re: Largest student loan debt you have ever heard...

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99% can’t follow directions

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I'm aware. ~3/4 of them never enrolled in PSLF. 10% hadn't made 120 consecutive payments.

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While the vast majority of borrowers' TEPSLF requests (71%) were denied because they had not yet applied for PSLF, 10% of requests were rejected because borrowers had not been repaying their loans for a full 10 years. Another 6% got hung up on a technicality created by Congress: When borrowers apply for help, their most recent payment, as well as the payment they made 12 months before applying, must be equal to or greater than what they would have paid on an income-driven repayment plan.

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81% of the problem, before digging any farther, is people not following directions.


Same article:

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Another 6% got hung up on a technicality created by Congress: When borrowers apply for help, their most recent payment, as well as the payment they made 12 months before applying, must be equal to or greater than what they would have paid on an income-driven repayment plan.

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This means you have to be enrolled in a qualified payment plan or paying the outright scheduled payment. This 6% is underpaying what they owe outside of a federally qualified repayment plan which is pimped all over every student loan servicer's website. It is equivalent to saying that you must make 120 qualifying payments. Now, maybe this 6% is in a servicer-approved but not federally-approved repayment schedule. That would qualify as annoying to me. But it doesn't disqualify them from participation in the PSLF. It more or less makes their payments increase for 12 months by some amount which is less than the the actual 10-year amortization they originally agreed to when they borrowed the money.


Now, this article does not have the percentage that had non-qualified loans. I have seen that number up between 5-10% at other websites.



Here's another website's take:

1/4 didn't send a complete application.

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In addition to the more than 70% of applications rejected because borrowers were ineligible, another 28% of the applications for forgiveness were rejected because they were incomplete, according to the government. Officials advised these borrowers to submit complete applications.

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If 99% of people got it wrong, then maybe the instructions weren't that easy to follow. But we are talking about literally having the government write off your debt with no increased tax burden, some people were capable of doing it right, and a quarter never even finished the application but are counted in the "denials." Exactly how spoon-fed should people getting free money be?



And to clarify:
I had the opportunity to do this. It didn't look as appealing as just buckling down lifestyle and paying what you owe without taking out more than you owe. And I also knew that being the guinea pig in a government-run program of essentially any type wasn't appealing to me. But the articles are slamming the PSLF for mostly bad applications. No one is asking how the folks that did it right did it right. And the rules, as presented to me about 7 years ago were:
1) file a tax return the year before you graduate so you'll show 0 income
2) enroll in a qualified income-driven repayment plan ( I think there are 4 of them that qualify)
3) apply for PSLF
4) your payments start with residency which starts in July. They'll be $0 for the first 12 months
5) year 1 of residency tax return only showed months 7-12 of income, so you'll continue to qualify for hardship, and you reapply for income driver repayment plans annually. Because you only had income for 6 months, you'll pay about $50-60/m on this $200K debt. At that point, you're 20% through the program and out of pocket $600. Then you keep in the hardship program through residency if you qualify and fellowship if you can. Then you have to shift to a standard payment plan until month 120 and apply while continuing to make payments during processing.


This is obviously an understanding tailored to those in the medical field. But I can't find a single instance of anyone who was told all of those things- and they were all told to me in fall 2012-spring 2013- who had difficulty getting their application approved.

If you can, I genuinely would like to read it.


But I haven't seen it yet. And, as said before, I have a hard time feeling bad for people who didn't get free money for not following directions.