by Ashley
Thanks to you, readers, I just completed and submitted my PSLF application (<<<does that make anyone else think pumpkin spice latte every time you read it? Just me? Cool, cool.)
I feel like I’m fairly on-top of my student loan stuff, but this just goes to show the benefit of the community here because I fully had no idea that I could submit a request to have past payments count toward the PSLF program.
What is the PSLF program?
For anyone unfamiliar, this is a program established by the feds/US Department of Education to forgive student loans for those who work in certain public service industries. I work at a public university and that “counts” for purposes of this program.
The PSLF program allows forgiveness on loans after the borrower has made 120 qualifying payments on eligible loans while working full-time in qualifying employment. I know there were some pandemic-related exceptions, as well (e.g., I believe months counted with no payment made during the interest pause period).
Why I didn’t apply for PSLF years ago
I never applied for the PSLF program when I first started working full-time. At the time, the PSLF program was a mess (perhaps it still is? I haven’t kept abreast of this). I knew multiple people who believed they were in the PSLF program and faithfully made 10 years worth of on-time payments only to have the rug pulled out from under them. There were many excuses (e.g., they didn’t have a qualifying loan, they weren’t officially enrolled in the program, they had made some other such clerical error) but the bottom line is these people I knew – friends and colleagues – were really counting on this loan forgiveness that did not in fact pan out.
I never planned to be in debt long enough to take advantage of the PSLF program. 120 qualifying payments?! That’s ten years! Absolutely not – no, thanks. Also, I feel a sense of responsibility to pay for my loans. I signed to take these loans on. I owe the money. I need to pay it back. It was as simple as that.
All of these are reasons why I never applied for PSLF to begin with.
Why apply for PSLF now?
I started my full-time job in 2015. That means I’ve been working for 7 years in this field. Why apply for PSLF now? What changed?
First, my life changed. Sure, if everything had gone to plan, I would be totally debt-free (minus mortgage) by now. Twice over, in fact. My initial debt-free projections were for the year 2020, and my revised projection was for June 2022. Both dates have come and gone and I’m still in debt. My divorce and associated legal fees, multiple moves (first out of my marital home, then between rentals for a couple years, and finally to the home my new-husband and I purchased together), a new-to-me car, inflation…..yeah, I’ve still got debt.
Changing philosophies and world views
More philosophically, my view of student loan forgiveness has changed. I see student loans like the next housing market crash. Lenders were lending money to people who had no right to be given such huge loans. When I graduated, I had over $100,000 worth of student loans! That’s an insane amount of money, and though it allowed me to earn a higher-level degree I need for my current job, I think there are some irresponsible lending practices going on. If we really wanted to get into the nitty gritty, I’d tell you about how higher ed, in general, is broken. College used to cost $3,800 the year I was born, and now it costs around $12,000/year. And that’s just undergrad. I’ll stop myself from going on a longer rant about this topic.
Back to PSLF – I’ve been paying faithfully since I graduated college in 2013. For most of that time, my student loan payment was the single largest payment I owed. It cost more than my mortgage on my first home. We were STRUGGLING and even with making $1,000+/month payments, my loan balances were growing. They were getting bigger because the interest, alone, cost more than that. Long-term readers may remember the days back in 2014/2015 when I was focusing on other debts first (e.g., medical debt, car debt, tax debt) and still paying a HUGE SUM toward student loans, only to keep watching them grow.
I’m no economist. I’m no tax pro. I love a good budget spreadsheet, but I’m not really a pro at any of this stuff. And yet, it doesn’t take a rocket scientist to see this as a major problem. It’s not right. Predatory lending, overextension of loans, and such high interest rates that borrowers can never get out from under them (I had student loans with 8.5% interest!!!). All this to say, I think I’ve changed how I feel. I still feel like if you borrow money, you should pay it back. But student loans…the interest they generate…they’re a different beast entirely. It’s not that simple. Feel free to disagree, but I feel like I’ve paid my debt back. Both through actual monetary payments, and also through the public service I’ve given the state of Arizona.
What’s next with my loan forgiveness?
I’m enrolling in PSLF. In the meantime, I’m going to keep putting some money aside in a separate account for student loans (rather than paying toward them directly, I’m saving the money). But I’m going to focus more attention on my car loan first. It will take me likely a year and a half to pay it off. Then I can turn back to student loans. Maybe I’ll still pay them off before the PSLF would come through. I’ve got 3 more years to go before I’d qualify for forgiveness. But I at least want to be “in the system.” I want my payments and past history to count toward the 120 qualifying payments. And when I hit that 120 payment-mark if I still have outstanding student loan debt, I’ll be more than happy to graciously accept the debt-forgiveness.
Just one little “funny” to leave with you all. When it came to completing my PSLF application forms, the Dept of Ed is living in the dark-ages and wants the forms to be snail-mailed in. True to form (the Dept of Ed, known for being a cluster*), there were two totally different addresses printed in the application materials. One was part of the application itself. The other address was on the cover page, containing all the instructions of what to do. Can’t make this stuff up, folks. Totally different addresses in totally different states and different fax numbers, to boot!
Although I assume the former is the correct address (the one on the application, itself), I went ahead and printed the application out twice and mailed one to each address just-in-case. I’m not trying to mess this up due to some clerical error and the clock is ticking. All applications are due within the next couple of months. No time to spare! So I’m crossing all my t’s and dotting my i’s and hopefully everything is in order to be enrolled into the program and have my old payments grandfathered into the plan.
Thank you, as always, for your comments, advice, and suggestions!