Is Public Service Loan Forgiveness Right for You? Borrowers Share Their PSLF Stories

 December 29, 2019
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The Public Service Loan Forgiveness (PSLF) program, first introduced in 2007, promises to forgive your federal student loans after 10 years of working in — you guessed it — public service. But when the first borrowers became eligible in 2017 to have their loan balances wiped away, many had their applications rejected.

According to the Department of Education, most applicants didn’t meet the eligibility requirements. But critics of the program accuse the government of unfairly changing its criteria to disqualify borrowers, with the American Federation of Teachers union now suing the government for “unwarranted denials of loan forgiveness.”

Amid the controversy over this program, we wanted to ask student loan borrowers how confident they feel about receiving PSLF, given that only 1% of applicants have been approved so far. Here are three PSLF stories from borrowers who agreed to share their experiences seeking public service loan forgiveness:

1. Pursuing PSLF for graduate school loans
2. Hoping to cancel $30,000 in student debt
3. Giving up on PSLF to pay off loans faster

1. Pursuing PSLF for graduate school loans

Although Benjamin Tingey finished his undergrad studies at Brigham Young University without debt, he had to take on $122,000 in student loans to attend graduate school at George Washington University. Since receiving his degree, his debt has ballooned to $150,000. But if everything goes to plan, he’ll get this balance forgiven through the PSLF program.

“My current employer is a large not-for-profit healthcare system based in Charlotte, North Carolina,” Tingey said. “I’ve deliberately chosen to stay in [not-for-profit] healthcare rather than pursue more lucrative opportunities, like consulting or technology.”

To stay eligible for PSLF, Tingey was comfortable with this career trade-off. But he’s grown increasingly concerned about the future of the program.

“About five years into the program, I have a growing unease about the possibility that I’ll wake up one day and the program has been defunded,” Tingey said. “I’ve written to my representatives, encouraging them to support the What You Can Do For Your Country Act, which strengthens the protections for PSLF and does much to ease the financial burden.”

To remain eligible for PSLF, Tingey put his loans on income-driven repayment, which lowered his monthly payment to $160. While this adjusted payment is easier on his budget, Tingey knows he’d be in a tough spot if PSLF were to disappear.

“If Congress were to defund the program or otherwise scrap it, I would have spent the last five years hardly making a dent in my total balance,” he said.

Since he’s five years into his public service career, Tingey plans to stay the course and keep working toward forgiveness. But, he says, the higher education system needs to be reformed to prevent future generations of students from becoming so burdened with debt.

“Higher education is obscenely expensive,” Tingey said. “I don’t blame my school for being expensive. … The blame goes to the higher education system. It’s utterly broken and overvalued.”

2. Hoping to cancel $30,000 in student debt

Having worked in non-profits for the past several years — most recently as the director of a rapid rehousing program for survivors of domestic violence — student loan borrower Alyssa Keil is also on track to receive loan forgiveness through PSLF. Compared to Tingey, she’s more optimistic that this debt cancellation will eventually come through.

“I feel like I’ve always been well aware of the process, so I’m confident that if my full-time job remains in the nonprofit sector, I will receive forgiveness,” Keil said.

In fact, her work as a financial coach and founder of FinanciAlly, where she helps other people who also work in nonprofits, has taught her a lot about what she herself needs to do to remain eligible.

“Since finishing school and starting to work, I’ve stayed on top of my eligibility by ensuring that my employers were nonprofits [and] being diligent about completing the recertification paperwork and employer certification forms every 12 months like clockwork,” said Keil. “After submitting the paperwork, I check to make sure my qualifying payments are registered correctly.”

She also took steps in grad school to make all her loans eligible for PSLF.

“I had a private loan in undergrad that was not eligible for Public Service Loan Forgiveness,” said Keil. “In grad school, I took out more federal loans than needed and used the refunds to pay off the private loan, thereby converting it into a federal loan that is now eligible for public service loan forgiveness.”

Keil borrowed $45,000 to attend the University of Denver for both undergraduate and graduate school, and she has since cut her debt total down to about $41,000. She’s hopeful that whatever remaining balance she has left after her 10 years in public service will be forgiven through PSLF.

3. Giving up on PSLF to pay off loans faster

Joshua Hastings, a special education teacher and personal finance blogger, is no stranger to student debt. Hastings owed $40,000 after attending West Virginia University, while his wife Lauren, a physical therapist, owed a hefty $270,000.

While the couple initially put their loans on income-based repayment (IBR) and pursued PSLF, they ultimately decided that waiting 10 years for loan forgiveness wasn’t worth the risk.

“After looking into the numbers, Lauren and I realized that PSLF and IBR for the next 10 years with her student loans would result in a student loan balance of close to $450,000 or so,” Hastings said.

“While there was the potential that if she worked in the public sector she could have that forgiven in 10 years, making the IBR repayment each month for 10 years would have resulted in close to $150,000 in minimum payments,” he said.

Not only were they wary of paying so much in interest, but they also worried the PSLF program might not be around by the time those 10 years were up.

“We decided against leaving our student loans to chance — the federal government could change its policies,” said Hastings. “The last thing we wanted to do is pay $150,000 over the next 10 years only to find out that we still owed $450,000 in student loans that were not going to be forgiven.”

In the end, the couple elected to take their loans off IBR and make extra payments instead.

“We went from being really hands-off and just making minimums to being really fixated on our student loans,” Hastings said. “We started making choices in our lifestyle around being student loan debt-free. We didn’t take a honeymoon, we had a very small wedding, I downsized my truck to a sedan, we rented a room in our townhome, we ate out less, and I stopped investing temporarily.”

As a result of their lifestyle changes, they have slashed their collective balance from $261,000 in November 2016 down to $88,000 today.

In the end, they felt more confident paying back their debt than waiting for forgiveness from PSLF.

“If by chance [borrowers] are denied PSLF, now their student loans are larger and they just spent 10 years in a public sector, perhaps only because they wanted to take advantage of PSLF,” Hastings said.

Is the PSLF program right for you?

With all the uncertainty around PSLF, you might feel uneasy about the future of this program. Although no one can predict what will happen, it at least remains an option for public servants today.

Regardless of what you decide, know that the eligibility requirements can be confusing, and your loan servicer might not always give you the best information. If you’re pursuing PSLF, make sure to consult trusted experts about what steps you need to take each year to stay on track.

If you enjoy working in public service and feel confident in the program, you could earn total forgiveness on your student loans (minus any taxes you have to pay on the forgiven amount). But if you’re sacrificing career goals for the sake of PSLF, you might be better off finding other strategies to pay off your student loans.