12 years ago, the Public Service Loan Forgiveness (PSLF) program started to encourage people to work in the public sector. Since the program takes 10 years of qualified payments, people have only been eligible to receive forgiveness since 2017. To be eligible for the program, you must be working full-time at a government agency or non-profit organization and have made 120 on-time student loan payments. While many people fall under this criteria, only a small minority of candidates have actually received student loan forgiveness.
Who has received Public Service Loan Forgiveness?
So far, only 300 applications for PSLF have been approved and only 96 of those applicants have received any money. The program has helped relieve $5.52 million of $1.5+ Trillion of outstanding student loans. Shockingly, over 99% of applications have been rejected by the PSLF from a total applicant pool of 33,000.
What changes are coming to Public Service Loan Forgiveness?
Recently, President Trump has proposed to end the student loan forgiveness program. This would affect people who start borrowing on July 1, 2020 so all earlier borrowers can still apply for forgiveness. However, this could cause problems for those who borrow in the future. Those borrowers will need to leave public service to find a higher paying job to support their debt.
How to improve your odds of qualifying
Most people are turned down because they don't meet the requirements or are missing information. To qualify, you must be working full- time (over 30 hours a week) in a government public service job or work for a nonprofit. You must also make 120 on-time payments towards your student loans. You can read more about qualification criteria and how to apply here. When you fill out the application make sure that you have made the correct number of payments and answer all questions correctly.
An alternative to this program is Income Share Agreements. Through an income share agreement, someone pays a small percent of their income for a period of time. Because payments are tied to a percent of income, they are always affordable. Defynance offers a student loan refinancing program that utilizes income share agreements to free people from debt.
