t required, you won’t know how many of your payments are counting towards program requirements. On Federal Student Aid’s website, it says,

If you want to qualify for Public Service Loan Forgiveness now or in the future, complete and submit the Employment Certification form as soon as possible. Too many borrowers wait to submit this important form until they have been in repayment for several years, at which point they learn that they have not been making qualifying payments. In order to ensure you’re on track to receive forgiveness, you should continue to submit this form both annually and every time you switch employers.¹⁵

I channeled my frustration into advocacy, beginning with my employer, by asking for permission to do a voluntary, anonymous staff survey to gauge awareness of the PSLF program. I performed this survey in September 2016 using Survey Monkey and the results confirmed that nearly 50 percent of staff were unaware of the PSLF program. The survey verified that staff were unaware of changes to income-based repayment plans made in 2015. Upon reporting survey results to our Human Resources director, I was granted permission to share PSLF program information with staff through visits to staff meetings and placing links to Federal Student Aid’s PSLF program information webpage on our employee portal. In 2015, the Obama administration passed additional programs to assist with student loan debt, called the Revised Pay As You Earn (REPAYE) Plan, offering broader access to income-based repayment plans and help to make student loan repayment plans more affordable for consumers. If you previously failed to qualify for income-based repayment plans before 2015, you may want to consider trying again to see if you qualify under REPAYE. According to NerdWallet.com, REPAYE allows grads of all income levels to participate, your eligibility no longer depends on the year you borrowed, your loans will be forgiven after twenty-five years, and the government will pay more of the accrued interest on your loans.¹⁶ Talking with your human resources department is a great way to start raising awareness of PSLF among staff, especially since it may complement tuition assistance or other benefits already offered.

If you find the need to file complaints against your loan servicer, there are new tools available to consumers. The Consumer Financial Protection Bureau (CFPB) offers an online complaint reporting tool, which assigns a tracking number for your case. The CFPB has reported an increase in complaints regarding student loans and PSLF, to the point where they produced their own marketing materials regarding PSLF, such as “Certify Your Service: Guides to Public Service Loan Forgiveness.”¹⁷ The agency also produces a midyear report documenting reported problems from consumers regarding
loan servicing. The reported problems include incorrect or insufficient information from servicers, processing delays and errors that cause borrowers to miss out on qualified payments, and job certification problems.¹⁸ More could be done to help protect student loan borrowers since the power balance strongly favors loan servicers. As news related to the CFPB’s lawsuit against student loan servicer Navient revealed, “there is no expectation that the servicer will act in the interest of the consumer. … Its job is not to help its debt holders, rather it is to get its creditors—in this case the U.S. Department of Education—paid.”¹⁹

Eligibility for PSLF is set to begin in October 2017, pending the creation of the Application for Forgiveness by the Office of Student Aid. Based on research findings with the late introduction of income-based repayment plans in 2009 and employment certification forms for payment tracking in 2012, I anticipate low early qualification rates for actual loan balance forgiveness. I’m basing this assessment on FedLoans’s Public Service Loan Forgiveness Employment Certification Forms Report, which shows a total of only 661,598 borrowers qualifying for PSLF from 2012 through early 2017.²⁰

Since employment certification forms aren’t technically required, it will be interesting to see what happens when borrowers begin submitting them for final loan forgiveness. Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, wrote a letter to the Education Secretary expressing concern that “many more borrowers should be qualifying for loan forgiveness, but administrative issues are creating obstacles. If the data reveal a likely large underutilization of this public benefit, steps should be taken now to help remedy this situation before October 2017.”²¹

There is a strong need for public libraries and ALA to get involved in advocacy related to PSLF. This program offers the potential to positively impact more than 136,000 public library workers within the United States by offering economic relief from student loan debt.22 If we are able to help members of our profession successfully see PSLF through to fruition, then the struggle will be worth it!

References

American Library Association, “ALA Library Fact Sheet Number 6: Public Library Use,” Mar. 2006, accessed Aug. 1, 2017, .
Zack Friedman, “Student Loan Debt in 2017: A $1.3 Trillion Crisis,” Forbes.com, Feb. 21, 2017, accessed July 28, 2017, .
Equal Justice Works, “Student Loan Debt Affects Generations of Americans,” U.S. News and World Report, Oct. 23, 2012, accessed July 29, 2017.
Je Gitlen, “The Impact of Student Loans on Your Parents,” LendEDU, Jan. 19, 2017, accessed July 29, 2017.
Brené Brown, Rising Strong (New York: Spiegel & Grau, 2015), 55.
Ibid., 54.
“ALA Library Fact Sheet 1: Number of Libraries in the United States,” American Library Association, last updated Sept. 2015, accessed July 26, 2017.
“ALA Library Fact Sheet 2: Number Employed in Libraries,” American Library Association, last updated Apr. 2015, accessed July 26, 2017.
“May 2016 National Occupational Employment and Wage Estimates by Ownership: Federal, State, and Local Government, Including Government-Owned Schools and Hospitals and the U.S. Postal Service,” United States Department of Labor Bureau of Labor Statistics, Occupational Employment Statistics, last modified Mar. 31, 2017, accessed Aug. 1, 2017.
“Struggle Sayings and Quotes,” Wise Old Sayings, accessed Aug. 2, 2017.
“The College Cost Reduction and Access Act,” The Institute for College Access & Success, accessed July 30, 2017.
Ibid.
“Public Service Loan Forgiveness,” U.S. Department of Education Federal Student Aid, accessed July 28, 2017. U.S. Department of Education Federal Student Aid, “Annual Report 2010,” accessed July 23, 2017, 62.
“Public Service Loan Forgiveness,” U.S. Department of Education Federal Student Aid, accessed July 28, 2017.
Brianna McGurran, “5 Facts About REPAYE, the Newest Student Loan Repayment Plan,” NerdWallet, Dec. 17, 2015, accessed July 22, 2017.
Seth Frotman, “Certify Your Service: Guides to Public Service Loan Forgiveness,” Consumer Financial Protection Bureau, June 22, 2017, accessed July 23, 2017.
“CFPB Spotlights Borrower Complaints about Student Loan Servicers Mishandling Public Service Loan Forgiveness Program,” Consumer Financial Protection Bureau, June 22, 2017, accessed July 23, 2017.
“Student Loan Giant Navient on Suit: ‘No Expectation’ It Will Act in ‘Interest of the Consumer,’” Fox News, Apr. 3, 2017, accessed Aug. 3, 2017, .
“Loan Forgiveness Reports,” U.S. Department of Education Federal Student Aid, accessed July 27, 2017, .
Andrew Kreighbaum, “Program Without Participants,” Inside Higher Ed, Nov. 22, 2016, accessed Aug. 3, 2017.
“ALA Library Fact Sheet 2: Number Employed in Libraries.”