About 147,000 people were rejected for forgiveness of student loan.
Here is what you need to know.
Student Loan Waiver: Debt Statistics
The US Department of Education, headed by Betsy DeVos, published the latest statistics on public service loan forgiveness:
- As of April 30, 2020, 150,545 student loan borrowers had submitted 196,046 public service loan exemption requests.
- Of this total, approximately 180,798 requests were processed. 15,248 other requests are pending.
- Of the total requests processed, 3,376 were approved and 177,422 were rejected.
- Of the approved applications, 74% of borrowers work for the government and 26% for non-profit organizations.
How many people have been approved for a student loan forgiveness?
Out of 150,545 borrowers, 2,215 borrowers collectively received $ 146 million in public service loan cancellations. That’s less than a 1.5% approval rating. The average paid-up student loan balance was $ 66,066.
A further 1,826 applications were approved under the Temporary Expanded Civil Service Loan Forgiveness Program. Of this total, 1,310 borrowers received $ 56 million in student loan waivers. The average paid-up student loan balance is $ 42,943.
Why are you rejected for a student loan forgiveness?
As of April, about 147,000 borrowers had been turned down for a public student loan forgiveness. Here are the reasons why:
- Eligible payments: 58%
- Missing information: 23%
- No eligible loan: 14%
The most recent data reflects some of the early applicants for the public service loan forgiveness program, which began in 2007 and took 10 years to pay off student loans. Over time, approval rates are expected to increase as more borrowers become familiar with the requirements of the public service loan forgiveness program. How do I get a student loan discount? The good news is that there are several concrete steps you can take. Let’s go.
1. Understand the conditions for canceling public service loans.
There is so much confusion about the requirements, so let’s clarify them. The Public Service Loan Forgiveness Program is a federal program that waives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in eligible federal, state or local public service employment or 501 (c) (3) nonprofit job that makes 120 qualifying one-time monthly payments.
2. Complete the employment certificate form
To start the process, you must complete a Certificate of employment form. Remember that the cancellation of civil service loans depends on your employer, not your type of job. How often do you need to submit an employment certification form for a public service loan remission? You should submit an Employment Certification Form to the US Department of Education when you start public service employment, when you change employers, and every year to make sure you are on the right track. About 44% of the proof of employment forms were found to be ineligible. The number one reason is the lack of information (80% of ineligible forms).
3. Enroll in an income-driven student loan repayment plan
There are four main income-based repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) and income-tested reimbursement (ICR). Remember that only federal student loans are eligible for the public service loan exemption. About 58% were rejected for making ineligible payments. Your monthly payments don’t have to be consecutive, but you do need to have a job when you make the payments. You can only make one qualifying payment per month. Thus, at a minimum, it will take 120 monthly payments, or 10 years, to benefit from a student loan discount.
4. Consolidate your federal student loans
What Kind of Federal Student Loans Do You Have? Only direct student loans are eligible for the civil service loan exemption. It is a recurring theme that applies to the CARES law, even if there was proposals to Congress to change that. If you have Perkins loans, FFELP loans, or if you borrowed student loans before 2011, you may need to consolidate these federal student loans into a direct consolidation loan. About 14% of borrowers were turned down for having ineligible student loans. If you have direct loans, you don’t have to consolidate your student loans to qualify.
5. Refinance your student loans
The cancellation of public service loans only affects federal student loans (not private student loans). Refinance private student loans and get a lower interest rate.
This student loan refinance calculator helps show you how much money you can save by refinancing a student loan.
How to pay off student loans faster
What’s the best way to pay off student loans faster? Start with these four options, all free: